LLQP Ethics & Professional Practice · Component 2.2 · 40% of the exam
'Twisting' is:
- Inducing a replacement through misrepresentation or incomplete comparison, a prohibited unfair practice
- BA permitted sales technique in which the agent presents the new policy's advantages before the client raises the old one
- CA rider that converts a term policy to permanent coverage by twisting the premium schedule over the policy's life
- DA tax strategy in which policy gains are twisted into capital gains through a series of partial surrenders
Correct answer: A) Inducing a replacement through misrepresentation or incomplete comparison, a prohibited unfair practice
Twisting is the abusive form of replacement; churning is repeated replacement for commissions.
Why the other options are wrong
- BTwisting is a prohibited practice.
- CTwisting is not a rider.
- DTwisting is not a tax strategy.
Exam tip
Twisting = replacement by misrepresentation; churning = replacement for commissions.
Common mistake
Understating the new policy's contestability restart to close a replacement.
What this tests
CISRO competency component 2.2 — Integrate into practice the rules governing the activities of life insurance agents — which is weighted at 40% of the Ethics & Professional Practice module. Written against the published curriculum.
More from component 2
- A prospective client wants to confirm that an agent is properly licensed before meeting him. She should:
- A dual-licensed agent's mutual fund business is reviewed following a client complaint. The review will be conducted by:
- Assuris coverage applies to:
- OLHI's services are available to:
- Complaints about an agent's conduct (as opposed to an insurer's claim decision) should be directed to:
- The best summary of an agent's ethical obligations is to:
Practice the whole Ethics & Professional Practice module
Timed sets weighted like the exam, and review of every question you miss. Free to start.