Ethics

Question 1

Utmost good faith is supported by:

Answer 1

Materiality
Misrepresentation
Non-disclosure or concealment

Question 2

Material facts can be divided into two time periods

Answer 2

(1) facts as they exist up to the time a contract is formed

(2) new facts that arise after the contract is formed

Question 3

Four key steps to remedy a privacy breach

Answer 3

(1) contain - the breach and assess ways to reduce harm
(2) evaluate - risks associated with the breach
(3) determine - who needs to be notified of the breach
(4) prevent - future breaches by determining how the breach happened

Question 4

Best defence for intermediaries against errors and omissions (E&O) claims

Answer 4

Documentation, communication, action

Question 5

Code of conduct principles for Alberta

Answer 5

(1) trustworthiness
(2) good faith
(3) competence
(4) financial integrity
(5) dealing with clients
(6) dealing with insurers
(7) dealing with agents
(8) dealing with the public
(9) conduct specific to agents acting as insurance adjusters
(10) dealing with the Alberta Insurance Council
(11) compliance with governing legislation and the code

Question 6

Examples of misconduct, trustworthiness:

Answer 6

• misappropriating funds
• using confidential client information for something else
• false insurance claims
• false declarations to insurers

Question 7

Examples of misconduct, good faith

Answer 7

• signed as witness on documents when not in fact seen sign
• directed an unlicensed employee to act as an agent
• used premium money for personal use
• accessed client information without authority

Question 8

Examples of misconduct, competence

Answer 8

• sold an insurance policy that was inappropriate given the clients stated objectives and circumstances and that a prudent agent wouldn’t have recommended
• failed to properly manage the business and financial aspects of an agency

Question 9

Examples of misconduct, financial integrity

Answer 9

• failed to account for unauthorized transactions from a bank account over which the agent held power of attorney
• failed to refund all money due to a client in accordance with the cancellation provisions set out in a clients insurance contract

Question 10

Examples of misconduct, dealing with clients

Answer 10

• an agent failed to fully assess a clients needs and objectives and neglected to advise the client of changes to the insurance plan as a consequence of a medical condition
• agent provided a copy of a clients insurance policy to other customers as an example of the product being offered

Question 11

Examples of misconduct, dealing with insurers

Answer 11

• agent failed to remit to the insurer all premiums collected or received in accordance with the terms of the agency’s agreement to the insurer
• offered and bound terms under a policy that were not authorized by the insurer

Question 12

Example of misconduct, dealing with the public

Answer 12

• advertising a premium that is subject to undisclosed requirements
• an agent must not defame or discredit the industry

Question 13

Example of misconduct, dealing with the Alberta insurance council

Answer 13

• failing to reply within the time specified to a request from the AIC
• making material misstatements in reply to a request from the AIC
• swearing a false affidavit