LLQP Ethics & Professional Practice · Component 2.1 · 40% of the exam
The courts protect clients in insurance matters by:
- ALicensing agents through the provincial superior court, which hears applications for new licences at each sitting of the court
- BRegulating premiums by reviewing the rates insurers charge and ordering refunds where they are found excessive
- CWriting standard policy wording for the industry, so that every insurer's contract uses approved language
- Adjudicating disputes, applying contra proferentem, awarding damages including punitive, and finding negligence
Correct answer: D) Adjudicating disputes, applying contra proferentem, awarding damages including punitive, and finding negligence
Judicial remedies are the ultimate backstop for consumers and the source of agents' negligence liability.
Why the other options are wrong
- ALicensing is done by regulators, not courts.
- BRegulating premiums is not a court function.
- CInsurers write policies; courts interpret them.
Exam tip
Courts: contract interpretation, damages, negligence.
Common mistake
Forgetting that agents can be sued personally.
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.