Rule 5 | Council fees

Rule 5 defines the processes and activities for which the Insurance Council collects fees and the maximum threshold for those fees.

Why the Insurance Council charges fees

The Insurance Council is granted the ability to set and collect fees by Section 225.1 (2)(j) of the Financial Institutions Act (FIA). Council Rule 5 governs the fees the Insurance Council is permitted to collect and the maximum threshold or how much can be charged. Actual fees are established through Council motion. Insurance Council activities are wholly funded through the fees it collects from industry and regularly evaluates the fee structure to ensure they support sustainable funding to effectively regulate insurance representatives in BC, with the goal of ensuring public protection.

What is the proposed change?

Amendments to Rule 5(1)(a)(iv) would introduce a maximum application fee of $1000 for the Restricted Insurance Agency licence program.

Proposed Rule 5(1)(b)(iv-ix) would introduce a fee model to support the Restricted Insurance Agency licence program. The RIA program and oversight activities will be fully funded by fees collected from industry.

Proposed Rule 5(1)(h)(iv) would introduce an RIA annual renewal late fee.

Proposed Rule 5(2) would add language to clarify that in Rule 5(1) the term insurance agency does not include RIA licensees because their fee structures are different.

The Insurance Council has proposed a fee to support the organization’s accreditation program. This fee, first introduced during a previous consultation, is currently under review. Final fee amounts for accreditation will be determined by Council based on program complexity and published once approved.

Rule 5(1)(a)(iv): What are the impacts?

Under Rule 5(a)(iv), those wishing to conduct incidental sales of insurance products along with their ordinary business will need to apply for a licence.

This amendment establishes the upper limit of what can be charged for an RIA licence application; a maximum fee of $1000 is being proposed. This amount aligns with the fees for other corporate licences.

If a business requires multiple licence classes for restricted insurance, as defined in proposed Rule 1(f), they only need to submit a single application if applying at the same time.

If applying for another licence after the initial application, an additional application will be required.

Rationale

The proposed application fee amount for an RIA licence is aligned with other corporate licence types, as is the level of effort to administer the licence.

see the proposed word ruling

Rule 5(1)(b)(iv-ix): What are the impacts?

As part of an agency’s requirements to hold an RIA licence, the agency must pay an annual RIA licence renewal fee. All applicants will need to pay an RIA licence fee to continue incidental sales of insurance.

Rationale

The proposed fees reflect the cost to fund licensing activities, administer the program and support effective regulatory oversight.

The proposed tiered fee structure accounts for variations in the number of representatives each agency may have offering insurance products. This tiered fee structure model is intended to harmonize with other jurisdictions with restricted licensing regimes.

The Insurance Council will be required to oversee insurance activities and provide practice support to RIA representatives, even though they are not individually licensed. To be a viable and financially sustainable program, these regulatory activities will require appropriate resourcing.

see the proposed word ruling

Rule 5(1)(h)(iv): What are the impacts?

If an RIA annual licence fee is late, the applicant will be charged a late fee no more than the proposed maximum.

Rationale

The proposed maximum late fee is $500, which is the same amount for all other agencies or firms.

see the proposed word ruling

Rule 5(2): What are the impacts?

In the context of the Fee Rules, Rule 5(2) will add language to clarify that the term insurance agency does not include RIA licensees because their licence fee structure is different.

Rationale

Everywhere else in the Council Rules the term “insurance agency” does apply to RIA licensees.

see the proposed word ruling