Licensees have a number of responsibilities that they must be aware of and integrate
into their daily business requirements. Failure to do so could result in the licensee being in breach of the legislation which could result in disciplinary action.
This section provides an outline of those responsibilities, however, it is important that in addition to reviewing this section, licensees download
and review Council Rules and Code of Conduct (see menu on the left). If you cannot access these sections for any reason or if you have questions after reading the Rules and Code, then contact our office.
1. Other Business Activities
Licensees who have business activities, other than those authorized under their licences, must keep themselves up-to-date on Councilís decisions and its Conflict of Interest Guidelines and modify their insurance activities accordingly or notify Council on the appropriate form, as required. You will find more detailed information on your responsibilities and Councilís decisions in the area of business activities on the Code of Conduct section of this website.
2. Mandatory Reporting to Council
Discipline, Judgements and Criminal Charges or Convictions: A licensee must notify Council within 5 business days where the licensee, or any business the licensee owns or has participated in as a director, officer or partner:
Loss of Authorization to Represent an Agency or Firm: A licensee must notify Council within 5 business days where a licensee is no longer authorized to represent an insurance agency, adjusting firm or general insurance direct writer. This condition applies to both the individual licensee whose authorization has been withdrawn, AND the insurance agency, adjusting firm or nominee of the general insurance direct writer involved. In addition, if the reason for withdrawing the authorization relates to the individualís suitability or conduct as a licensee, Council must be provided with the reasons for the withdrawal.
Change of Name: A licensee must notify Council within 5 business days where there is any change to the name, including trade names. More information on name changes may be found under the specific licence class in LICENCE QUALIFICATIONS.
Address Changes: It is a condition of all insurance licences that the licensee notify Council of changes to their address and other contact information within 30 days. To make a change to contact information, send a letter or fax requesting the change and provide the file number, along with the new information, including postal code, telephone and fax number. There is often confusion as to what each address is used for, in particular the service address. The following provides information on addresses maintained by Council and how they are used.
IMPORTANT NOTE: If you hold more than one licence and you are changing your business address, confirm which licence the address change applies to.
3. Confidentiality of Customer Information
Maintaining the confidentiality of customer information is a condition of all licences issued by Council. A licensee must hold in strict confidence all information acquired in the course of the professional relationship concerning the personal and business affairs of a client, and must not divulge or use any such information other than for the purpose of that transaction or of a similar subsequent transaction between the licensee and the same client unless expressly authorized by the client or as required by law to do so.
4. Holding Out as an Insurance Licensee
Licensees are required to hold themselves out to the public in the manner in which they are licensed. This assists in assuring that the public
knows with whom they are dealing. This means that letterhead, business cards, signage and advertising must properly reflect the name(s) shown on the licenseeís licence, or
the agency or firm the individual is authorized to represent. Agents and salespeople who primarily deal with a single product or product line should be careful when determining
how to use the product name in their marketing strategies. Do not use the name in a manner that may mislead a member of the public (such as answering telephones with a product name)
into believing it is a trade name. See also: FINANCIAL PLANNING NOTICE and Disclose You Are An Agent below.
5. Referral Fees
The rules on finder or referral fees (referral fee) differ depending on whether or not the person receiving the compensation is an appropriately licensed insurance agent and what insurance activities the third party has conducted.
Appropriately Licensed Third Party: It is common for insurance agents to work together in the marketing of insurance products to a client. More than one appropriately licensed insurance agent may share commissions earned as a result of a joint venture, therefore, the sharing of commissions between appropriately licensed agents is allowable.
Unlicensed Third Party: Referral fees may be paid to an unlicensed person. However, both the person paying the referral fee and the person being paid must meet certain requirements. When making a referral, an unlicensed person can direct a client to a licensed agent or, at the direction of the client, provide the clients name to a licensed agent. Before paying a referral fee, certain conditions must be met:
Note: If the person being paid the referral fee is licensed with Council, but not in the category of insurance that relates to the referral fee, then that person should be considered unlicensed for the purposes of the referral fee. As an example, where a general insurance agent refers a client to a life insurance agent, the general insurance agent is considered to be an unlicensed person.
6. Sale of Product or Service on its Own Merits
It is Councils position that the usual practice of the business of insurance requires licensees to sell insurance products and services on their own merits. This means among other things, that licensees:
7. Proper Books and Records
All licensees are required to maintain proper records and accounting books relating to their insurance activities as a condition of licensing. Where funds belonging to or received from a client are received, the licensee is required to keep proper accounting records. Such accounting records are expected to be maintained in accordance with Generally Accepted Accounting Principles. Licensees who do not have the required skill to maintain proper accounting records should seek professional expertise. Licensees are also expected to meet any requirements outlined in their contracts with insurers.
Licensees should maintain their records in sufficient detail to ensure customer protection. Council recommends that records be kept by licensees to show that certain licence conditions and the licensees duty to the client have been met. Although the exact nature of the documents to maintain will differ depending on the type of business being conducted, licensees should give consideration to the following:
How long books and records should be kept will vary depending on the nature
and complexity of the transaction. As an example, the duty to maintain
records on a six month ICBC policy for a transient client would
be lower than that of long term clients for a property and casualty or whole
life insurance contract. Licensees are cautioned
that they may be subject to requirements under various legislation including
the Insurance Act, tax legislation and the Companies Act and may wish to obtain professional
legal or accounting advise before finalizing their retention policies.
8. Disclosure Requirement Prior to the Sale of an Insurance Product
The Marketing of Financial Products Regulation requires that prior to the sale of an insurance product disclosure be provided to the customer that outlines the following information:
Such disclosure is required on every initial transaction with a client and every subsequent transaction where there is a change in the information contained in the original disclosure. As an example, if a product is being placed with a new insurer, another disclosure is required.
9. Requirement to Disclose You are an Insurance Agent
Prior to conducting insurance activities, every agent is required to disclose to a member of the public that he or she is an insurance agent. This includes prior to soliciting any insurance business and therefore should be kept in mind when advertising. It is recommended that all insurance agents include on their letterhead and business cards a reference that clearly identifies them as an insurance agent to assist in meeting this licence condition. Agents are cautioned, however, that this should not be interpreted as the only action required. Council recommends insurance agents periodically review their procedures and practices in relation to how they conduct business to ensure prudent steps to meet the spirit of this condition are in place. Procedures should also address verbal communications with the public. As the public is not always familiar with insurance designations (e.g. CLU or CAIB), this will not convey that you are an agent. Usually any one thing will not result in an agent meeting this licence condition in all circumstances. Each form of communication should be reviewed to ensure the spirit of this licence condition is being met.
10. More Based on Your Class of Licence
Click on the class of licence you hold below for more on your responsibilities: