Study 1: Insurance and the Intermediary - Application Question

Question 1

Teresa Lee has completed a course of study to become an insurance intermediary and is interviewing for
positions at several insurance brokerages and agencies in Ontario; however, she is thinking of moving to
Saskatchewan sometime in the future. What information should she be prepared to talk about with
respect to the following?
a. What should she know about insurance intermediary licensing? (5 marks)
b. What ethical standards are required by all Canadian insurance intermediary codes of conduct? (5
marks)
c. What steps does she need to take to maintain and renew her license? (5 marks)

Answer 1

Answers:
a. Qualifications and licensing for insurance intermediaries (any five of the following; marks allowed for
other valid responses):
• Must pass an examination on knowledge of the insurance business and government regulations
for insurance intermediaries
• Must have a license to operate as an insurance intermediary
• In some provinces, licensing is regulated by the government; in others, agents are regulated by
the government while brokers are self-regulated, overseen by a regulatory organization of brokers
• Most provinces require a course of study before applying for licensing
• Agencies and brokerages are sponsored by insurers and individuals must be affiliated with a
brokerage or agency to write the licensing exam and apply for a license
• Penalties for operating as an agent or broker without a licence can be severe and apply to the
individual, the agency or brokerage, and the insurance company

b. Ethical standards required by all Canadian insurance intermediary codes of conduct (any five of the
following; marks allowed for other valid responses):
• To act in a competent, trustworthy fashion
• Avoiding fraud, deceit, or misrepresentation
• Not to be swayed by remunerative gain
• Not to take advantage of clients’ lack of knowledge or inexperience
• To hold information in strict confidence
• To purchase errors and omissions insurance

c. License maintenance and renewal (marks allowed for other valid responses):
• Renews every year or two, depending on jurisdiction
• Requires submission of basic details about operation
• Mandatory continuing education required in some jurisdictions
• If an intermediary is licensed in more than one jurisdiction, education requirements may be
waived if there is proof of a valid license in their home location
• Saskatchewan requires all intermediaries to take an ethics course every five years in addition to
continuing education hours