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LLQP (life licence)

LifeLLQP Life Insurance✓A&SLLQP Accident & Sickness Insurance Seg FundsLLQP Segregated Funds & Annuities EthicsLLQP Ethics & Professional Practice (Common Law)

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Ethics and Professional Practice · Component 2: rules for agents (40%)

Fair Treatment & Professional Conduct

The CCIR/CISRO fair treatment of customers guidance in practice: needs-based advice, conflicts of interest, disclosure, replacement and the LIRD, honest promotion, claims and complaints, and protecting client information.

Rules governing the activities of life insurance agents2 min read6 sections

Must-know for the exam

Fair treatment means putting customers' interests ahead of your own (CCIR/CISRO guidance, Sept 2018).
Conflicts from targets, incentives or dual duties must be avoided or managed; if they cannot be, decline to act.
Before advice, gather the client's knowledge, needs, ability to afford and risk profile.
Explain and document the basis of a recommendation, in writing, in a client file.
Disclose whether you offer a full range, a limited range or one insurer's products.
Promotional material, including your own posts, must be accurate, clear and not misleading.
Replacement in BC and several provinces requires the Life Insurance Replacement Declaration; replacing restarts contestability.
Twisting is an incomplete or misleading comparison used to induce a lapse; churning is switching for the agent's benefit.
Segregated funds: clients may cancel within 2 business days of confirmation (CCIR/CISRO Segregated Funds Guidance, Nov 2025).
Claims and complaints must be handled in a timely and fair manner, under public procedures.

On this page · 6 sections

Traps that cost marks

Thinking disclosure of an incentive cures an unsuitable recommendation.
Believing disclosure always makes a conflict acceptable.
Confusing underwriting information with a needs assessment.
Relying on an undocumented verbal recommendation.
Keeping no record when advice is waived.
Ignoring the client's loss of incontestability when replacing.
Treating replacement as an ordinary new sale.
Confusing twisting with rebating.

Why it matters on the exam

Conduct questions describe an agent's behaviour and ask what is wrong or what the agent should do. The best answer is usually the one that protects the client and is documented.

Advice and suitability

•Know the client before recommending; a premium a client cannot afford is unsuitable however much she wants the product.
•Make clear whether advice is being given; if the client waives advice where the law allows, keep her acknowledgment.
•Respect an informed decision to buy less, and record it.

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More on this topic

Exam-style questions

Marco, an independent agent in Burlington contracted with four insurers, can earn an all-expenses-paid trip by reaching a sales target with Insurer Y this quarter; he is two policies short. He is meeting Tessa, 37, who needs $600,000 of 20-year term with a strong conversion option. After comparing products, Marco concludes that Insurer Z's policy suits Tessa better on price and conversion terms. What does the fair treatment guidance expect?
An agent is asked to advise both spouses in a bitter divorce on how to split and restructure the couple's jointly owned policies. Each spouse wants the opposite outcome. What does the guidance expect if the conflict cannot be managed satisfactorily?
Kim, 46, a dentist in Kelowna with two teenagers, meets agent Rowan about a universal life policy her accountant mentioned for estate planning. Rowan has an illustration ready and wants to move quickly because Kim is busy. Kim says she is comfortable with some market risk but wants to keep her monthly outlay under $1,500. Before recommending the policy, what information does the guidance say Rowan should gather?

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