LLQP Ethics & Professional Practice · Component 2.1 · 40% of the exam
OSFI protects clients indirectly by:
- Requiring insurers to hold adequate capital and manage risk, so they can pay claims and honour guarantees
- BReviewing every policy sale made by a federally regulated insurer to confirm that it was suitable for the client
- CPaying claims directly to policyholders when an insurer disputes a claim and the policyholder complains
- DLicensing agents who sell the products of federally regulated insurers, in place of the provincial regulators
Correct answer: A) Requiring insurers to hold adequate capital and manage risk, so they can pay claims and honour guarantees
Solvency supervision underpins the long-term promises in life insurance.
Why the other options are wrong
- BOSFI does not review sales.
- CInsurers pay claims; OSFI does not.
- DAgent licensing is provincial, not an OSFI function.
Exam tip
OSFI = solvency = claims-paying ability.
Common mistake
Telling clients OSFI guarantees their policy.
What this tests
CISRO competency component 2.1 — 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.