LLQP Ethics & Professional Practice (Common Law) Cheat Sheet — Rules, Checklists & Glossary

Use this as your last-mile review. Pair it with the exam guide, Study Plan, FAQ, official resources, and LLQP Ethics Common Law practice questions.

This is educational content, not legal advice. Rules and terminology can vary by province/territory and regulator—confirm local requirements.

Ethics module in one picture (pick the safest next step)

    flowchart TD
	  A["Scenario"] --> B["What is the risk? (legal/ethical)"]
	  B --> C["What is missing? (facts/consent/disclosure)"]
	  C --> D["Safest next step (process)"]
	  D --> E["Document"]

Exam reflex (works like a cheat code):

1. State the risk in one sentence.
2. Identify what’s missing (facts, consent, authority, documentation).
3. Choose the next step that is truthful, fair, consented, and documented.

The “safe answer” ladder (when you’re unsure)

When two answers both seem reasonable, the better answer usually:

1. gathers missing facts before recommending
2. explains limitations/exclusions and trade-offs in plain language
3. obtains required consent for sensitive info (privacy)
4. documents what was said/decided
5. avoids pressure, misleading statements, or conflicts

Topic 1 (60%) — Legal aspects of insurance and annuity contracts (high yield)

Sources of law (know what is binding vs guidance)

Capacity and authority (classic test area)

Common-law exam cues:

• minors or age-of-majority issues → verify capacity/authority (jurisdiction-specific)
• corporate ownership → verify signing authority and insurable interest (concept)
• divorce/second marriage → beneficiary/ownership review and documentation

Parties and roles (don’t mix these up)

Contract formation (high level)

Most scenario questions are testing sequence:

• application + disclosure → underwriting → acceptance → contract takes effect (policy-specific)
• interim coverage (conditional receipts) exists only if conditions are met (concept; policy-specific)

Privacy and consent (high yield)

Default safe behaviour:

• collect only what you need (data minimization)
• obtain consent before collecting/disclosing sensitive info (medical/financial)
• share only with authorized parties (need-to-know)
• document consent and disclosures

Tort risk: negligence and negligent misrepresentation (concept)

If the scenario shows:

• poor fact-finding + client relied on it → misrepresentation risk
• “it’s guaranteed”/“it covers everything” statements → misleading statement risk
• missing documentation → harder to defend decisions later

Topic 2 (40%) — Rules governing agent activities (high yield)

Practice hygiene checklist (what answers reward)

• know your scope; don’t pretend to be a lawyer/accountant
• recommend only after fact-finding and suitability assessment
• disclose trade-offs and limitations honestly
• avoid conflicts (or disclose/manage them per rules)
• keep records: what you asked, what client said, what you recommended, what they decided

Prohibited / deceptive practices (common patterns)

High-frequency exam cues include:

• misleading marketing statements
• pressure tactics or “sign now” coercion
• twisting/replacement without fair comparison and documentation
• improper inducements (fact- and rule-specific; treat as a red flag)

Complaints and escalation (high level)

If a complaint arises, the safest answer usually includes:

• acknowledge and document the complaint
• follow the firm’s complaint-handling process
• escalate to compliance/supervisor as appropriate
• avoid “fixing it quietly” in a way that hides facts

Common exam traps

• Answering with a product recommendation when the scenario is a process question.
• Treating guidance or marketing claims as if they override contract terms.
• Skipping consent when sensitive data is involved.
• Confusing owner/insured/beneficiary authority.
• Assuming beneficiary intent “doesn’t matter” because it’s just paperwork.

Glossary (high-yield)

• Common law: judge-made law from court decisions; applies in common-law jurisdictions.
• Statute: a law passed by a legislature.
• Regulation: detailed rules made under authority of a statute.
• Guidance: regulator-issued expectations; may not be law but can be enforced through supervision.
• Utmost good faith: duty in insurance to deal honestly and disclose material facts (concept).
• Material misrepresentation: incorrect/omitted information that would influence underwriting or contract terms (concept).
• Negligence: failure to meet a reasonable standard of care resulting in harm (concept).
• Negligent misrepresentation: providing incorrect information negligently, relied on by another, causing loss (concept).
• Capacity: legal ability to enter a contract (can be affected by age/authority).
• Policyowner: person/entity that owns and controls the policy.
• Insured: person whose life/health risk is being insured.
• Beneficiary: person/entity designated to receive proceeds on death (or other contract triggers).
• Trustee: person/entity holding property for another’s benefit (e.g., minor beneficiaries).
• Consent (privacy): authorization for collecting/using/disclosing personal information (requirements vary).
• Suitability: ensuring the recommendation fits the client’s needs, circumstances, and constraints (concept).
• Conflict of interest: situation where personal/financial incentives could compromise duty to the client (concept).

Next: return to the exam guide for module structure, then use LLQP Ethics Common Law practice questions when you are ready to drill timing and explanations.

Practice this exam

Use this free guide for review, then Start LLQP Ethics Common Law Practice on Finance Prep for timed questions, topic drills, and detailed explanations.