LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
Selling a product from an insurer the agent is not contracted with, through another agent's contract ('splitting' without disclosure), is:
- Problematic unless both are licensed and contracted and the arrangement is disclosed and permitted; undisclosed splitting is misconduct
- BFine in every case, since the client receives the product they want and the insurer receives the premium
- CEncouraged by insurers, since it lets agents offer products from companies that have not contracted with them
- DRequired whenever an agent lacks a contract with the insurer whose product best suits the client's needs
Correct answer: A) Problematic unless both are licensed and contracted and the arrangement is disclosed and permitted; undisclosed splitting is misconduct
Business must be written under the licensed, contracted agent's own code with transparent joint-work arrangements.
Why the other options are wrong
- BJoint work is acceptable only under strict conditions.
- CUndisclosed splitting is never encouraged.
- DUndisclosed splitting is never required.
Exam tip
Joint work: both licensed and contracted; disclosed; insurer-permitted.
Common mistake
Writing business under a colleague's code to earn a bonus.
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.