LLQP Ethics & Professional Practice · Component 1.1 · 60% of the exam
The 'Insurance Act' provisions on life insurance generally apply to contracts:
- AOnly over a certain face amount, since small policies are governed by the insurer's own rules
- BOnly with provincially incorporated insurers, since federal insurers answer to federal law alone
- CMade anywhere in the world by an insurer that holds a licence in the province, wherever the client happens to live
- Made in the province, or with a resident of the province, subject to conflict-of-laws rules
Correct answer: D) Made in the province, or with a resident of the province, subject to conflict-of-laws rules
The Act's application section ties the governing law to the place of contract or the insured's residence. This matters for clients who move or buy from out-of-province insurers.
Why the other options are wrong
- ANo amount threshold applies.
- BIt applies to any insurer contracting in the province.
- CProvincial law has territorial limits.
Exam tip
Governing law follows where the contract is made or where the insured lives at that time.
Common mistake
Assuming the insurer's head office province governs the contract.
What this tests
CISRO competency component 1.1 — 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.