LLQP Ethics & Professional Practice · Component 2.1 · 40% of the exam
Whistleblower or reporting obligations protect clients because:
- AThey do not exist in insurance, since the duty to report misconduct is limited to the securities industry
- BThey are voluntary, so an agent who becomes aware of misconduct may report it or not as conscience dictates in the circumstances
- Insurers, MGAs and agents must report certain misconduct, and agents must self-report charges and actions
- DThey apply only to insurers, which must report agent misconduct, while agents themselves have no reporting duty
Correct answer: C) Insurers, MGAs and agents must report certain misconduct, and agents must self-report charges and actions
Reporting duties bring misconduct to light; failure to self-report is itself a breach.
Why the other options are wrong
- AReporting obligations exist for agents.
- BReporting obligations are mandatory, not voluntary.
- DAgents have self-reporting duties.
Exam tip
Report misconduct; self-report charges/bankruptcy/actions.
Common mistake
Not reporting a criminal charge to the regulator.
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.