LLQP Ethics & Professional Practice · Component 1.4 · 60% of the exam
The 'modification' or 'changes to the contract' provision states that:
- AThe client can rewrite any term by notifying the insurer, since the contract exists for the client's benefit
- BChanges take effect automatically whenever the insurer updates its standard contract wording
- Only specified officers of the insurer may change or waive terms, in writing; agents have no such authority
- DThe agent can change the contract on the client's instructions, since the agent represents the insurer
Correct answer: C) Only specified officers of the insurer may change or waive terms, in writing; agents have no such authority
The provision protects the insurer and warns clients not to rely on agents' promises.
Why the other options are wrong
- AChanges require the insurer's written agreement.
- BContract changes are never automatic.
- DAgents have no authority to alter terms.
Exam tip
Only the insurer's officers, in writing, can change the contract.
Common mistake
Telling a client the agent will 'take care of' a term change.
What this tests
CISRO competency component 1.4 — 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.