LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
'Misrepresentation' by an agent includes:
- AHonest explanation of a policy's limitations, since drawing attention to weaknesses misleads the client about its value
- BReferring a client to a lawyer for estate advice, since the referral implies the agent cannot answer the question
- CDeclining to guarantee investment returns, since the client is left with a misleading impression of uncertainty
- False or misleading statements about terms, guarantees, dividends, the insurer or the agent's qualifications, deliberate or careless
Correct answer: D) False or misleading statements about terms, guarantees, dividends, the insurer or the agent's qualifications, deliberate or careless
Misrepresentation is the core prohibited conduct; carelessness is no defence.
Why the other options are wrong
- AThat is proper disclosure.
- BReferring to a lawyer is proper conduct.
- CDeclining to guarantee returns is proper conduct.
Exam tip
No false or misleading statements — deliberate or careless.
Common mistake
Describing a par policy's dividends as 'guaranteed income'.
What this tests
CISRO competency component 2.2 — Integrate into practice the rules governing the activities of life insurance agents — which is weighted at 40% of the Ethics & Professional Practice module. Written against the published curriculum.
More from component 2
- A prospective client wants to confirm that an agent is properly licensed before meeting him. She should:
- A dual-licensed agent's mutual fund business is reviewed following a client complaint. The review will be conducted by:
- Assuris coverage applies to:
- OLHI's services are available to:
- Complaints about an agent's conduct (as opposed to an insurer's claim decision) should be directed to:
- The best summary of an agent's ethical obligations is to:
Practice the whole Ethics & Professional Practice module
Timed sets weighted like the exam, and review of every question you miss. Free to start.