Annuities and Underwriting Practice Question

Question

A supervisor reviews a case with a trainee for the Life and Health Insurance License Exam involving unfair trade practice in Annuities and Underwriting. Which option best reduces risk or error? (Item 78)

Answer choices

1. A. Rely on informal custom instead of the applicable rule, control, or standard.
2. B. The best answer is to choose the insurance answer that best reflects policy features, consumer protection, suitability, and ethical producer conduct for the unfair trade practice scenario.
3. C. Skip verification because the previous case had the same answer.
4. D. Document nothing because documentation could create follow-up questions.

Correct Answer

B. The best answer is to choose the insurance answer that best reflects policy features, consumer protection, suitability, and ethical producer conduct for the unfair trade practice scenario.

Explanation

The correct answer is B because unfair trade practice is tested by asking candidates to choose the insurance answer that best reflects policy features, consumer protection, suitability, and ethical producer conduct. The distractors reflect common exam mistakes: ignoring context, using informal shortcuts, skipping verification, or applying a rule from the wrong domain.

Question details

• Difficulty: medium
• Domain: Annuities and Underwriting
• Objective: unfair trade practice

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