The nominee is responsible for all insurance activities of the agency or firm as per Council Rule 7(6). This includes making sure all insurance activities of the agency or firm are appropriately supervised; there are sufficient procedures to facilitate compliance with Insurance Council's requirements; and the public’s interest is properly served. This includes ensuring:
- Agency staff are appropriately licensed, as required.
- Corporate errors and omissions insurance is maintained.
- Notifications are provided to Council within five business days when a licensee ceases to represent an agency, the agency is disciplined by another regulator or other notifications, as required.
- Level 1 general insurance salespersons abide by their licence restrictions.
- Appropriate supervision is in place regardless of whether oversight is provided on the agency's premises and/or off-site.
- Adequate steps are taken to ensure clients are immediately notified about a lack of insurance coverage.
A licensed level 3 general insurance agent must actively supervise all the insurance activities of every general insurance salesperson and agent authorized to represent the agency.
As each agency differs in size, nature of the business conducted, and experience of licensees, nominees must determine an appropriate supervision approach. The Insurance Council holds nominees accountable for their decisions and may require them to clearly demonstrate the appropriateness of the supervision provided.
More information on how to determine appropriate supervision can be found in the Guidelines for Supervision of General Insurance Level 1 Salespersons.
The Insurance Council acknowledges the demands and challenges nominees can face and that it may not always be possible to foresee or prevent non-compliant insurance activities. However, as nominees are ultimately responsible for the insurance activities of the agency or firm, if the Insurance Council becomes aware of activity that is contrary to the Financial Institutions Act, it will be up to the nominee to demonstrate that sufficient procedures and oversight were, and are, in place.
If appointing more than one nominee:
Every agency or firm is required to nominate one nominee. The nominee is responsible and accountable to the Insurance Council for all activities of the agency or firm. Where an agency or firm has more than one nominee, it is at the agency or firm’s discretion how the responsibilities are assigned and carried out by the nominees. The agency or firm should be able to demonstrate which nominee is responsible for each area of the agency or firm.
If it is determined that a nominee’s actions or inactions are unsuitable, and/or in breach of Council Rules, Code of Conduct or the Financial Institutions Act, even if it involves an area of responsibility that the agency or firm did not assign to the nominee, a nominee may still be held responsible and subject to disciplinary action by the Insurance Council. Where the agency or firm is unable to demonstrate which nominee(s) is responsible for a particular area of the agency or firm, all nominees share joint responsibility to the Insurance Council.
Where the overall agency or firm’s activities are impacted, all nominees would be held jointly responsible and accountable to the Insurance Council. These include, but are not limited to: reporting requirements to the Insurance Council and ensuring the agency or firm maintains errors and omissions insurance.