LLQP Ethics & Professional Practice · Component 1.6 · 60% of the exam
The Insurance Act requires the insurer, within a set time after receiving sufficient evidence of the claim (commonly 30 days), to:
- ADeny the claim unless the claimant has provided every document the insurer could conceivably require under any circumstances
- BInvestigate for as long as it considers necessary, since the Act sets no limit once evidence has been received
- CPay the agent, who then distributes the proceeds to the beneficiaries according to the designation
- Pay the person entitled, or notify the claimant and pay into court if it disputes the claim or cannot identify the payee
Correct answer: D) Pay the person entitled, or notify the claimant and pay into court if it disputes the claim or cannot identify the payee
Statutory payment deadlines protect claimants; disputes are resolved by court or by payment into court.
Why the other options are wrong
- ADenial requires grounds.
- BTime limits apply once evidence is complete.
- CThe insurer never pays the death benefit to the agent.
Exam tip
Pay within ~30 days of sufficient proof, or pay into court if disputed.
Common mistake
Telling a beneficiary the insurer can take as long as it likes.
What this tests
CISRO competency component 1.6 — 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.