Ethics, Suitability, and Consumer Protection
Core concepts
Agents must act with integrity, competence, and fair dealing. Suitability requires matching products to client needs, income, and objectives. Disclosure of commissions, conflicts, and policy terms is essential. Consumer protections include cooling-off periods, free look, privacy rules, and complaint resolution processes.
Traps in questions
- Confusing suitability (fit) with disclosure (telling).
- Forgetting the free look period allows cancellation for a refund.
- Overlooking privacy obligations when sharing client data.
- Assuming a signed waiver removes all liability - agents still owe a duty of care.
Rule of thumb
If a question describes a client's needs and asks what the agent should do, choose assess needs, disclose, and recommend suitable coverage - never pressure or misrepresent.
Worked example
A client cannot afford a comprehensive plan. The agent should recommend a suitable lower-cost option, disclose limitations, and document the discussion rather than oversell.