LLQP Ethics & Professional Practice · Component 1.2 · 60% of the exam
The 'group policyholder' in group insurance is:
- The employer, association or trustee holding the master contract; members are group life insureds
- BThe insurer, which holds the master policy on behalf of the employees who are enrolled under it and issues their certificates
- CEach employee individually, since each certificate is a separate contract with the insurer
- DThe agent who placed the group business and administers enrolments on the insurer's behalf
Correct answer: A) The employer, association or trustee holding the master contract; members are group life insureds
Group insurance separates the contract holder (sponsor) from the insured members, who receive certificates. Members have statutory rights to designate beneficiaries and to information.
Why the other options are wrong
- BThe insurer issues the master policy; it does not hold it.
- CEmployees are insured members, not policyholders.
- DThe agent arranges the plan but does not hold it.
Exam tip
Group: sponsor holds the policy; members hold certificates.
Common mistake
Treating a group member as the contract owner.
What this tests
CISRO competency component 1.2 — 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.