Ethics for Financial Services Professionals FINAL EXAM (IL 6000112038)

In which step of the sales process should a life insurance agent normally use a sales track and a data-gathering form?

If you deal with your client in the way that you would like to be dealt with if the roles were reversed, what are you using as the basis for your relationship?

Using force to solve disagreements is likely to cause all of the following EXCEPT:

What offers optimum rather than minimum standards of conduct?

Which of the following is not a subject over which the insurance practitioner generally has ethical control?

Which of the following is a common characteristic of unethical sales practices?

Which of the following is NOT a characteristic component of a profession?

Minimum conduct requirements, rather than optimum standards of conduct, are provided by a system of ethics.

George’s client told him she did not want to be “bothered” with details concerning expiration of her coverage since she had employees who handled such matters. When the client subsequently brought a lawsuit against George for his failure to inform her that her coverage had expired, what defense is George likely to maintain?

What is not a result of increased professional status for the insurance agent?

When an insurer knowingly permits its agents to engage in unethical sales practices, it intends to give them authority to do so, even though the granting of such authority is not in their contract. What type of authority is the insurer giving the agents?

Through the McCarran-Ferguson Act, the federal government retains the power to control the insurance industry when the issues involved are _________.

The individual states are specifically charged with regulating matters regarding which of the following?

What gives the federal government the power to control the insurance industry when the issues involved are deemed “national”?

Which of the following is a federal responsibility rather than the responsibility of state insurance regulators?

All of the following are common requirements found in state insurance laws EXCEPT:

For the law of agency to require that an insurer be bound by the actions of its agent, what must the agent’s actions be?

What type of authority is conferred through explicit statements made in an agent’s contract with an insurer?

An agent’s authority to telephone prospects to arrange sales appointments is not normally stated in the contract but is intended to be given. What type of authority is this?

Which of the following is characteristic of express authority?

Which of the following is characteristic of implied authority but not of apparent authority?

Since it is not usually stated in an agency contract but is intended to be granted, an agent’s authority to make telephone calls to arrange sales appointments is an example of what type of authority?

Which of the following is not a defense to a charge of malpractice that an agent may offer?

Bill is a life insurance agent who has done business with Gary for many years. Gary traditionally purchased term insurance coverage and would customarily contact Bill before it expired to purchase new coverage. Gary failed to contact Bill before his current policy expired, and now Gary finds that he is uninsurable. Gary has sued Bill for failing to notify him that his coverage was expiring. Since it was customary for Gary to contact Bill before coverage expiration, what defense is Bill likely to maintain?

Which of the following is characteristic of the defense against claims known as “waiver”?

Unlike waiver, which refers to a right that is intentionally given up, what does estoppel involve?

The term caveat emptor encapsulated the judicial approach to product liability during the first half of the twentieth century; what does this term mean?

Which of the following is not correct with respect to the term “let the buyer beware”?

What regulatory body is specifically charged with regulating matters relating to the ethical conduct of insurance agents?

What is another term for the judicial concept of “let the buyer beware”?

What is generally considered the overriding ethical issue with respect to an insurance practitioner’s sales tools?

An insurance practitioner’s business card must do which of the following?

Shirley Whitcomb is a certified financial planner whose business card and letterhead identify her as “Shirley Whitcomb & Associates, Certified Financial Planners.” Under what circumstances would Shirley’s business card and letterhead be acceptable?

What licensing or registration is generally required before an insurance agent may refer to him- or herself as a financial planner?

Since the presentation step is principally product-related, what is the main ethical concern in this step of the sales process?

Presenting an insurance or investment product that is suitable to meet the prospect’s needs is done in which step of the sales process?

Dave, an agent for MegaMutual, has just begun talking with Chris. Dave’s objective is to develop a rapport with Chris so that Chris will agree to proceed with a data-gathering interview. At what step in the sales process is Dave?

Which of the following is not an authority conferred under the law of agency?

Creating trust and rapport is the main function of which step of the sales process?

What is potentially the most serious ethical issue in the approach step of the sales process?

Under what circumstances may a life insurance agent claim affiliation with a government agency as a way to suggest governmental approval?

Sal is a life insurance agent for MultiMutual and does business as the Olde English Financial Group. Along with Sal’s name and telephone number, “Olde English Financial Group” is the only information on Sal’s business card. What ethical concern is raised?

When may an agent ethically refer to a life insurance policy as a “private pension”?

What is the objective of the fact-finding interview step of the sales process?

Which of the following is ethically required of the financial practitioner?

What is the overriding ethical issue with respect to product selection?

When should analogies to other products be used to explain a financial product?

What is the term for an insurer’s subsequent confirmation or approval of an agent’s unauthorized actions?

What constitutes a balanced comparison between financial products?

What is the name given to excessive trading in a client’s securities account to generate commissions?