CIP Professional Ethics Exam cheat sheet

Ethical frameworks: consequentialism judges acts by outcomes, deontology by duties and rules, virtue ethics by the character of the agent; identify which framework a decision rests on before defending it.

The four-step decision test: Is it legal? Is it balanced (fair to all parties)? How will it make me feel about myself? Would I be comfortable if it were published?

Stakeholder mapping rule: list every party affected (client, insurer, broker, colleagues, regulator, public), then assess the harm and benefit to each before acting.

Ethical dilemma defined: a choice between two options, each carrying a genuine moral cost; a compliance question has one correct answer, an ethical dilemma does not.

Separation test for conflicts of interest: if an outside interest could reasonably be seen to bias judgment, disclose it and, where material, remove the interest rather than rely on self-restraint.

Test of publicity (sunlight test): an action is presumptively sound if it could be fully disclosed to clients, regulators, and the public without loss of trust.

Rule of the veil of ignorance: design or judge a decision as if you did not know which party you would be, which counters self-serving bias.

Rationalization red flags: 'everyone does it', 'no one is harmed', 'it is technically permitted', and 'the client will never know' signal elevated ethical risk.

Ethical decision steps in order: gather facts, identify stakeholders and duties, evaluate options against standards, choose, act, document the rationale, and review the outcome.

CIP conduct rests on integrity, competence, objectivity, confidentiality, and professional behaviour; each duty applies to clients, employers, colleagues, and the regulator.

Competence rule: a CIP accepts only work they are qualified to perform and maintains knowledge through continuing professional development; unfamiliar work is declined or referred.

Confidentiality rule: client information is disclosed only with consent, when legally compelled, or where required to prevent serious harm; disclosure is limited to what is necessary.

Conflict-of-interest standard: identify, disclose in writing, obtain informed consent where appropriate, and decline the engagement if the conflict cannot be managed.

Documentation standard: record the advice given, the information relied on, alternatives considered, and the client's decision; undocumented advice is difficult to defend.

Representation rule: a CIP does not misrepresent qualifications, products, or the scope of cover, and corrects errors promptly once discovered.

Regulatory duty: cooperate with supervisors and regulators, respond truthfully and on time, and self-report material breaches rather than conceal them.

Fair treatment of customers: suitability of advice, clear disclosure of costs and remuneration, and no pressure selling that overrides the client's informed choice.

Professional boundaries: distinguish advice from instruction; the client decides, the CIP informs, and the CIP does not guarantee outcomes they cannot control.

Utmost good faith (uberrimae fidei): both parties disclose material facts; a material fact is one that would influence a prudent insurer's decision on acceptance or terms.

Non-disclosure and misrepresentation: concealment of a material fact can render a policy voidable; the remedy depends on whether the misstatement was innocent, negligent, or deliberate.

Fraud indicators: inflated claims, altered receipts, inconsistent timelines, and policies taken out shortly before a loss; suspicion is reported internally, not investigated alone.

Confidentiality versus fraud reporting: client confidentiality yields to the legal and ethical duty to report suspected fraud to the insurer or regulator.

Remuneration transparency: commissions, overrides, and contingent payments that could influence the recommendation must be disclosed to the client.

Treating customers fairly outcomes: products designed for the target market, clear information before and after sale, suitable advice, and no unreasonable post-sale barriers.

Whistleblowing rule: report wrongdoing through internal channels first where safe; escalate externally when the matter is serious, concealed, or the reporter faces retaliation.

Market conduct risk: churning, replacement without disclosure, and advice driven by commission rather than client need are the most common integrity failures.

Data ethics: collect only necessary personal data, protect it, use it only for disclosed purposes, and apply the same standard to digital and paper records.

Scenario method: identify the facts, the parties, the duties engaged, the applicable standards, the options, and the least harmful defensible course; then document the reasoning.

Client asks to omit a material fact: refuse to assist, explain the consequences of non-disclosure, record the client's decision, and decline to submit a knowingly false proposal.

Pressure from an employer to sell unsuitable products: escalate internally, rely on client-need evidence, and refuse to sign or certify advice you believe is unsuitable.

Discovery of a colleague's misconduct: do not conceal; report through the proper channel, preserve records, and avoid discussing it outside those who need to know.

Conflicting duties to employer and client: the client's interest in suitable, honest advice prevails where the two cannot be reconciled; disclose the conflict.

Gift and hospitality rule: accept only items of nominal value, disclose anything beyond that, and never accept gifts from parties with a pending decision.

Error disclosure: when you discover an error in advice or documentation, inform the client promptly, explain the effect, and correct it; concealment compounds the breach.

Referral to another professional: confirm competence and independence, disclose any referral fee, and remain accountable for the advice you give.