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ETHICS (2022 LLQP) > ETHICS - SEEWHY VIDS > Flashcards

ETHICS - SEEWHY VIDS Flashcards

1
Q

3 SOURCES OF CDN INS LAW (CCL)

A
  1. CANADIAN CONSTITUTION
  2. COMMON LAW
  3. LEGISLATION AND REGULATION
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2
Q

CANADIAN CONSTITUTION

A
  • gives power to province to pass laws

- ins law–> provincial matter —> licensed in each prov

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3
Q

COMMON LAW

A
  • applies to all common provs—> so not quebec

- based on past decisions of the courts for current cases

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4
Q

to enter contract, you must have

A
  1. legal status

2. capacity to contract

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5
Q

natural person vs legal person

A

natural person: A human being (legal age and has mental capacity– so not mentaly ill, disabled, drunk)

Legal person: i.e a corporation or partnership

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6
Q

who is party to insurance contract

A
  1. policy holder
  2. life insurance
  3. insurance co

BENEFICIARY is not party to the contract–> bc anybody can be beneficiary , incl those who are not legal age or dont have mental capacity

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7
Q

types of beneficiaries

A
  • there are 3 types
  • REVOCABLE: can be changed by policy holder
  • IRREVOCABLE: cant be changed by policy holder + polcy holder cannot change or take away from policy, and cannot borrow funds from policy
  • CONTINGENT BEN: next in line, if 1st ben. dies, cont. ben get DB
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8
Q

creditor proofing

A
  • only if contract purchased in good faith– not just to hide money
  • protected class: parent, spouse, child, grand child
  • relationship btwn life insured and beneficiary deermines if protected class (except QC?)
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9
Q

legal docs that affect life ins contract (4)

A
  1. Power of Attorney (POA)
  2. Enduring POA
  3. last will + testament
  4. dying intestate–> w/o will
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10
Q

POWER OF ATTORNEY (POA)

A
  • LEGAL DOC where 1 person give auth to another to act on their behalf
  • can be for broad or specific tasks
  • 3 q’s:
    >do u trust this person to act for you?
    >full POA? or just specific tasks?
    >should they continue POA if you become mentally incapable (enduring POA)?
    Note: POA cannot execute last will bc they may take advantage (too much power)
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11
Q

ENDURING POA

A
  • continues (endures) even if person becomes mentally incapable
  • must have specific wording: STATE that POA continues if mentally incapable, STATE when POA effective (right away? or only after mentally incapable)
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12
Q

Last will + Testament

A
  • starts at death
  • addresses many matters, ie guardian of kids, distribution of assets
  • STATES: “I revoke all previous wills”
  • Instructs executor to pay all o/s debts from estate
  • strict laws to protect those they had moral obligation to: i.e married man cannot leave it all to mistress!!!
  • if seperated: no impact, existing will stands
  • if divorced: gets nothing
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13
Q

Dying Intestate

A
  • Dying w/o a will

- assets divided by province

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14
Q

Delivery of policy

A
  • policy not in force till delivered
  • change in insurability == ins co CAN cancel
  • when delivering policy–agent must ask if any change in insueability
  • client must sign no change
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15
Q

change in insurabilty

A
  • NEGATIVE change in health
  • panned foreign travel
  • change in occupation
  • POSITIVE change in $$$ (i.e won lotto)

if any change ins co can: still issue, decline, add exclusions

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16
Q

unconditional policy delivery

A
  • no requiremens, once premium rec’c, can deliver policy
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17
Q

10 day free look

A

MANDATED BY CLIA

10 dan free look period after policy delivered, cust. can cancel w full refund

18
Q

CLIA

A

Canadian Life + health Insurance Association

19
Q

Material (material misrep.)

A

information that could have impacted underwriting (i.e declined)

20
Q

if material mis rep, underwriter can:

A
  1. declinepolicy
  2. add exclusion
  3. rate policy

> > > no proof of fraud during INcontestability period<

21
Q

mis rep depends on:

A
  • when ins co realized misrep

- if was intentional (fraud)

22
Q

contestability period

A
  • 2 years
  • dont have to proove fraud
  • can: cancel policy or deny claim— even if mistake
23
Q

INcontestability period

A
  • after the 2 years contestability period
  • ## MUST PROOVE FRAUD to contest
24
Q

misstatement of age

A
  • if found, ins co will adjust coverage amount to reflect premium paid— so will get less death benefit to ref;ect premium paid

EXCEPTION: can cancel if misstmt of age if aplicant was above max age limit of issuing policy

25
Q

Suicide Exclusion period (incl reinstatement)

A
  • 1st 2 yrs of policy,
  • if suicide—-> DB not paid

after 2 yrs, if suicide—|> DB paid

If policy lapsed and was REINSTATED: period starts over

26
Q

assignment of policy: 2 types

A
  1. collateral

2. Absolute

27
Q

Collateral assignment

A

ins policy used as collateral for loa

if insuraed dies, policy pays off loan and leftovers go to beneficiary

28
Q

Absolute Assignment

A

Change in ownership—-> trf’e is new owner , can chg policy, borrow from policy, etc…

taxable disposition

limited in some prov + may be illegal

29
Q

prohibited sales practices (8)

A
  1. tied selling
  2. twisting
  3. churning
  4. premium rebating
  5. fronting
  6. trafficking in insurance
  7. commission sharing\
  8. referral
30
Q

tied Selling

A

purchase of 1 product conditional on purchase of another

31
Q

twisting

A

replacing policy w policy from DIFF ins co

LIRD required

32
Q

churning

A

replacing policy w policy from SAME ins co

LIRD required

33
Q

LIRD

A

Life ins replacement declaration form

helps protect client when changing policy (twisting/churning)

discloses thins client should know before switch

34
Q

Premium Rebating

A

ins co refunds/rebates portion of premium to client

35
Q

fronting

A

agent signs application on behaf of another person (licenced or not) when the signing agent never met with the clients

36
Q

Trafficking in insuance

A

agent acts as middleman btwn policy holder selling policy and buyer

illegal in newfoundland

discouraged everywhere else

37
Q

commission sharing

A
  • must be licensed

- must disclosed and agreed to b y client

38
Q

referral:

A
  • fee not contingent on sale– paid no matter what
  • cant be % of commissions
  • agent must ensure person referring didn’t engage if any ins related activities
  • disclosed to and agreed to by client
39
Q

ASO contracts

A
  • Admin Services Only
  • ins co will: track who is covered, assess claims, etc….
  • suitable for GIANT CORPS
40
Q

Assuris

A
  • not for profit org
  • protects cdn policy holders if ins co fails
  • if ins co fails, assuris trfs policies to solvent ins co
  • ALL ins co’s in canada MUST be part of Assuris
  • bad in vestments NOT COVERED

ETHICS (2022 LLQP) (7 decks)

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