Life Insurance Company e-Newsletter #2

​December 31, 2015

Licensing Link Portal Upgrades


FSCO continues to upgrade the Licensing Link Portal for insurance agents.

Identification of Primary Insurer

Commencing in the spring 2016, the renewal application will require non-sponsored life insurance agents to indicate the insurance company with whom they conduct or expect to conduct most of their business. This information will be used by FSCO for notification purposes, such as when an agent fails to maintain Errors and Omission (E&O) insurance, has not completed the requirements for continuing education (CE), or has suitability issues on their renewal application. FSCO will contact not only the agent, but also the primary insurer in order to resolve outstanding items as quickly as possible to avoid disciplinary action.

Upon request, FSCO will be able to provide insurers with the names of agents that have listed the insurer as their primary insurer.

Renewal Notification Enhancements

Currently, all insurance agent renewal notices are sent by mail 60 days prior to the expiry of the licence. Coming in 2016, FSCO’s Licensing Link will be upgraded to provide renewal notices by email 60 days before the licence expires. Consideration is also being given to sending a follow-up email seven days before the licence expires if no action has been taken to renew the licence. If the agent is sponsored, the notices will be copied to the insurer.

Emailing instead of mailing the renewal notices will save on postage and processing costs. The email notices will also include messaging about maintaining E&O insurance coverage, notifying FSCO of changes to contact information and E&O insurance information, and completing the CE credits prior to renewing a licence.

Sponsored Insurance Agents

FSCO wants to remind insurers that new life insurance agents are required to be sponsored for their first two years of being licensed. Accident and sickness only agents must be sponsored at all times.

Sponsoring insurers have an obligation under section 12(1) of Ontario Regulation 347/04 (“Agents”), to establish and maintain a system that is reasonably designed to ensure that each agent complies with the Insurance Act, the regulations and the requirements of the agent’s licence.

Insurer Oversight of E&O and CE Requirements for Sponsored Life Agents

Insurers have a responsibility to monitor that life agents authorized to act on their behalf comply with the law, including ensuring that E&O insurance is maintained, continuing education credits are completed, and conflicts or potential conflicts of interest disclosures are made by agents in writing to clients or prospective clients.

FSCO’s recent on-site examinations of life insurance agents indicated that in about 10 per cent of the client files reviewed, conflicts of interest or potential conflicts of interest were not disclosed in writing to the client as required under the law (Ontario Regulation 347/04, section 16).

When a Sponsored Agent Leaves the Industry

If a sponsored life or accident and sickness only insurance agent exits the insurance industry, the sponsoring insurer must notify FSCO that the agent is ceasing to carry on business as an insurance agent, and advise the agent to submit a Request for Surrender of Licence form to FSCO. Responsibility for submitting the request lies with the agent.

If a sponsored life or accident and sickness only insurance agent is terminated for cause, the insurer must notify FSCO of the reason for termination by completing the Life Agent Reporting Form. Termination of employment or a contract does not automatically terminate a licence; however, agents who require a sponsor are not permitted to conduct insurance business until a new sponsoring insurer has added the agent to their roster on Licensing Link.

In the event of a termination for cause, FSCO may determine that an investigation is warranted and contact the insurer for further details. In all instances, insurers must have an agent in place to continue to provide service to the agent’s clients.

Commission Payments

Insurers are reminded that it’s their responsibility to verify an agent’s licence status before making commission payments. Insurers can verify an agent’s licence status on the Licensed Representatives Listing.

Life Licence Qualification Program (LLQP)

Insurers are reminded about the upcoming change to the LLQP program commencing on January 1, 2016. Additional details about the new program can be found on FSCO’s website.