Podcast
Questions and Answers
Who is primarily responsible for the administration of the Insurance Act?
Who is primarily responsible for the administration of the Insurance Act?
- The Provincial Minister of Finance
- The Insurance Advocacy Group
- The Superintendent of Insurance (correct)
- The Registered Insurance Brokers Council
Which statement accurately describes the licensing requirements for insurance brokers?
Which statement accurately describes the licensing requirements for insurance brokers?
- Passing an approved exam is mandatory for all applicants. (correct)
- Only self-employed insurers need a sponsorship.
- No background check is required for applicants.
- An applicant can apply without being sponsored by a brokerage.
What distinguishes a Level I licensee in the STEP licensing system?
What distinguishes a Level I licensee in the STEP licensing system?
- They are allowed to manage a brokerage firm.
- They can transact auto insurance at any location.
- They have unsupervised sales authority.
- They can sell all types of insurance only within the brokerage office. (correct)
What is a requirement for obtaining an initial insurance license?
What is a requirement for obtaining an initial insurance license?
What level of supervision is required for a Level I licensee?
What level of supervision is required for a Level I licensee?
Which province has established the Registered Insurance Brokers of Ontario Act?
Which province has established the Registered Insurance Brokers of Ontario Act?
What limitation exists for Level II licensees regarding brokerage management?
What limitation exists for Level II licensees regarding brokerage management?
How can Level I licensees perform insured transactions at auto dealerships?
How can Level I licensees perform insured transactions at auto dealerships?
What is a feature of Level III licenses in the licensing system?
What is a feature of Level III licenses in the licensing system?
What is the maximum duration of a license in most provinces?
What is the maximum duration of a license in most provinces?
Which of the following must be true for a broker to insure property in a province?
Which of the following must be true for a broker to insure property in a province?
What constitutes the basis for possible termination of a broker's license?
What constitutes the basis for possible termination of a broker's license?
What is considered illegal rebating in the context of insurance licensing?
What is considered illegal rebating in the context of insurance licensing?
What type of license is necessary to sell travel insurance in Ontario?
What type of license is necessary to sell travel insurance in Ontario?
Which of the following best describes the licensing term in British Columbia?
Which of the following best describes the licensing term in British Columbia?
What level of license allows unrestricted management and technical activities?
What level of license allows unrestricted management and technical activities?
What may lead to the termination of a broker's license according to the Insurance Act?
What may lead to the termination of a broker's license according to the Insurance Act?
Which principle is NOT part of the three key principles intermediaries must follow as per the CCIR report?
Which principle is NOT part of the three key principles intermediaries must follow as per the CCIR report?
What constitutes a breach of integrity for brokers as outlined in the standards of conduct?
What constitutes a breach of integrity for brokers as outlined in the standards of conduct?
Which action reflects misuse of trust funds by a broker?
Which action reflects misuse of trust funds by a broker?
What is a consequence of placing insurance with unlicensed insurers?
What is a consequence of placing insurance with unlicensed insurers?
Which of the following is an ethical conduct standard required of brokers?
Which of the following is an ethical conduct standard required of brokers?
What could be a reason for the revocation of a broker’s license besides failing to submit premiums?
What could be a reason for the revocation of a broker’s license besides failing to submit premiums?
What does the obligation to disclose conflicts of interest entail for brokers?
What does the obligation to disclose conflicts of interest entail for brokers?
What is expected of brokers regarding their knowledge and services?
What is expected of brokers regarding their knowledge and services?
Which of the following would be considered conduct that does NOT meet the standard of quality of service?
Which of the following would be considered conduct that does NOT meet the standard of quality of service?
What is required of brokers when making recommendations to clients?
What is required of brokers when making recommendations to clients?
What practice is explicitly discouraged for brokers regarding insurance sales?
What practice is explicitly discouraged for brokers regarding insurance sales?
What must brokers disclose to clients if they receive incentives for placing business?
What must brokers disclose to clients if they receive incentives for placing business?
Which of the following is NOT an example of conduct that does not meet the advisory standards?
Which of the following is NOT an example of conduct that does not meet the advisory standards?
How should brokers handle communications with clients?
How should brokers handle communications with clients?
What does the term 'tied selling' mean in the context of broker conduct?
What does the term 'tied selling' mean in the context of broker conduct?
Why is confidentiality important for brokers in their relationship with clients?
Why is confidentiality important for brokers in their relationship with clients?
What must brokers do if their fees exceed the premium charged by the insurer?
What must brokers do if their fees exceed the premium charged by the insurer?
Which of the following best describes an 'unconscionable' fee?
Which of the following best describes an 'unconscionable' fee?
What should brokers aim to preserve in the eyes of the public?
What should brokers aim to preserve in the eyes of the public?
What obligation do brokers have regarding breaches of insurance regulations?
What obligation do brokers have regarding breaches of insurance regulations?
What is a common goal of professional associations for brokers?
What is a common goal of professional associations for brokers?
What is a characteristic of the code of conduct for provincial brokers associations?
What is a characteristic of the code of conduct for provincial brokers associations?
How should brokers communicate with their clients according to standards of conduct?
How should brokers communicate with their clients according to standards of conduct?
Flashcards
Insurance Intermediary Regulation
Insurance Intermediary Regulation
Provincial Insurance Acts govern how insurance brokers are regulated.
Provincial Administrators
Provincial Administrators
Different provinces have different administrators (Superintendent, Commissioner) for insurance regulations.
Insurance Councils Function
Insurance Councils Function
Licensing, complaints, and disciplinary actions are handled by Insurance Councils in some provinces.
Insurance Broker Licensing
Insurance Broker Licensing
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Licensing Requirements
Licensing Requirements
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Step Licensing System
Step Licensing System
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Broker License Classifications
Broker License Classifications
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License Duration
License Duration
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License Renewal (Ontario)
License Renewal (Ontario)
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License Renewal (BC)
License Renewal (BC)
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Ethical Insurance Broker Standards
Ethical Insurance Broker Standards
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License Revocation Grounds
License Revocation Grounds
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Rebating Prohibition
Rebating Prohibition
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Code of Conduct
Code of Conduct
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Client Confidentiality
Client Confidentiality
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Public Perception Impact
Public Perception Impact
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Reporting Regulatory Issues
Reporting Regulatory Issues
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Study Notes
Regulation of Brokers and the Insurance Act
- Regulation of insurance intermediaries is governed by provincial laws, specifically each province's Insurance Act.
- Administration duties are assigned to the Superintendent of Insurance, Superintendent of Financial Institutions, or Commissioner depending on the province.
- In provinces like BC, AB, SK, and MB, Insurance Councils handle licensing, complaints, and disciplinary actions for brokers.
Licensing Standards
- All individuals selling insurance must be licensed and sponsored by a brokerage or insurer.
- Initial licensing requires good character and passing an approved examination; specifics vary by province.
- A step licensing system exists in BC and Ontario with three levels, each granting different sales permissions and requiring supervision.
License Classifications and Terms
- Brokers generally receive an "All Classes (Other Than Life)" license, requiring additional licensing for other insurance types, like travel insurance in Ontario.
- License durations vary; Ontario has annual renewals while BC has continuous licenses with yearly updates.
Ethical Standards and Compliance
- High ethical standards are essential; grounds for revocation include misrepresentation, failure to hold client premiums, and involvement with unlicensed insurers.
- Ethical breaches like rebating, where brokers return part of the premium to induce purchases, are illegal in most provinces.
Code of Conduct and Client Interaction
- Codes of Conduct set by Insurance Councils and professional associations emphasize integrity, competence, quality service, and transparency in client relationships.
- Brokers are required to maintain confidentiality with client information, ensuring trust and compliant communication about policies and fees.
Public Perception and Professionalism
- Brokers play a crucial role in shaping public perceptions of the insurance industry, requiring a commitment to transparent and professional behavior to uphold industry integrity.
- Reporting regulatory breaches is necessary to prevent further issues, ensuring professionalism is upheld within the brokerage community.
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