ETHICS CH.1: Legal framework of life ins

Question 1

Insurance law Sources (#3 CCL)

Answer 1

1. constitution
2. common law
3. legislation + regulation

Question 2

Canadian Constitution

Answer 2

• takes precedence over all other sources of law
• pariament must comply with it
• insurance law = provincial

Question 3

Common Law

Answer 3

• based on PAST decisions of judges (case law)

- applies to all CDA except QC

Question 4

Insurance contract (long)

Answer 4

• short: covers risk of 1 or more ppl dying
• Long: undertaking by 1 person to indemnify (compensate) another against loss, liability for loss, in respect of certain risk/peril to hih the object of insurance may be exposed or pay a sum of money or other thing of value upon the happening of a certain event

Question 5

ANNUITY CONTRACT

Answer 5

considered life ins

Question 6

life insurance

Answer 6

covers risk of 1 or more ppl dying

Question 7

Accident and sickness insurance (DCAARL)

Answer 7

• for loss of health. i.e:
• disability ins
• critial illness
• accidental death
• accidental dismem.
• reimbursement of med costs
• LTC

Question 8

AGENCY rELATIONSHIP INCLS (3 AAP)

Answer 8

1. AGENCY
2. AGENTS
3. PRINSIPAL

Question 9

AGENTS

Answer 9

act on behalf of ins co

either :

• employed by indiv insureres (independent)
• independent reps of specific ins co (captive)

Question 10

AGENTS: Independent agents

Answer 10

• contracts w/ multiple insurers

- place biz through MGA

Question 11

AGENTS: captive

Answer 11

• rep single insurer or bound by contract or employment to rep single MGA
• only sells that co products
• MIGHT be self emp.

Question 12

Managing General Agent (MGA)

Answer 12

Facilitates biz btwn agents, clients, insurers by:

• supporting/assisteing in obtaining contracts w insurer, granting aut to agent
• direct sales support
  -pooling commisions from various insurers
  ETC…..

Question 13

Insurance Agency

Answer 13

corp pr partnership that holds licence from regulator or several regulators

must have min 1 agent in same category

Question 14

Regulation of insurance + Licensing

Answer 14

• prov/terr. ins legislation gives actuaries extensive pwoer + responsibilities incl”: reporting on financia soundness of life ins biz

Question 15

Uniform Law Conference

Answer 15

if Policy holder moves prov’s, NEW prov laws may apply (to will),
but how law interpreted is based on where policy was SIGNED (old prov)

Question 16

capacity + status of person

Answer 16

to enter contract, must:

• be min age: 18 yrs OR 16 yrs to give/refuse consent re own care
• have legal capacity (able to give valid consent: understand terms, understand agreement is binding)

Question 17

Natural Person

Answer 17

• a human w legal capacity to make decisions

Question 18

Partnerships

Answer 18

• 2 or more ppl doing biz together
• can beb individualas or corps
• partners can sign for each other + all partners responsible for other partners signatures/agreements–> except if limited Liability partnership

Question 19

Limited laibility partnership

Answer 19

partners have statutory of limitations on their liability from other oartners actions

Question 20

Legal Person (Corporation)

Answer 20

• its a legal person
• seperate entity from owners
• corp can enter a contract
• owned by shareholders, who elect a board of directiors

Question 21

signing officer (corporation)

Answer 21

person auth to sign on behalf of corp

Question 22

Executive officers (corporation)

Answer 22

PRFESIDENT OR SECRETARY THAT CAN REP CORP IN SOME TRANSACTIONS/ACTIVITIES

Question 23

court appointed guardian + 30 day rule

Answer 23

• if DB payable to minor, gaurd. accepts pmt

- of no Guard.: in 30 dys ins. pays $ to courts, $ managed by public trustee or court app. guard.

Question 24

Power of Attorney (POA)

Answer 24

• Legal doc by 1 person (principal) appointing another (attorney) to deal with biz/property/fin. on their behalf
• end when person becomes mentally incapable (except if ENDURING POA)

Question 25

Enduring POA

Answer 25

CONTINUES if principal becomes mentaly incapable may req doctor/capacity assessor to trigger it attorney cannot make will or chose ben, except if court ordered

Question 26

POA vs Living will

Answer 26

POA: specific person names Living will: no specific person named, specifies treatment + pers. care wishes

Question 27

common law

Answer 27

- no preseumed division - to specify legal rights: cohabitation agreement - statues determined by lvg together in conjugal/ marriage like relationship for certain time - may have rights to spousal support or dependants relief (if death)

Question 28

Marriage

Answer 28

- presumed division | - domestic marriage contract: to adjust rights before (prenup) or during relationship

Question 29

Divorce/Seperation: Family property

Answer 29

- division depends on when acquired+ from where - fam. property: divided equally IF: acquired durng marriage or enjoyed by family or generates income that sopprts family - if acquired b4 marriage OR inheritance: not divided

Question 30

eexecutir/ executrix/ estate trustee

Answer 30

- appointed in will to be i charge of estate | -

Question 31

property not controlled by will

Answer 31

- joint tenancy - registered plan w named ben - life ins w named ben - surviving spouse under pension plan

Question 32

dependant relief legislation

Answer 32

gives dependants priority b4 any distrbution/disposition

Question 33

Testate

Answer 33

- died w will - after debts paid, assets distributed according to will - seperation doesnt affect will - divore: as if person died

Question 34

Intestate

Answer 34

- died w/o will | - someone must apply to court to be in charge of estate and dist. according to prov. rules

Question 35

Intervivos trust

Answer 35

- between living ppl

Question 36

Testamentary trusts

Answer 36

- when someone dies

Question 37

Trusts

Answer 37

- can take property title (Guard., POA CANNOT) - Can own any type of property, incl ins policy (+ can pay premiums) - can trf ownership of policy to ben. ORRR collect + handle the $ as directed by trust

Question 38

Bankruptcy

Answer 38

- too much debt, person has assets but not enought to cover debts - ins proceeds payable to beneficairy not part of estate--- PROTECTED!!!!!

Question 39

TRUSTEE IN BANKRUPTCY

Answer 39

collect the assets + uses to pay debts

Question 40

bankruptcy: asset protection

Answer 40

name direct beneficiary INSTEAD of estate

Question 41

irrevocabe ben

Answer 41

- cannot be changed or removed | - assets protected even if outside of protected asset class

Question 42

Pension Funds

Answer 42

- LIRA, LIF, ANNUITY purch. w PENSION FUNDS | - soe prov, registered products protected even if no ben. + not issue by life ins. co

Question 43

Civil fault

Answer 43

- an action/ ommision causing someone loss/harm Not just physical: - repuration (defamation) - emotional - economic - privacy violation - property violation - constitutional neglect