Ethics and Regulatory Compliance Flashcards
6 cards from real LLQP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Ethics and Regulatory Compliance flashcards as text
Under Canadian insurance regulations, what is the agent's primary duty when a conflict of interest arises between the agent's financial interests and the client's needs?
Answer: Disclose the conflict and let the client decide
When a conflict of interest arises, the agent must disclose it to the client and allow the client to make an informed decision.
What does the concept of 'suitability' require of a life insurance agent in Canada?
Answer: Ensuring the recommended product meets the client's specific needs and financial situation
Suitability requires that agents recommend products that are appropriate for the client's specific needs, financial situation, risk tolerance, and objectives.
Under PIPEDA and provincial privacy legislation, what is an insurance agent's obligation regarding client personal information?
Answer: Collect only what is necessary and protect it from unauthorized access
Under privacy legislation, agents must collect only necessary personal information and implement appropriate safeguards to protect it from unauthorized access or disclosure.
What is 'churning' in the context of insurance ethics?
Answer: Replacing existing policies unnecessarily to generate new commissions
Churning is the unethical practice of replacing existing insurance policies with new ones primarily to generate new commissions for the agent, often to the detriment of the client.
What is the regulatory requirement when an insurance agent discovers that a client has made a material misrepresentation on their application?
Answer: Report it to the insurer and advise the client to correct the information
The agent must report any known material misrepresentation to the insurer and advise the client to provide accurate information.
What obligation does an agent have under anti-money laundering (AML) regulations when selling insurance products in Canada?
Answer: Verify client identity and report suspicious transactions as required by FINTRAC
Insurance agents must comply with FINTRAC requirements including client identity verification and reporting suspicious transactions.
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Sources & references
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- fcnb.ca — Test delivery, retake policy, score validity · verified Oct 2026
- insurancecouncilofbc.com — Fees, retake fee, eligibility, exam format, time limit, passing score, retake policy, score release, score validity, test delivery · verified Oct 2026
- fsrao.ca — Test delivery, eligibility, retake policy, score validity, fees, exam information · verified Oct 2026