LLQP Ethics & Professional Practice · Component 1.2 · 60% of the exam
The 'insurer' as a party must be:
- AAny company that can pay the claim, since the client's protection rests on the insurer's financial strength alone and not on licensing
- BGovernment-owned, since only a Crown corporation may issue contracts of life insurance in Canada
- Licensed for the class of insurance in the province where the contract is made, and OSFI-supervised if federal
- DForeign, since Canadian insurers are prohibited from issuing contracts directly to residents
Correct answer: C) Licensed for the class of insurance in the province where the contract is made, and OSFI-supervised if federal
Agents may only place business with licensed insurers. Placing with unlicensed insurers is an offence.
Why the other options are wrong
- ALicensing is required.
- BMost insurers are private companies.
- DDomicile is irrelevant if the insurer is licensed.
Exam tip
Only licensed insurers; verify before placing business.
Common mistake
Placing coverage with an offshore, unlicensed insurer.
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.