LLQP Ethics & Professional Practice · Component 1.3 · 60% of the exam
The 'entire contract' provision states that:
- ABrochures and illustrations are part of the contract, since the client relied on them when deciding to apply for the policy
- BVerbal promises by the agent are binding on the insurer, since the agent is the insurer's representative
- The policy, application and endorsements are the whole contract; verbal representations are excluded
- DThe agent's file notes govern any dispute, since they record what the client was told at the point of sale
Correct answer: C) The policy, application and endorsements are the whole contract; verbal representations are excluded
The entire contract rule protects both parties from claims based on outside statements — and means clients cannot rely on an agent's verbal promises contrary to the policy.
Why the other options are wrong
- AMarketing is outside the contract.
- BVerbal promises are excluded.
- DFile notes are not part of the contract.
Exam tip
Contract = policy + application + endorsements; nothing verbal.
Common mistake
Promising features not in the policy.
What this tests
CISRO competency component 1.3 — 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.