Materials for Financial Advisors
The following materials were produced for financial advisors holding a life and/or health insurance license in Canada.
A Guide to Preparing the Written Explanation
Required for the Life Insurance Replacement Declaration
MGA COMPLIANCE: A RISK-BASED APPROACH FOR COMPLIANCE PROGRAMS IN THE MGA CHANNEL
MGA Compliance: A Risk-based Approach for Compliance Programs in the MGA Channel
ADVISOR SCREENING CONFIRMATION REQUEST
Advisor Screening Confirmation Request [PDF]
Advisor Screening Confirmation Request [Word]
ADVISOR SCREENING QUESTIONNAIRE
For use by Managing General Agencies Screening Advisors for Suitability [PDF]
For use by Managing General Agencies Screening Advisors for Suitability [Word]
STANDARDIZED MGA COMPLIANCE REVIEW SURVEY
The CLHIA Standardized MGA Compliance Review Survey provides a means for insurers to assess the controls that exist within the entities to which they have delegated screening and other compliance tasks. It is a Reference Document related to Guideline G8.
CLHIA Standardized MGA Compliance Review Survey [PDF]
CLHIA Standardized MGA Compliance Review Survey [Word]
Canada – U.S. Enhanced Tax Information Exchange Agreement & U.S. FATCA - Simplified Entity Certification Form & Guidance
Needs-Based Sales Practices
The document describes industry practices intended to clarify the relation of the features of an Individual Variable Insurance Contract (IVIC) to the needs of a client.
Point of Sale Disclosure
Implementation of New Requirements for Segregated Funds
This document briefly summarizes key changes in distribution practices for segregated funds resulting from implementation of new point of sale disclosure requirements.
AML/ATF Guidance Manual
The attached Guidance Manual to Combat Money Laundering and Terrorist Activity Financing is designed to assist life insurance agents and brokers in complying with legal obligations applicable to them. It has been updated to include the changes that came into effect on June 23, 2008, as a result of the Bill C-25 amendments and revised regulations. Advisors using the Guidance Manual to comply with the requirement to have written policies and procedures should update their files accordingly. This updated version replaces the earlier one.
Section 3 provides details concerning specific legal obligations, Sections 5.2 and 5.3 provide indicators or "red flags" of suspicious transactions or attempted transactions, descriptive scenarios of suspicions can be found in Appendix A and Section 8 deals with making reports to FINTRAC.
CRTC Unsolicited Telecommunications Rules
Life and Health Insurance Industry Practices
This document is adapted from a Reference Document on the CRTC Unsolicited Telecommunications Rules Rules) that was prepared for life and health insurance companies by the Canadian Life and Health Insurance Association.
The primary intent of this document is to provide Advisors with general advice to assist them in determining which, if any, of the Rules apply to them. It is not intended to provide legal advice.
Important Notice to All Insurance Agencies: Corporate Errors and Omissions Insurance
Many insurance agencies and MGAs may not be aware of the full extent of risk they face if they do not purchase separate E&O cover under a Corporate E&O plan (also known as entity E&O).
You should know...
- Vicarious liability provisions in individual E&O do not fully protect an agency
- The cost of Corporate E&O insurance has been coming down
- The risks and costs associated with litigation have been increasing
- Many regulators are revisiting requirements in this area with a view to more stringent interpretation
You should discuss your agency’s E&O coverage with your Association or your own insurance broker to ensure you understand all the risks and have the appropriate coverage in place.
The Approach (Needs-Based Sales Practices)
In 2006, Canadian regulators introduced three principles that are intended to manage conflicts of interest that might arise in the sale of insurance. At the urging of Advocis, CAILBA, CLHIA and IFB, the regulators agreed that the industry should take the lead in outlining industry practices that address these principles.
Together, the three principles and the industry practices that address them combine to help ensure that Canadian life and health insurance customers are well served by sound and effective sales practices.
Attached is a description of industry practices that address the principle that advice be appropriate to the needs of the client. Called The Approach, it was developed jointly by the associations in consultation with their members.
Insurance regulators will be looking for evidence that actual sales practices match the description in The Approach. If they are not satisfied that these practices are in wide use, they may introduce additional regulation to enforce the principles.
This updated version includes references to assessing the client's risk tolerance. This revision addresses concerns that some regulators have raised about the use of leveraged sales strategies.
January 2015, (originally published October 2007)
ADVISOR DISCLOSURE (Group Benefits and Group Retirement)
When a plan sponsor is considering the purchase of a group life and health insurance or group retirement plan, it is important that they have good information about the product, how it meets their needs, the company offering the product, and the advisor and the advisor’s business relationships. This chart focuses on disclosure about the advisor which should be given in writing to the plan sponsor prior to the sales transaction.
In March 2005, in response to concerns of insurance regulators regarding managing conflicts of interest, the industry introduced a uniform disclosure protocol for advisors. Over the next months, the regulators will be assessing compliance with this protocol. Evidence of compliance will be used to determine if additional regulation is required.
Advisors should be keeping written documentation of disclosure in their client files. Provincial insurance regulators and companies, as part of their routine compliance audits, may ask to see this documentation.
Information about advisor disclosure is also available from life insurance companies or the websites of Advocis, CAILBA and IFB.