LLQP Ethics & Professional Practice · Component 1.4 · 60% of the exam
The 'currency and place of payment' provision:
- Premiums and benefits are payable in Canadian currency at the insurer's head office, which matters for clients abroad
- BApplies only to annuities, since life insurance benefits are paid wherever the beneficiary happens to live in the currency of that place
- CIs irrelevant to Canadian clients, since it concerns only policies issued by the insurer's foreign branches
- DLets the beneficiary choose any currency for payment, at the exchange rate on the date of death
Correct answer: A) Premiums and benefits are payable in Canadian currency at the insurer's head office, which matters for clients abroad
Administrative provisions such as currency and place of payment matter for clients who live, pay or die abroad; benefits are paid in Canadian dollars at the insurer's head office unless the contract says otherwise.
Why the other options are wrong
- BIt applies to all contracts.
- CIt affects cross-border clients.
- DPayment is usually in Canadian dollars.
Exam tip
Payment in Canadian dollars at head office unless stated.
Common mistake
Promising a foreign-currency payout.
What this tests
CISRO competency component 1.4 — Integrate into practice the legal aspects of insurance and annuity contracts — which is weighted at 60% of the Ethics & Professional Practice module. Written against the published curriculum.
More from component 1
- An 'assignee' of a life insurance policy is:
- A corporation as policyowner and beneficiary of a policy on a key employee:
- A 'trustee' named to receive proceeds on behalf of a beneficiary:
- The 'automatic premium loan' (APL) provision:
- A life insurance contract 'matures' when:
- The 'assignment' provision typically states that:
Practice the whole Ethics & Professional Practice module
Timed sets weighted like the exam, and review of every question you miss. Free to start.