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ETHICS (2022 LLQP) > CH.4 - RULES AND PRINCIPLES GOVERNING THE ACTIVITIES OF LIFE INS AGENTS + A&S INS AGENTS > Flashcards

CH.4 - RULES AND PRINCIPLES GOVERNING THE ACTIVITIES OF LIFE INS AGENTS + A&S INS AGENTS Flashcards

1
Q

PROV+TERR regulatory authorit licenced by ies

A

Fed supervision under ins. companies act + OSFI : detemine financil soundness of fed inc life ins co’s

prov+terr: determine finan cial soundness + licensing ins agents + reguating licencing of insurers + market conduct

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2
Q

prov+terr ins regulators: Ontario

A

life ins agents , a&s agents + corp agencies licenced by FSRA (REPLACED FSCO) + also regulates insurers

GOVERNED BY Insurance Act

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3
Q

FSRA

A

FINANCIAL SERVICES REGUKATORY AUTHORITY

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4
Q

FSCO

A

FINANCIAL SERVICES COMMISION

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5
Q

CISRO

A
  • canadian insurane services regulatory organizations
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6
Q

CISRO , what do they do?

A
  • primary responsibility: admminister regulatory system, applicable to ins intermediaries, under their auth
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7
Q

Other authorities providing client protection (5)

A
  1. Office of the privacy comissioner of canada
  2. FINTRAC (Financial txs and reports analysis centre of canada)
  3. ASSURIS
  4. OLHI (Ombudservice for life and health insurance)
  5. CCIR (Cdn council of insurance reguators)
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8
Q

Office of the privacy commissioner Of canada

A
  • administers enforcement of PIPEDA + protects and promotes privacy rights of individuals
  • except– BC, AB, QC
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9
Q

FINTRAC

A
  • Financial Txs and Reports Analysis Centre of Canada
  • ## ensures life ins agents , etc, comply w canadas proceeds of crime (money laundering) and terrorist financing act
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10
Q

FINTRACT focus (4+1)

A
  1. Ascertain each clients identity and confirm existence of entities
  2. 3rd party determination
  3. determination of the purpose
  4. determination of politically exposed ppl + head of intl orgs
  5. obligation to report suspicious txs, terrorist property, large cash txs
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11
Q

Ascertaining each clients identity

A
  • under FINTRAC, 3 ways to verify identity
  1. GOV issued photo ID
  2. Credit on file method
  3. Dual process method

pg 106– skipped some, add later if need to

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12
Q

3rd party determination

A

applicant on behalf of 3rd party (POA or nominee)—> must keep 3rd party determination record specifying:

  • 3rd party -individual: name, add, DOB, biz/occ
  • 3rd party entity: name, add, nature of bizz, inc #, place of corp
  • relationship btwn 3rd aprty and client
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13
Q

determination of PEP (politically exp persons) and heads of intl org.s( HIO)

A

PEP, HIO, OR FAMILY MEMBER OF

If makes lump sum $100k or more, establish source of fuds

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14
Q

Determination of the purpose

A
  • client must indicate pupose of product purchasing + how will be used
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15
Q

obligation to report suspicious txs

A
  • all conducted or attempted sus txs –> report FINTRAC)
  • SUS TXS INDICATRS— pg 109
  • report terroist property: report to RCMP + CSIS
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16
Q

OBLIGATION TO REPORT LARGE CASH TXS

A
  • report: single dep of $10k or more or 2 or mroe $10,000 dep. w/in 24 hr

dep of $100k or mroe:
- check is PEP w/in 15 days

-

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17
Q

POLITICALLY EXPOSED PERSON (PEP)

A

FOREIGN PERSON who held gov or legal position in foreign country, incls their spouse or close family

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18
Q

Assuris

A

not for profit org protecting PH’s if ife ins company fails

all fed reg insurers must be part of assuris

assuris: see table pg 111

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19
Q

OLHI ( OmbudService FOR LIFE AND HEALTH INS)

A

A national independent complaint resoution org proiding clients w assistance to enquiries/ complaints

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20
Q

CCIR (Cdn council of insurance regulators) pg 111

A

facilitates and promotes efficient and effective insurance regulatory system in cda to serve public interest

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21
Q

Professional associations (5 CAICF)

A
  • CLHIA
  • advocis
  • IFB
  • CAILBA
  • FPSC

THEY PROMOTE PROFESSIONAL QUALIFICATIONS, continuos professional development, ethical behaviour

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22
Q

IAIS (International association of insurance supervisors )

A
  • represents insurance regulators
  • promotes effective and globally consistent supervision of ins industry
  • conteibutes to global financial stability
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23
Q

ICP 18 and 19 of IAIS

Insurance Core Principles

A

18: intermediaries: supervision of life ins agents
19: conduct of business: activities and behaviour of life ins agents

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24
Q

Acfing in good faith (3)

A
  • duty of care
  • integrity
  • competence
25
Q

Duty of care

A

Avoid careless acts or omissions

26
Q

Integrity (6 HTFRDR)

A

Be:

  • honest
  • trustworthy
  • fair
  • reliable
  • dependable
  • respectful
27
Q

Competence

A

Only conduct business for products/services licenced for (have competence)

28
Q

Conflicts of interest

A

Agent motivated to take action for own interest

  • prioritize clients interest
  • Disclose conlfixts or potential conflicts
  • product stability
29
Q

Produxt suitability (NPD)

A

Agent must:

  • perform needs analysis
  • recommemd produxts to meet needs
  • explain + document products recommended
30
Q

Product suitability: beet practices (DCFNRP)

A 
Disclosure 
Client expectations 
Fact finding
Needs assessment 
Recommend/advise
Product info
31
Q

Conflict of interest occupations

A

Must not be engaged in any biz/occupation that would jeopardize applicants integrity/independence/competence
- clergyman, police officer, liquor store employee

Must bot be in position to use coercion/undue influence to control, direct, secure biz

32
Q

Tied selling

A

Making purchase of 1 product required to purchase another

33
Q

Churning

A

Encourage client to guve uo 1 produ t for another to earn commission (with same insurer)

34
Q

Twisting

A

Convincing clinet to end 1 policy to replace with another (different insurer)

35
Q

Premium rebating

A

Agent gives back portion of premium

36
Q

Trafficking in insurance

A

Agent helps pilicyhilder sells their polocy (or abs. Assignment) to buyer

37
Q

Inducing to insure

A

Cannot use gift or offer payment to convince client to purchase insurance

38
Q

Fronting

A

Allowimg someone else to solicit business and submit to insurer under another agents name thAt sidnt meet client

39
Q

Unnecessary delay in delivering policy

A

Must not hold/retain documents for delivery

40
Q

Misrepresentation

A

Violation for any life insurance agent to make, issue, circulate any illustrations/sales material, or make any false statement

41
Q

Missappropriating client funds/ commingling of funds

A

Taking money or other property received from client for specific purpose and fradulently misapplying to other purpose

Cannot seposit client dund in to ur account

42
Q

MIing a false document (forgery)

A

Agent making false document knowingly

43
Q

Hilding out improperly

A

Pg 128

44
Q

Misusing comoany privided illustrations

A

Pg 129

45
Q

Defamation

A

Unethical for life ins agent to be maliciously critical/ derogatory about any colleague

46
Q

Making proper disclosure (4)

A

Product disclosure
Disclosure anput replacement
Commission sharing
Referral/ referral fees

47
Q

Product disclosure

A

Agent should provide complete info about the producy and how if meets clients needs + biz relationship w insurer

See pg 131 for key items

48
Q

Disclosure about replacement

A
  • how policies differ
  • why recommendation appropriate
  • risks of replacement
  • existing ins w possible cash values
  • negative tax consequences

LIRD- life ins replacement declaration

49
Q

Commission sharing

A

Payment or exchange of something of value based on % of commission

Agent must disclose to cliwnr

50
Q

Referral and referral fee

A

Fee paid for each lead/prospect whether a sale or jot

Cannot be contigent on sale
Cannot be % of commission UNLESS if being paid to another licenced Gent

Must disclose to clients

51
Q

Acting un compliamcd with eegulations and codes of conduct (3 - MDD)

A
  • maintaining req liability ins (E&O)
  • documemt file
  • deliver contract
52
Q

Majntaining S&O INS

A

Req by FSCO to have E&O coverage

Provides indemnity against negligence, error, ommision + protection for any financial losses may have incured

Doesnt protect against intentional acts, missapp., fraud, crime

53
Q

Documenting file

A

To protect against complaints/ lawsuits, keep detailed notes + correspondence of of orihinal txs, recommendations, cliemt acceptance

54
Q

Contract delivery

A

Do not deliver policy to client w/o verifying if any change in health or insuraniliyy

When policy delivered (win 30 days) must check insured still in good health

If any significant changes– do not give the policy

55
Q

Definition of complaint

A

Expression of dissatisfaction anout servixe peovided hy agent, may incl claim
For financial loss

56
Q

Complaint proceduce to follow

A

Maintain complaint log to track complaints

See pg 137-138 for more

57
Q

Core ethical values

A
  • acting in goos fair (core, competence, integrity
  • managing conflicts of interest properly
  • no unfair/deceptive practices
  • proper disclosure
  • complying w regilarion and codes of conducts
    Handling complaimts in fair and timely manner
58
Q

Fullt licemced agents can sell:

A
  • individual and group life ins
  • indibixual and group a&s
  • individual and group annuities
59
Q

Reviking licence

A

Superintendant maybeevike livemce if

  • violated any provision if licence
  • made material misstatmwnt or ommission
  • guilty of fraud
  • showed incompetence or untrustworthiness

ETHICS (2022 LLQP) (7 decks)

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