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ETHICS (2022 LLQP) > CH.4 - RULES AND PRINCIPLES GOVERNING THE ACTIVITIES OF LIFE INS AGENTS + A&S INS AGENTS > Flashcards

CH.4 - RULES AND PRINCIPLES GOVERNING THE ACTIVITIES OF LIFE INS AGENTS + A&S INS AGENTS Flashcards

(59 cards)

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1
Q

PROV+TERR regulatory authorit licenced by ies

A

Fed supervision under ins. companies act + OSFI : detemine financil soundness of fed inc life ins co’s

prov+terr: determine finan cial soundness + licensing ins agents + reguating licencing of insurers + market conduct

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2
Q

prov+terr ins regulators: Ontario

A

life ins agents , a&s agents + corp agencies licenced by FSRA (REPLACED FSCO) + also regulates insurers

GOVERNED BY Insurance Act

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3
Q

FSRA

A

FINANCIAL SERVICES REGUKATORY AUTHORITY

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4
Q

FSCO

A

FINANCIAL SERVICES COMMISION

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5
Q

CISRO

A
  • canadian insurane services regulatory organizations
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6
Q

CISRO , what do they do?

A
  • primary responsibility: admminister regulatory system, applicable to ins intermediaries, under their auth
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7
Q

Other authorities providing client protection (5)

A
  1. Office of the privacy comissioner of canada
  2. FINTRAC (Financial txs and reports analysis centre of canada)
  3. ASSURIS
  4. OLHI (Ombudservice for life and health insurance)
  5. CCIR (Cdn council of insurance reguators)
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8
Q

Office of the privacy commissioner Of canada

A
  • administers enforcement of PIPEDA + protects and promotes privacy rights of individuals
  • except– BC, AB, QC
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9
Q

FINTRAC

A
  • Financial Txs and Reports Analysis Centre of Canada
  • ## ensures life ins agents , etc, comply w canadas proceeds of crime (money laundering) and terrorist financing act
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10
Q

FINTRACT focus (4+1)

A
  1. Ascertain each clients identity and confirm existence of entities
  2. 3rd party determination
  3. determination of the purpose
  4. determination of politically exposed ppl + head of intl orgs
  5. obligation to report suspicious txs, terrorist property, large cash txs
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11
Q

Ascertaining each clients identity

A
  • under FINTRAC, 3 ways to verify identity
  1. GOV issued photo ID
  2. Credit on file method
  3. Dual process method

pg 106– skipped some, add later if need to

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12
Q

3rd party determination

A

applicant on behalf of 3rd party (POA or nominee)—> must keep 3rd party determination record specifying:

  • 3rd party -individual: name, add, DOB, biz/occ
  • 3rd party entity: name, add, nature of bizz, inc #, place of corp
  • relationship btwn 3rd aprty and client
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13
Q

determination of PEP (politically exp persons) and heads of intl org.s( HIO)

A

PEP, HIO, OR FAMILY MEMBER OF

If makes lump sum $100k or more, establish source of fuds

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14
Q

Determination of the purpose

A
  • client must indicate pupose of product purchasing + how will be used
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15
Q

obligation to report suspicious txs

A
  • all conducted or attempted sus txs –> report FINTRAC)
  • SUS TXS INDICATRS— pg 109
  • report terroist property: report to RCMP + CSIS
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16
Q

OBLIGATION TO REPORT LARGE CASH TXS

A
  • report: single dep of $10k or more or 2 or mroe $10,000 dep. w/in 24 hr

dep of $100k or mroe:
- check is PEP w/in 15 days

-

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17
Q

POLITICALLY EXPOSED PERSON (PEP)

A

FOREIGN PERSON who held gov or legal position in foreign country, incls their spouse or close family

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18
Q

Assuris

A

not for profit org protecting PH’s if ife ins company fails

all fed reg insurers must be part of assuris

assuris: see table pg 111

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19
Q

OLHI ( OmbudService FOR LIFE AND HEALTH INS)

A

A national independent complaint resoution org proiding clients w assistance to enquiries/ complaints

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20
Q

CCIR (Cdn council of insurance regulators) pg 111

A

facilitates and promotes efficient and effective insurance regulatory system in cda to serve public interest

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21
Q

Professional associations (5 CAICF)

A
  • CLHIA
  • advocis
  • IFB
  • CAILBA
  • FPSC

THEY PROMOTE PROFESSIONAL QUALIFICATIONS, continuos professional development, ethical behaviour

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22
Q

IAIS (International association of insurance supervisors )

A
  • represents insurance regulators
  • promotes effective and globally consistent supervision of ins industry
  • conteibutes to global financial stability
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23
Q

ICP 18 and 19 of IAIS

Insurance Core Principles

A

18: intermediaries: supervision of life ins agents
19: conduct of business: activities and behaviour of life ins agents

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24
Q

Acfing in good faith (3)

Study These Flashcards
A
  • duty of care
  • integrity
  • competence
25
Duty of care
Avoid careless acts or omissions
26
Integrity (6 HTFRDR)
Be: - honest - trustworthy - fair - reliable - dependable - respectful
27
Competence
Only conduct business for products/services licenced for (have competence)
28
Conflicts of interest
Agent motivated to take action for own interest - prioritize clients interest - Disclose conlfixts or potential conflicts - product stability
29
Produxt suitability (NPD)
Agent must: - perform needs analysis - recommemd produxts to meet needs - explain + document products recommended
30
Product suitability: beet practices (DCFNRP)
``` Disclosure Client expectations Fact finding Needs assessment Recommend/advise Product info ```
31
Conflict of interest occupations
Must not be engaged in any biz/occupation that would jeopardize applicants integrity/independence/competence - clergyman, police officer, liquor store employee Must bot be in position to use coercion/undue influence to control, direct, secure biz
32
Tied selling
Making purchase of 1 product required to purchase another
33
Churning
Encourage client to guve uo 1 produ t for another to earn commission (with same insurer)
34
Twisting
Convincing clinet to end 1 policy to replace with another (different insurer)
35
Premium rebating
Agent gives back portion of premium
36
Trafficking in insurance
Agent helps pilicyhilder sells their polocy (or abs. Assignment) to buyer
37
Inducing to insure
Cannot use gift or offer payment to convince client to purchase insurance
38
Fronting
Allowimg someone else to solicit business and submit to insurer under another agents name thAt sidnt meet client
39
Unnecessary delay in delivering policy
Must not hold/retain documents for delivery
40
Misrepresentation
Violation for any life insurance agent to make, issue, circulate any illustrations/sales material, or make any false statement
41
Missappropriating client funds/ commingling of funds
Taking money or other property received from client for specific purpose and fradulently misapplying to other purpose Cannot seposit client dund in to ur account
42
MIing a false document (forgery)
Agent making false document knowingly
43
Hilding out improperly
Pg 128
44
Misusing comoany privided illustrations
Pg 129
45
Defamation
Unethical for life ins agent to be maliciously critical/ derogatory about any colleague
46
Making proper disclosure (4)
Product disclosure Disclosure anput replacement Commission sharing Referral/ referral fees
47
Product disclosure
Agent should provide complete info about the producy and how if meets clients needs + biz relationship w insurer See pg 131 for key items
48
Disclosure about replacement
- how policies differ - why recommendation appropriate - risks of replacement - existing ins w possible cash values - negative tax consequences LIRD- life ins replacement declaration
49
Commission sharing
Payment or exchange of something of value based on % of commission Agent must disclose to cliwnr
50
Referral and referral fee
Fee paid for each lead/prospect whether a sale or jot Cannot be contigent on sale Cannot be % of commission UNLESS if being paid to another licenced Gent Must disclose to clients
51
Acting un compliamcd with eegulations and codes of conduct (3 - MDD)
- maintaining req liability ins (E&O) - documemt file - deliver contract
52
Majntaining S&O INS
Req by FSCO to have E&O coverage Provides indemnity against negligence, error, ommision + protection for any financial losses may have incured Doesnt protect against intentional acts, missapp., fraud, crime
53
Documenting file
To protect against complaints/ lawsuits, keep detailed notes + correspondence of of orihinal txs, recommendations, cliemt acceptance
54
Contract delivery
Do not deliver policy to client w/o verifying if any change in health or insuraniliyy When policy delivered (win 30 days) must check insured still in good health If any significant changes-- do not give the policy
55
Definition of complaint
Expression of dissatisfaction anout servixe peovided hy agent, may incl claim For financial loss
56
Complaint proceduce to follow
Maintain complaint log to track complaints | See pg 137-138 for more
57
Core ethical values
- acting in goos fair (core, competence, integrity - managing conflicts of interest properly - no unfair/deceptive practices - proper disclosure - complying w regilarion and codes of conducts Handling complaimts in fair and timely manner
58
Fullt licemced agents can sell:
- individual and group life ins - indibixual and group a&s - individual and group annuities
59
Reviking licence
Superintendant maybeevike livemce if - violated any provision if licence - made material misstatmwnt or ommission - guilty of fraud - showed incompetence or untrustworthiness

ETHICS (2022 LLQP) (7 decks)

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