Module 3: Regulations Flashcards
Regulation 989
Composition of Council
1(a) The number of individual members of the Corp. elected to the Council by members of the Corp shall be NINE (9)
1(b) The number of persons appointed to the Council by the Lieutenant Governor in Council shall be FOUR (4)
Regulation 990
Exemption
1. Every member in good standing of the Risk Management Consultants of Ontario who provides only risk management consulting services and who does not engage in any other activity normally carried out by an insurance broker is exempt from the provisions of the Act and the regulations
Regulation 991
- Licensing
- Corporation & Sole Proprietorship
- Principal Broker Requirements
- Unlicensed Insurer
- Commission/Fees
- Code of Conduct
- Misconduct
- Trust Fund
- E&O
- Financial Reports
- Fines
- Findings
- Address
Individual Licensing
An individual is qualified to be issued and hold a certificate of registration as an insurance broker where the
a) Individual:
I. Has attained the age of majority
II. Is of good character and shows that they will carry on business in accordance with law, integrity and honesty
III. Has not been convicted of an offence that would render him/her unfit to act as a broker
IV. Has not been refused, suspended, or had a license revoked under the Insurance Act
V. Satisfies the educational and experience requirements of the Qualifications and Registration Committee
VI. Has complied with provisions of the regulations
b) The only business of employment is that of
I. An insurance broker
II. An insurance broker and life agent
III. Such other business as the QUALIFICATION & REGISTRATION Committee sees appropriate
c) The individual carries on the business on the business of an insurance broker as a sole proprietor, partnership or corporation
d) The individual complies with the continuing education requirements established by the council
5(2) Grandfather clause applicable to the ‘other employment’ condition if registered prior to October 1, 1981
5(3) Sections iii and iv do not apply to disqualify an individual who the QUALIFICATION & REGISTRATION committee is satisfied will carry on business in accordance with law, integrity and honesty
Corporation Licensing
6(1) A corporation is qualified to be issued and hold a certificate where:
a) The only business is that of an Insurance broker, life agent or other business as approved by the QUALIFICATION & REGISTRATION committee
b) The corporation acts under the direction and supervision of a principal broker
c) Has complied with the provisions of this regulation
Licensed Before October, 1981
• If an individual had a broker license prior to this act being effective (October 1, 1981), you will see that they are exempt
• “Became registered under section 36 of the Act”
Licensed Before Oct 1981
- If an individual had a broker license prior to this act being effective (October 1, 1981), you will see that they are exempt
- “Became registered under section 36 of the Act”
Partnership Licensing
A partnership is qualified to be issued and hold a certificate where:
a) The only business is that of an Insurance broker, life agent or other business as approved by the QUALIFICATION & REGISTRATION Committee
b) The partnership acts under the direction and supervision of a principal broker
c) The majority equity interest and majority voting interest are held by persons who are RIB or registered to act as intermediaries for insurance, other than life
d) Has complied with the provisions of this regulation
7. 1(1) A sole proprietorship is qualified to be issued and hold a certificate where:
a) The only business is that of an Insurance broker, life agent or other business as approved by the QUALIFICATION & REGISTRATION Committee
b) The sole proprietorship acts under the direction and supervision of a principal broker
c) The sole proprietorship has complied with the provisions of this regulation
Principal Broker Requirements
- 2(1) A Sole Proprietorship, partnership or corporation must designate an individual to be the principal broker of the business
- 2(2) A member qualifies if the member:
a) Is not in default of any fees under the Act or By-Law
b) Not the subject of a complaint referred to the Discipline Committee or disciplinary hearing
c) Not the subject of an outstanding order of the Discipline Committee
d) Does not hold a restricted or acting under supervision membership
e) Is a sole proprietor, employee of a sole proprietorship, a partner of director of the corporation
f) Directs and supervises the sole proprietorship, partnership or corporation in acting as an insurance broker and has the authority to act in its name and on its behalf regarding applications or reports required under this Act or b-laws of the Corporation - 3 A member shall NOT be designated as a principal broker until the member has notified the Corporation in writing that he/she meets the criteria
- 4 To remain Principal Broker you must satisfy the educational requirements
- 5 Principal broker may appoint one or more deputies to perform duties delegated to them
- 6 This section applies to a deputy principal broker in the same way it applies to a principal broker
QUALIFICATION & REGISTRATION committee will not issue a certificate of registration as an insurance broker where it feels?
a) The applicant or
b) The person occupying office space in the same business premises as the application
Confirmation of Coverage
must be given to a member of the public either by a policy or certificate of coverage within 21 days of placing insurance and a copy must be sent to the insurers as well
9(2) The certificate must contain
a) The name and mailing address of the insured
b) A description of coverage provided
c) Full name of each insurer
d) The amount of insurance placed
10(1) A member shall not act or assist in placing insurance with an unlicensed insurer unless:
a) The member has informed the member of the public that:
a. The insurer is not subject to regulation under the Insurance Act
b. Orderly payment of claims may be more difficult than with an insurer licensed under the Act
c. The Superintendent has no authority under the Insurance Act in respect of the insurer
d. Provincial and Federal taxes payable
b) The member has obtained the written consent of the member of the public
c) Sufficient insurance cannot be obtained at reasonable rates or on the form of contract required by the member of the public from insurers licensed under the Insurance Act
10(2) A member shall not place auto insurance with an unlicensed insurer except in excess of the minimum liability coverage required by the Insurance Act
10(2) A member who places insurance with an unlicensed insurer shall, within 30 days after the last day of March, June, September and December of each year:
a) File with the Superintendent a return under oath or affirmation in the form and manner required by the Superintendent, containing particulars of all insurance effected under this section
b) At the same time, in respect of all premiums on such insurance, pay to the Minister of Finance the premium taxes that would be payable if such premiums had been received by a licensed insurer
Service Fee/Interest
12(1) Any member (broker) who charges a fee for a service in addition to retaining a portion of the premium (commission) must disclose the fee and the total remuneration on the transaction before placing insurance
12(2) Interest charges on overdue accounts and installments are not considered fees
General Code of Conduct
14(1) Always discharge duties with integrity
14(2) Must be competent with the duties you perform
14(3) Act in a conscientious, diligent and efficient manner and provide a quality of service equal to what you would expect of other members
14(4) Be candid and honest
14(5) Always maintain strict confidentiality with all information acquired in the course of your professional relationships
14(6) Observe all rules and laws with respect to privacy and ensure the same amount of care that a prudent person would take
14(7) Any other business pursuits should not jeopardize a member’s integrity, independence or competence
14(7)(1) Must disclose to a client or potential client, in writing, of any conflict or potential conflict of interest associated with a transaction or recommendation
14(8) Must disclose all fees to the client prior to any services being rendered
14(9) Encourage public respect for and try to improve the practice of the member’s vocation
14(10) Make your services available to the public in an efficient and convenient manner which will command and respect and confidence and is compatible with integrity, independence and effectiveness
14(11) Assist in maintain the integrity of the member’s vocation and should practice in its activities
14(12) A member shall assist in preventing the unauthorized practice of the member’s vocation
14(13) A member’s conduct towards other members, members of the public, insurers and the Corporation shall be characterized by courtesy and good faith
14(14) A member shall cooperate in an investigation conducted by the corporation
14(15) A member shall notify the corporation if the governing authority of the profession in a jurisdiction other than Ontario has made a finding of incompetence or misconduct (or similar finding) against a member
Misconduct
15(1) Use of methods of solicitation and advertising that are not compatible with honour and dignity, including misrepresentations or omissions that misrepresent the terms, benefits or advantages of any policy or contract of insurance and the making of any false or misleading statements
15(2) Use of any incomplete comparison or any policy or contract of insurance for the purpose of inducing or intending to induct any insured to lapse, forfeit or surrender a policy or contract
15(3) Use of any payment, allowance or gift or any offer to pay, allow or give, directly or indirectly any money or thing of value as an inducement to any prospective insured to insure
15(4) Manipulating a premium or paying, allowing or giving or offering or agreeing to pay, allow or give a rebate of the premium, expect for a payment in the nature of a dividend, bonus, profit or savings that is provided for in the policy
15(5) Coercing or proposing, directly or indirectly, to coerce a prospective buyer of insurance through the influence of a professional or business relationship
15(6) Holding oneself out or advertising by various means or carrying on business in any other manner than the name in which the individual, corporation or partnership is registered
15(7) The use of any practice or conduct that results in unreasonable delay or resistance to the fair adjustment of claims
15(8) Failure to carry on business in a manner consistent with the code of conduct
15(9) Failure to comply with the provisions of the Act and this regulation
15(10) Acting as an insurance agent without being properly licensed
15(11) Being convicted, after the 1st day of October 1981, of a criminal offence or offence under the Insurance Act, whether or not the offence was committed before the 1st of October 1981
15(12) The payment or acceptance of a referral fee or finder’s fee to or from a person who is not:
i. Licensed as an insurance agent or broker
ii. Licensed to sell mutual funds
iii. Licensed as a real estate agent
iv. Licensed as a mortgage broker
v. Engaged in the business of a financial planner
vi. Engage in the business of providing financing for the payment of insurance premiums
vii. Engaged in the business of providing products or services that reduce insurance risk
15(13) A registered insurance broker who is a director, officer or principal broker has knowingly concurred in misconduct
15(14) Providing false or misleading information to the Corporation
15(15) Acting as a principal broker when the member has failed to comply with the educational requirements
15(16) Failure of a principal broker to properly supervise brokers whose registration is restricted to acting under his or her direction and supervision
None of the above will prohibit a member from being licensed and acting as a life insurance agent
Trust Fund
16(1) Must be maintained in a trust account at an ON branch of:
a) A bank listed in Schedule I or II to the bank act (Canada)
b) A trust corporation
c) A loan corporation
d) A credit union authorized by law to receive money on deposit
Each account shall be kept in the name of the member and designated as a trust account
16(2) If licensed or registered in 4 or more provinces and you have offices there you can apply to have the trust accounts in one of those provinces
16(3) If licensed or registered in 2 or more provinces you can apply to have the trust accounts in one of those 2 provinces
16(4) All trust money:
1) Must be deposited into a trust account or investment as soon as practicable after receipt
2) Must be done within 3 banking days of receipt
3) Can be subsequently invested and held in trust in an investment described in subsection 5
4) Shall not be disbursed or withdrawn except in accordance with the terms and conditions under which the money was received
5) May be withdrawn and deposited in to the members general account if the member is entitled to the money
16(5) Acceptable means of investment and trust:
1) Deposits, GIC’s and other forms of indebtedness issued by banks, trust and loan corporations, credit unions or the government or a province of Canada, for not more that 5 years and permit the repayment on demand of the principal sum
2) Treasury bills issued for 30 days or less
3) Mutual or pooled funds that invest only in short-term money market instruments
4) Bankers acceptances
5) Short-term debt securities issued by non-financial corporations for a term of one year or less and have the highest or superior credit rating from the Dominion Bond Rating Service
16(6) A member shall ensure that the member is at all times able to meet all of the member’s trust obligations
16(7) When requested in writing, the member has 30 days to account for all trust funds received by the member
16(8) No member who is not a sole proprietor, partnership or corporation shall control trust funds or maintain a trust account in the member’s own name
16(9) All cheques drawn on a trust account shall have the words trust account and the name or the member imprinted on the cheque
