LLQP Ethics

  1. What takes the highest precedence over all sources of Canadian Law?
    The Canadian Constitution
  2. How is Common Law developed?
    By judges based on the decisions of courts and similar tribunals.
  3. Are annuity contracts issued by insurers considered life insurance under provincial and territorial legislation?
  4. What are the two types of life insurance agents?
    • Independent agents
    • Captive agents
  5. Provinces and territories have their own insurance legislation based on a 1920's model called what?
    The Uniform Law Conference
  6. What happens if a policyholder moves to a different province than the one where their insurance policy was originally issued?
    The new province's laws will apply to certain aspects of their estate, such as their will.

    However, the law that applies to the interpretation contract (including the naming of beneficiaries) will be the law of the province where the policy was contracted.
  7. What are the 2 elements of presumed "legal capacity" in Ontario?
    • The person is 18+ is presumed to be capable of entering into a contract
    • A person who is 16+ is presumed to be capable of giving or refusing consent in connection with their own personal care
  8. What is a natural person?
    A human being, who has legal capacity to make decisions about their person and property and to bear the risks and rewards of those decisions.
  9. What is a partnership?
    An arrangement between two or more parties carrying on business together to make a profit. They can be individuals or corporations, and each is liable for contracts entered into by other partners on behalf of the partnership.
  10. What is a Legal Person (Corporation)?
    A corporation can be described as its own entity, separate from those that own or manage it. They buy, sell, and own things, and can be sued.
  11. What is the difference between Power of Attorney and Enduring Power of Attorney?
    • Power of attorney allows the appointed person "attorney" to deal with the business and property of another, and make legal and financial decisions on their behalf. It can be specific or broad.
    • Enduring power of attorney is the same as power of attorney, except that the "attorney" may also make decisions if the donor (or "prinicipal's") becomes mentally incapable of making their own decisions.
  12. How does Enduring Power of Attorney differ from a Living Will?
    A power of attorney simply allows one to act on behalf of another, whereas a living will simply addresses the treatment and personal care wishes in general, and does not name anyone or is written in any certain way.
  13. What does the term "succession law" deal with?
    Succession Law applies to the body of provincial law that deals with deceased persons' estates and the rules governing property-passing as a result of death.
  14. What are the names of the people appointed to be in charge of another's estate, and what does their duty involve?
    • Executor (male)
    • Executrix (Female)
    • Estate Trustee (Gender Neutral)
    • They have the legal obligation to pay the debts (including taxes) of the deceased from their estate assets, and to manage and distribute the remaining assets in accordance with the terms of the will.
  15. What is the name of someone who died with no will? With a will?
    • Intestate
    • Testate
  16. What is a tort?
    A tort is a civil wrong, which causes someone loss or harm and creates liability for the wrongdoer.
  17. What is a limitation period?
    A timeframe during which a court action must be started, or the right to sure is gone forever.
  18. In order to establish enduring POA, what two things need to be on the document?
    • Whether the Enduring POA is valid immediately, or only when the donor is incapable of making their own decisions.
    • That the POA is valid even after the donor is deemed mentally incapable.
  19. An attorney is not usually permitted to be the beneficiary on a policy. What are the two exceptions to this rule?
    • A court order gives the attorney the right to name the beneficiary
    • A transfer is being made from one financial institution where a valid beneficiary was previously named, and the same beneficiary is being named at the new institution.
  20. What is the significant difference between the Privacy Act and the Personal Information Protection and Electronics Documents Act?
    • Privacy Act: Legislates how federal government and its agencies handle private information.
    • PIPEDA: Establishes how business (including federally regulated businesses) and other organizations can use and collect personal information.
  21. On a life insurance policy, who would like be the "claimant"?
    The benficiary
  22. In an employer-sponsored group plan, who would likely be the certificate holder?
    The employee
  23. What is an annuity?
    Annuities are policies issued by insurers or other financial institutions where they agree to pay a fixed amount to a payee over a specified period of time.
  24. Are deferred (accumulation) annuities taxable?
    During the accumulation phase, they are taxable. However, registered accumulation annuities which are a form of RRSP are not subject to taxation.
  25. What is the main risk associated with ASO contracts?
    High risk to corporate cash flow.
  26. Do segregated funds offered as a group plan carry a guarantee?
  27. What is material misrepresentation?
    Any misrepresentation of information that could have affected the underwriting decision in some way.
  28. What specifically must be done to make a beneficiary irrevocable?
    They must file the designation with the head office of the insurer.
  29. Life insurance contracts are unilateral contracts. What does this mean?
    That the insured can cancel for any reason, but the insurer can only cancel under specific circumstances.
  30. By what date must an RRSP plan holder collapse his or her RRSP?
    By December 31st of the year that the RRSP plan holder turns 71.
  31. When does coverage under TIA cease?
    • The main policy is approved
    • The main policy is declined
    • A certain specified time has passed (e.g: 90 days)
  32. If a group plan member decides to leave the group plan, what conversion privileges would he have?
    He can convert the group plan into an individual plan with no evidence of insurability (no medical underwriting), and must be done within 31 days of the group coverage ceasing.
  33. If a policy has lapsed, termination is not final as long as two conditions are met. What are these two conditions?
    • The policyholder applies for reinstatement within 2 years of cancellation
    • The insurer determines that the insured is still insurable (based on current health status etc...)
  34. Name 3 times when an insurer can cancel a policy.
    • Material misrepresentation found during the first 2 years of the policy
    • Fraudulent material misrepresentation at any time during the policy
    • Non-payment of premiums after grace period
  35. Give an exclusion of operation by law on a life insurance policy.
    The beneficiary who murders the life insured would not be paid because it violates public policy.
  36. Give an example of a contractual exclusion on a life policy.
    Suicide would be a contractual exclusion in the first two years, as this is stated in the contract beforehand.
  37. Name some things which the policyholder must obtain the approval of the irrevocable beneficiary.
    • Change the beneficiary
    • Borrowing against the policy
    • Full or partial surrender
  38. Can a bank sell annuities?
    Yes, only term annuities, not life annuities.
  39. Benny invested $100k in a segregated fund 3 years ago. He just passed away. How much can his beneficiaries expect to receive?
    IVIC's guarantee a minimum of 75% of the original investment at maturity or upon the annuitant's death.
  40. What is the difference between twisting and churning?
    • Twisting is getting a client to cancel their existing policy and reinstate a new one with a different insurer.
    • Churning is getting a client to cancel their existing policy and reinstate a new one with the same insurer.
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LLQP Ethics
LLQP Ethics