Chapter 7 - Section 1

Question 1

Who is responsible for the administration of the insurance act in your province?

Answer 1

• A government department

- Separate insurance counsels

Question 2

Outline the initial licensing requirements, whether there are different levels of licenses, the supervision requirements, and license terms in your province

Answer 2

Saskatchewan
-Applicants must be sponsored by the brokerage firm that employs them
- Applicants must be of good character and reputation and must pass an approved exam
- Step licensing program (CAIB) required. 3 levels:
Level I - CAIB 1: licensed for all lines of insurance under supervision
Level II - CAIB 2 & 3: All lines without supervision
Level III - CAIB 4: All lines and qualified to own/manage a brokerage
- License issued for 1 year (renew yearly)

Question 3

Outline the class of license issued in our province and whether this license would be valid in other provinces

Answer 3

• Brokers generally receive an All Classes (other than life) license and are prohibited from selling other classes of insurance unless so licensed
• Brokers must be licensed in each province in which they do business

Question 4

Define “ethics”

Answer 4

The principles of conduct governing an individual or group

Question 5

Identify three temptations that could cause a broker to act unethically

Answer 5

• To sell more insurance
• To sell higher priced coverage when equivalent coverage is available at a lower price
• To recommend the policy with the highest commission percentage

Question 6

Identify six (five?) reasons why your license to practice as an insurance broker may be revoked

Answer 6

• Is guilty of misrepresentation, fraud, deceit or dishonesty
• Contravenes any provision of The Insurance Act or its equivalent
• Unreasonably fails to pay to an insurer premiums collected and retained beyond the term stipulated in the Agency Agreement
• Places insurance with unlicensed insurers without complying with legislation relating to unlicensed insurers; or
• Proves to be incompetent or untrustworthy to transact insurance agency business for which the license has been granted

Question 7

Professional brokers associations at both the provincial and national levels are governed by codes of conduct which set ethical standards of a level than more compliance with the law. Outline three duties brokers owe to each of the following:

Clients

Answer 7

• To provide coverage best suited to the client’s needs, regardless of the premium, and to not take advantage of a client’s lack of experience or insurance knowledge
• To be competent to perform the services undertaken on the client’s behalf
• To serve clients in a conscientious, diligent and efficient manner

Question 8

Professional brokers associations at both the provincial and national levels are governed by codes of conduct which set ethical standards of a level than more compliance with the law. Outline three duties brokers owe to each of the following:

Insurers

Answer 8

• To abide by the terms of the Agency Agreement
• To adhere to the binding authority granted by the insurer
• To deal honestly with monies held in trust for the insurer

Question 9

Professional brokers associations at both the provincial and national levels are governed by codes of conduct which set ethical standards of a level than more compliance with the law. Outline three duties brokers owe to each of the following:

Fellow Brokers

Answer 9

• To co-operate in every reasonable way for the betterment of the industry
• To treat fellow brokers with respect
• To not harm the reputation of a fellow broker

Question 10

Outline three characteristics showed by all professionals, including brokers

Answer 10

• A commitment to high ethical standards
• A high standard of educational preparedness and training, with mandatory continuous education
• A formal association or society with regulating power over its members