LLQP Regulation, Law & Compliance Practice Questions
Regulation, Law & Compliance makes up 4 of every 50 questions on a Tigertest LLQP practice test. Here are 10 of the 16 questions on it, each with the answer and the reason.
Updated by the Tigertest team. Based on the harmonized LLQP's four modules, Canadian law and CCIR/CISRO guidance as of November 2026. Original questions; 50 per test, mixing the modules in proportion. Not affiliated with CISRO, any provincial regulator or the AMF.
1. Who licenses life insurance agents in Canada?
- A.Each insurance company acting on its own
- B.Provincial and territorial regulators
- C.The federal Department of Finance
- D.The CLHIA industry association
Answer: B. Agent licensing is provincial and territorial, through a regulator or insurance council (in Quebec, the AMF). The CLHIA is an industry association.
2. OSFI's role in life insurance is mainly to supervise:
- A.Provincial health plans
- B.Complaints made about agents
- C.Agents' sales practices
- D.Insurers' financial soundness
Answer: D. The Office of the Superintendent of Financial Institutions oversees the financial soundness of federally incorporated insurers. Market conduct is provincial.
3. CISRO is best described as:
- A.A forum of agent and broker regulators
- B.A consumer complaints office
- C.A federal insurance regulator
- D.An association of insurance companies
Answer: A. The Canadian Insurance Services Regulatory Organizations brings together the provincial and territorial bodies that regulate agents and brokers, and it oversees the LLQP curriculum.
4. The Canadian Council of Insurance Regulators (CCIR) mainly:
- A.Insures failed insurers' clients
- B.Hears agents' legal cases
- C.Coordinates regulators' policy
- D.Sells insurance to the public
Answer: C. CCIR is an association of insurance regulators that develops common policy, such as the Fair Treatment of Customers guidance, often jointly with CISRO.
5. A client's complaint was not resolved by the insurer's internal process. She can next take it, free, to:
- A.OSFI, the federal regulator
- B.The CLHIA, the industry association
- C.OLHI, the industry ombudservice
- D.Assuris, the protection fund
Answer: C. OLHI is an independent complaint service for life and health insurance consumers after the company's own process is exhausted.
6. Why must a licensed agent usually carry errors and omissions insurance?
- A.To cover claims of negligent advice
- B.To pay the yearly licence fee
- C.To replace a client's lost policy papers
- D.To insure the client's own life
Answer: A. E&O insurance protects the agent (and clients) if the agent is sued for a professional error or omission. It is required in most provinces.
7. Which elements must every valid contract have?
- A.A court filing and a filing fee
- B.A notary, a witness and a stamp
- C.Signatures from both spouses
- D.Offer, acceptance, consideration
Answer: D. A legally binding contract needs an offer and acceptance, consideration, parties with capacity and a lawful purpose.
8. An insurance contract is called a contract of adhesion because:
- A.It cannot ever be cancelled by either side
- B.The insurer alone writes its terms
- C.Both sides negotiate each term
- D.It sticks to one province only
Answer: B. The applicant must take or leave the insurer's wording, so courts read ambiguous terms against the insurer that drafted them.
9. Utmost good faith in insurance means the applicant must:
- A.Accept any claim decision made
- B.Disclose all material facts
- C.Pay premiums in advance
- D.Use a licensed lawyer
Answer: B. Insurance relies on the applicant's honesty; failing to disclose facts that would affect the insurer's decision can void the contract.
10. Under agency law, which party does a life agent usually represent when taking an application?
- A.The provincial regulator
- B.The client's employer
- C.The beneficiary
- D.The insurer
Answer: D. A life agent acts as the insurer's agent under an agency contract; what the agent says and does within that authority can bind the insurer. Brokers may also owe duties to the client.
Practice all 16 regulation, law & compliance questions, and the rest of the 200-question bank, in the free LLQP training sets. Questions you miss come back until you have mastered them.
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