LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
The agent's 'duty of disclosure' to the client includes:
- ANothing beyond handing over the brochure, since the insurer's printed material contains every fact the client needs
- BThe agent's personal finances and investments, so the client can judge whether the agent follows their own advice
- COnly the premium and payment dates, since the rest of the contract is set out in the policy document
- Explaining features, limitations, exclusions, costs and risks; disclosing licence, insurers, compensation and conflicts; providing documents
Correct answer: D) Explaining features, limitations, exclusions, costs and risks; disclosing licence, insurers, compensation and conflicts; providing documents
Disclosure supports informed consent and is a regulatory requirement.
Why the other options are wrong
- ABrochures are insufficient.
- BThe agent's personal finances are not a disclosure item.
- CDisclosure covers far more than the premium.
Exam tip
Disclose product (incl. limits), agent (licence, insurers, compensation, conflicts), documents.
Common mistake
Omitting exclusions from the explanation.
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.