LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
The 'best interest' expectation in FTC guidance means the agent should:
- Recommend what best serves the client among available products, disclose shelf limits, and not favour compensation
- BMaximize the insurer's profit on each sale, since a profitable insurer is best able to honour its promises to clients
- CSell only proprietary products of the sponsoring insurer, since those are the products the agent knows best
- DAlways choose the cheapest product available, since the lowest premium is objectively in the client's best interest
Correct answer: A) Recommend what best serves the client among available products, disclose shelf limits, and not favour compensation
Agents with limited shelves must disclose that limitation; within the shelf, client interest governs.
Why the other options are wrong
- BThe standard is the client's interest, not the insurer's profit.
- CDisclose shelf limits; recommend what fits.
- DCheapest is not always best.
Exam tip
Best interest within your shelf; disclose shelf limits.
Common mistake
Implying independence while selling one insurer's products.
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.