LLQP Ethics flashcards
LLQP Ethics · Build recall with a focused review session.
32 cards. Read the term and the definition here. The deck at the top of this page is optional.
- Fiduciary-like duty
- A duty to act in the client's best interest that arises when the licensee holds discretion or superior knowledge, ranking the client's interest above the licensee's compensation.
- Suitability
- The requirement that a recommendation match the client's needs, objectives, time horizon, financial capacity, risk tolerance, and existing coverage, with the basis documented.
- Twisting
- Misrepresenting or omitting facts to induce a client to lapse or replace existing coverage, which is prohibited conduct harming both the client and market integrity.
- Reportable event
- A circumstance such as a criminal charge, regulatory action, or licence suspension that a licensee must disclose to the regulator within the prescribed time.
- Express consent
- Clear, recorded permission from a client to collect, use, or disclose specified personal information, generally required for sensitive data such as health information.
- Paramount duty test
- A decision rule for resolving conflicting obligations: identify which duty is overriding in the circumstances, act minimally to satisfy it, and document the reasoning.
- Territorial licensing
- The principle that a licensee must be licensed in the jurisdiction where the client resides at the time of the transaction, regardless of where the licensee works.
- Replacement disclosure
- Enhanced disclosure when a client switches products, requiring a documented comparison of costs, benefits, and lost features and the client's informed consent.
- Churning
- Excessive or unnecessary switching of a client's policies to generate commissions, a prohibited practice that harms the client and undermines market integrity.
- Continuing education condition
- A licence requirement that the licensee complete a set number of relevant, verifiable education hours by a deadline, failing which the licence may be suspended.
- Data minimization
- The privacy principle that only personal information necessary for the stated purpose may be collected, used, or disclosed, with unnecessary data redacted or omitted.
- Contemporaneous record
- A note made at or near the time of the event that records facts, instructions, and reasoning, carrying more evidentiary weight than later reconstruction.
- Good faith
- An ethical standard requiring honest, fair dealing in the client's interest, going beyond merely avoiding outright fraud or misrepresentation.
- Interim suspension
- A temporary restriction of a licence imposed before a full hearing where there is an immediate risk to the public, pending a disciplinary decision.
- Declined KYC
- A client's refusal to provide know-your-client information, which prevents the licensee from establishing suitability and means the engagement should not proceed.
- Politically exposed person
- A client holding a prominent public function who presents higher money-laundering risk and therefore requires enhanced due diligence and senior approval.
- Withdrawal of consent
- A client's right to revoke permission for use or disclosure of personal information, subject to legal and contractual limits, with consequences explained.
- Appearance of conflict
- A situation where a reasonable observer could perceive bias even without an actual conflict, which must be avoided or disclosed because perception matters.
- Probationary supervision
- An enhanced oversight period for newly licensed staff in which a supervisor reviews files, provides feedback, and documents the review.
- Material misrepresentation
- A false or omitted fact on an application that would affect the insurer's decision, which can void the contract and harm the client.
- Self-reporting
- Voluntarily disclosing one's own error or reportable event to the regulator promptly, which typically mitigates discipline compared with concealment.
- Breach notification
- The required communication to affected individuals and the regulator after a privacy breach that creates a risk of significant harm, within statutory timelines.
- Undue influence
- Pressure by a family member or adviser that overrides a client's independent judgment, requiring private interviews and careful verification of the client's wishes.
- Litigation hold
- A directive to suspend destruction of records once a complaint, claim, or investigation is known, preserving evidence for the regulator or court.
- Rebating
- Offering a client part of the commission or an inducement outside the policy terms to win business, generally prohibited because it distorts competition.
- Root-cause analysis
- A review of a complaint or error that identifies the underlying process failure rather than only correcting the individual client outcome.
- Social media advertising
- Public online content promoting insurance that must be accurate, balanced, approved where required, and must never identify clients or give personal advice.
- Stricter standard rule
- A conflict-of-laws approach in multi-jurisdictional files that applies the more protective confidentiality or privacy rule among the jurisdictions involved.
- Guaranteed versus non-guaranteed
- A disclosure distinction between policy elements the insurer promises and those dependent on assumptions, which must be explained in plain language.
- Good-faith reporter
- A person who reports suspected misconduct honestly and without malice, protected from retaliation and entitled to confidentiality where the law allows.
- Claims fairness
- The duty to handle claims promptly and fairly according to the policy as written, explaining any decline and the available review options.
- Commission bias
- A personal bias toward recommending products that pay higher compensation, which the licensee must recognize and correct to protect suitability.