LLQP Ethics & Professional Practice · Component 2.1 · 40% of the exam
Under fair treatment of customers guidance, an insurer's responsibility for a product it has sold:
- continues through the product's life, including reviewing whether it still serves its market
- Bis limited to responding to complaints that clients choose to make in writing
- Cpasses entirely to the agent once the first premium has been collected and remitted
- Dends at the point of sale, once the contract has been delivered to the client
Correct answer: A) continues through the product's life, including reviewing whether it still serves its market
The guidance expects insurers to identify a target market, design products for it and monitor them after launch. Distribution, disclosure, complaint handling and claims are all assessed against the outcomes clients actually receive.
Why the other options are wrong
- BResponsibility is proactive rather than limited to responding to complaints.
- CAn insurer's responsibility is not transferred to the agent.
- DProduct oversight is expected to continue well beyond the sale.
Exam tip
Fair treatment runs from product design through to claims, not just the sale.
Common mistake
Treating fair treatment guidance as a point-of-sale disclosure rule.
What this tests
CISRO competency component 2.1 — 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.