What’s the issue?
In addition to its regular licensing process, the Insurance Council has for many years also issued limited licences (previously referred to as 'restricted licences')—a type of licence with conditions imposed on it to limit the scope of practice. This is done in occasional circumstances where individuals or companies applying for licensure do not meet the standard requirements for a full licence under the Insurance Council Rules, but their insurance activities are limited to the sale, or adjusting of one or more specific products.
A recent legal review of the process for granting product-specific limited licences determined that while the Insurance Council has the legislative authority to issue restricted licences under the Financial Institutions Act, the process is not set out in the Insurance Council’s Rules. This makes the act of granting these restricted licences ultra vires, i.e., beyond the scope of the powers currently defined in its rules. In order to avoid non-compliance with the Act, the Insurance Council has ceased issuing product-specific limited licences until the matter can be resolved.
What does this mean? Who is affected?
There will be an impact on new applicants for licences limited to the sale or adjusting of specific insurance products. No new applications are being accepted for product-specific restricted licences; all pending applications will be closed and application fees refunded.
There is no interruption to those who currently have a limited licence. These licence holders can continue to carry out the insurance activities for which they are licensed.
There is no disruption to the standard licensing process for insurance agents, agencies or adjusters (General Insurance, Life and/or Accident & Sickness, Adjusters).
There is no disruption to licensing for travel agents or wholesalers with a Restricted Travel Insurance Agent Licence who are also licenced with Consumer Protection BC.
What’s the impact on consumers?
We anticipate that this situation will have minimal impact on consumers, as insurance products continue to be available through current limited licence holders and licensed insurance agents and agencies.
Furthermore, the validity of insurance products sold by limited-licence holders is unchanged as they hold a valid insurance licence.