Civil Code Is Quebec Flashcards
To whom or what do life insurance representatives have duties, obligation, and responsibilities towards?
Their clients, the general public, and the industry
Probably also the agency, and the profession, and the colleagues (other reps)
What are the conditions necessary to form an insurance contract?
For an insurance contract to be valid, for conditions are required
- cause
- Object
-Capacity
- Consent
What is cause in an insurance contract?
Cause is simply the reason for the contract. It justifies the contract and its existence. In the case of life insurance contracts, the premium is the cause of the contract for the insurer, while the death benefit is the cause for the policyholder.
What is the object in an insurance contract?
The object of the contract is the obligation to provide property or a service, or an amount of money to respect the agreement between the parties.
In the case of life insurance contracts, the benefit is the object of the contract for the insurer, while the premium is the object for the policy holder.
What is the capacity for an insurance contract?
Capacity refers to the legal capacity that both parties must have in order for the contract to be valid
Minors and incapable persons are full age are considered unable to exercise their civil rights, and therefore unable to enter into a contract
Minors need their tutor (mother, or father) to take out an insurance contract, unless they are fully emancipated through marriage or by court order.
Parents are also responsible for administering property received upon payment of an insurance benefit
What is consent as part of an insurance contract validity?
The consent of both parties is essential to forming a contract. Consent, maybe tacit, that is through an act that demonstrates acceptance of the contract.
Example
Jenny is offered a financial product and she responds by asking when she can meet with the person making the offer to purchase the product. The acceptance in this case is tacit, or implicit.
Consent may also be expressed verbally, or with a chequebook
Consent must be free and enlightened; it may not be the result of lesion, fear, fraud, or error on the part of either party
Defects of consent
- harm (Exploitation of one party by another, or prejudice)
- Fear (threats, or blackmail)
- Fraud (misrepresentation by one of the parties, to influence the other parties decision to enter into the contract)
- Error (For example, the wrong type of contract, or error in calculations)
What are the 4 defects of consent and what does that mean?
Consent must be free and enlightened; therefore, it must not be the result of lesion, fear, fraud, or error on the part of either party
Defects of consent
- harm (Exploitation of one party by another, or prejudice)
- Fear (threats, or blackmail)
- Fraud (misrepresentation by one of the parties, to influence the other parties decision to enter into the contract)
- Error (For example, the wrong type of contract, or error in calculations
What are the duties and obligation of financial advisors to the profession?
A financial advisor who is under inquiry, must refrain from contacting the person who requested the inquiry
A financial advisor who observes a colleague engaging in inappropriate conduct, must notify the appropriate regulatory organization
A financial advisor may not receive payment from individuals, other than those who have asked to do business with him or her
A financial advisor may not pay a prospective client to do business with him or her
A financial advisor may not receive any compensation from a person who does not hold a license, but who acts as if he, or she had one
A financial advisor may not pay a person as a representative if the person does not hold a representative license
A financial advisor must act honestly at all times. No premium discounts for clients are acceptable, nor is any agreement to change the premium payment method stipulated in a contract.
What are the financial advisors duty and obligations to other financial advisors, independent partnerships, firms, financial institutions, and insurers?
- A financial advisor must remit the amount collected for an insurer along with whatever information the insurer requires

What are a financial advisors duties and responsibilities to the client?
- A financial advisor must respect a clients decision to seek a second opinion on his or her financial situation
- The advisor must also give back to a client any documents borrowed to work on the clients case, even if the prospect owes the advisor money
- a financial advisor must respect the confidentiality of all documents and information received from clients. The use of these documents and information must not benefit the financial advisor to the detriment of clients.
- A financial advisor must demonstrate diligence and availability
- The financial advisor may not conduct any transactions with clients who are unable to manage their affairs on their own
- A financial advisor may not conduct transactions for a client if he or she acts as curator or dative tutor for a client
- Financial advisor may not accept any assistance from a third-party, which may be detrimental to a client
- A financial advisor may not make personal use of securities that belong to clients
- A financial advisor must have full knowledge of the facts before offering specific ad advice to clients. He or she must provide clients with accurate advice. If information is missing, the advisor must seek it out and refrain from offering any advice that may be mistaken or inaccurate.
- A financial advisor must refrain from making misrepresentations to clients. She must demonstrate the pros and cons of the products and services offered to clients.
- A financial advisor must respect his or her limits and knowledge when dealing with clients
What are the financial advisors duties and responsibilities to the public?
- A financial advisor must avoid pressuring clients to sign contracts or accept suggested strategies
- The advisor must demonstrate moderation, objectivity, discretion, and dignity
- A financial advisor must seek to educate and inform the public and promote the quality of services offered
A financial advisor will be considered liable if the following three elements are found together… what are the three elements?
- Fault
- Damage or harm
- A relationship between the two
What are the three types of fault?
- Non-intentional
- Intentional
- Gross
Civil liability can occur with any of the three. The damage sustained must be repaired.
What is damage or harm when it comes to liability of financial advisors?
Harm or damage may be bodily (physical injury suffered by the victim), material (involving the victims property ), or moral (inconvenience suffered). The burden of proof lies with the victim.
Financial advisor is considered liable if fault damage or harm, and a relationship between the two are found. What does the latter mean?
Causal link must appear between the fault and the damage
Example
A financial advisor has a client add a critical illness coverage writer to a contract that already provides life insurance coverage. The client receives an invoice for administrative fees on a new contract. The ad advisor forgot to mention to the insurer that the critical illness coverage was to be added to the existing contract, not to a new contract. In this case there is harm to the client due to a fault by the advisor.
What is civil liability?
Civil liability refers to the obligation to repair any injury caused to another person. The purpose of a civil liability suit is to receive financial compensation for harm suffered.
What is criminal liability?
Financial advisors will be criminally liable if they are found guilty of embezzlement, fraud, or theft, by a court under the criminal code. The case is prosecuted by the crown prosecutor.
Who is the crown prosecutor?
It is the prosecutor who prosecutes a criminal liability case under the criminal code, for example, if the financial advisors are found guilty of embezzlement, fraud, or theft
What is professional liability?
Financial advisors, who work for a firm without being employees of a firm, must take out professional liability insurance that protects them in the performance of their duties, and for further five years after they cease their professional activities.
What are the four kinds of liability for financial advisors?
- civil liability
- Criminal liability
- Professional liability
- Ethical liability
