Insurance Adjusters, Agents and Brokers Regulations

N.L.R. 989/1996

Newfoundland and Labrador — Regulations

This is an official version.

St. John's, Newfoundland and Labrador, Canada

Important Information

(Includes details about the availability of printed and electronic

versions of the Statutes.)

Table of Regulations

Main Site

How current is this regulation?

CONSOLIDATED NEWFOUNDLAND

AND

LABRADOR REGULATION 989/96

Insurance Adjusters, Agents and Brokers Regulations

under the

Insurance Adjusters, Agents and Brokers Act

(O.C. 96-295)

Amended by:

56/97

CONSOLIDATED NEWFOUNDLAND

AND

LABRADOR REGULATION 989/96

Insurance Adjusters, Agents and Brokers Regulations

under the

Insurance Adjusters, Agents and Brokers Act

(O.C. 96?295)

Under the authority of

section 44 of the Insurance Adjusters, Agents and Brokers Act

and the Subordinate Legislation Revision and Consolidation Act

, the Lieutenant-Governor in Council makes the following regulations.

REGULATIONS

Analysis

PART I

LICENSING

Short title

Definitions

Application for licence

Application for renewal

Notice of termination

Work limited

Full time work required

Non-application

Adjusters

Examination result

Level I licensee

Level II licence

Courses required

Level

III

licence

Level IV licence

Sponsorship limited

Non-application

Insurance licences

Level I licence

Level II licence

Level II licence issued

Level

III

licence

PART II

TRUST ACCOUNTS

Trust accounts

Trust funds

Insurer interest

Beneficiary interest

Withdrawal of funds

Trust accounts

Accounting records

Access to records

Audited statement

Additional statement

PART

III

REPLACEMENT OF CONTRACTS OF

LIFE

INSURANCE

Definition

Inducement prohibited

Replacement detrimental

Amendment or replacement required

Statement of intention

Replacement insurance

Insurer's duties

Required information

Withdrawal of application

PART IV

REPEAL

Repeal

PART I

LICENSING

Short title

These regulations may be cited as the Insurance Adjusters, Agents and Brokers Regulations.

48/91 s1

Back to Top

Definitions

In these regulations

(a)

"Act" means the Insurance Adjusters, Agents and Brokers Act

(b)

"A.I.I.C." means Associate of the Insurance Institute of Canada;

(c)

"Level I" means a licence which may be held by a student; and

(d)

"minister" means the minister appointed under the Executive Council Act

to administer this Act.

48/91 s2

Back to Top

Application for licence

(1) Application for licence as an adjustment company, agent, broker or special insurance broker shall be submitted to the superintendent in accordance with the form prescribed by the minister.

(2) Application for licence as an adjuster or representative shall be submitted to the superintendent in accordance with the form prescribed by the minister.

48/91 s3

Back to Top

Application for renewal

Notification of transfer of services shall be submitted on a form prescribed by the superintendent.

48/91 s4; 56/97 s1

[Rep. by 56/97 s2]

56/97 s2

[Rep. by 56/97 s2]

56/97 s2

Back to Top

Notice of termination

A sponsor shall provide the superintendent with notice of termination in accordance with the form prescribed by the minister within 2 working days following dismissal, resignation or a termination of a sponsored licensee.

48/91 s8

Back to Top

Work limited

A person licensed under the Act shall work only in the field of insurance for which a licence is issued.

48/91 s9

Back to Top

Full time work required

A person holding an adjuster or representative Level I licence shall work full time as an adjuster or representative following issue of the licence.

48/91 s10

Back to Top

Non-application

Section 9 does not apply to a representative who works in an area of the province that, in the opinion of the superintendent, does not have sufficient population to support a full time representative.

48/91 s11

Back to Top

Adjusters

Licences may be issued in the following categories:

(

a) Adjuster Level I;

(

b) Adjuster Level II;

(

c) Adjuster Level

III

(

d) Adjuster Level IV; and

(

e) Adjustment Company,

provided that applicants for Level I, Level II or Level

III

licences are sponsored by the holder of an adjuster Level IV licence.

48/91 s12

Back to Top

Examination result

An adjuster Level I licence may be issued to a person who has achieved at least 75% success on an adjuster licence examination prescribed by the superintendent, or has equivalent qualifications acceptable to the superintendent.

48/91 s13

Back to Top

Level I licensee

A person holding an adjuster Level I licence

(

a) shall work only on behalf of his or her sponsor or the sponsor's employer; and

(

b) during the first year following issue of the initial licence may assess claims or engage in negotiation of an insurance settlement only under supervision of a person holding an adjuster Level

III

or IV licence, who shall review and countersign a claim report or settlement offer submitted by the Level I licensee.

48/91 s14

Back to Top

Level II licence

A person holding an adjuster Level I licence shall complete the requirements to qualify for an adjuster Level II licence and apply for a Level II licence within the 3 year period immediately following issue of the initial adjuster Level I licence, and failure to comply with this

section shall be cause for suspension, revocation or cancellation of the Level I licence.

48/91 s15; 56/97 s3

Back to Top

Courses required

An adjuster Level II licence may be issued to a person who has held an adjuster Level I licence for at least 2 years and who has successfully completed all of the following courses of the Insurance Institute of Canada:

(

a) C11 - Principles and Practices of Insurance;

(

b) C12 - Insurance on Property;

(

c) C14 - Automobile Insurance; and

(

d) C17 - Claims 1, or

has equivalent qualifications acceptable to the superintendent.

48/91 s16

Back to Top

Level

III

licence

An adjuster Level

III

licence may be issued to a person who has held an adjuster Level II licence for at least one year and who has successfully completed, within the 3 year period immediately preceding application, all of the following courses of the Insurance Institute of Canada:

(

a) C13 - Insurance Against Liability;

(

b) C33 - Insurance on Property -

Part II;

(

c) C46 - Claims II; and

(

d) C43 - Casualty Covers, or

has equivalent qualifications acceptable to the superintendent.

48/91 s17

Back to Top

Level IV licence

An adjuster Level IV licence may be issued to a person who has held an adjuster Level

III

licence for at least one year and who has successfully completed, within the 7 year period immediately preceding application, the A.I.I.C. program of the Insurance Institute of Canada, including all of the following courses:

(

a) C32 - Bodily Injury Claims;

(

b) C16 - Insurance Organization, Accounts and Finance; and

(

c) another 2 optional courses, or

has equivalent qualifications acceptable to the superintendent.

48/91 s18

Back to Top

Sponsorship limited

A person holding an adjuster Level IV licence shall not sponsor more than 5 persons holding adjuster Level I licences.

48/91 s19

Back to Top

Non-application

The provisions of the Act and these regulations do not apply to a person adjusting or dealing solely with claims

(

a) under a contract of aircraft insurance;

(

b) under a contract of marine insurance;

(

c) under a contract of life insurance;

(

d) under a contract of accident insurance, sickness insurance or accident and sickness insurance;

(

e) under a contract of automobile insurance, provided that total property damage incurred by all parties does not exceed $1,500 and the claim does not involve

(

i) bodily injury,

(ii)

salvage,

(iii)

subrogation,

(iv)

fraud,

(

v) dispute as to coverage,

(vi)

dispute as to liability,

(vii)

total loss of a vehicle, or

(viii)

breach of a statute;

(

f) under a contract of property or liability insurance, provided that total damage incurred by all parties does not exceed $1,500 and the claim does not involve

(

i) bodily injury,

(ii)

salvage,

(iii)

subrogation,

(iv)

fraud,

(

v) dispute as to coverage,

(vi)

dispute as to liability, or

(vii)

breach of a statute; and

(

g) arising as a result of a catastrophic event where, in the opinion of the superintendent, the number of adjusters licensed under the Act does not facilitate the timely adjusting of losses arising from the catastrophe.

48/91 s20

Back to Top

Insurance licences

Licences may be issued in the following categories, provided that the applicant is sponsored by a life or accident and sickness insurer licensed under the Insurance Companies Act:

(

a) Life Insurance Representative Level I;

(

b) Life Insurance Representative Level II;

(

c) Life Insurance Representative Level

III

(

d) Life Insurance Agent;

(

e) Life Insurance Broker;

(

f) Accident and Sickness Insurance Representative;

(

g) Accident and Sickness Insurance Agent;

(

h) Accident and Sickness Insurance Broker; and

(

i) Travel Insurance Agent.

48/91 s21

Back to Top

Level I licence

A life insurance representative Level I licence may be issued to a person who has achieved at least 75% success on both a life insurance representative licence examination and an accident and sickness insurance representative licence examination prescribed by the superintendent, or has equivalent qualifications acceptable to the superintendent.

48/91 s22

Back to Top

Level II licence

A person holding a life insurance representative Level I licence shall complete the requirements prescribed to qualify for a life insurance representative Level II licence and apply for a Level II licence within the 3 year period immediately following issue of the initial life insurance representative Level I licence, and failure to comply with this

section shall be cause for suspension, revocation or cancellation of the Level I licence.

48/91 s23; 56/97 s4

Back to Top

Level II licence issued

A life insurance representative Level II licence may be issued to a person who has held a life insurance representative Level I licence for at least one year and who has successfully completed the Life Underwriters Association Training Courses I and II, or has equivalent qualifications acceptable to the superintendent.

48/91 s24

Back to Top

Level

III

licence

A life insurance representative Level

III

licence may be issued to a person who has held a life insurance representative Level II licence for at least one year and who has successfully completed the courses and examinations required for designation as a chartered life underwriter, or has equivalent qualifications acceptable to the superintendent.

48/91 s25

Back to Top

section 28.

48/91 s30

Back to Top

Level I licence

A property and casualty insurance representative Level I licence may be issued to a person who has

(

a) achieved at least 75% success on a property and casualty insurance representative licence examination prescribed by the superintendent; or

(

b) successfully completed the "Fundamentals of Insurance" course of the Insurance Brokers Association of Canada, or

has equivalent qualifications acceptable to the superintendent.

48/91 s31

Back to Top

Representation limited

A person holding a property and casualty insurance representative Level I licence shall represent only his or her sponsor.

48/91 s32

Back to Top

Courses required

A property and casualty insurance representative Level II licence may be issued to a person who has held a property and casualty representative Level I licence for at least one year and who has successfully completed within the 4 year period immediately preceding the application

(

a) the following courses of the Insurance Institute of Canada:

(

i) C11 - Principles and Practices of Insurance,

(ii)

C71 - Personal Lines Production,

(iii)

C17 - Claims 1,

(iv)

C14 - Automobile Insurance,

(

v) C12 - Insurance on Property, and

(vi)

C72 - Commercial Lines Production 1; or

(

b) Parts 1 and 2 of the Canadian Accredited Insurance Broker designation program, or

has equivalent qualifications acceptable to the superintendent.

48/91 s33

Back to Top

Level

III

licence

A property and casualty insurance representative Level

III

licence may be issued to a person who has held a property and casualty insurance representative Level II licence for at least one year and who has successfully completed the A.I.I.C. program of the Insurance Institute of Canada or the Canadian Accredited Insurance Broker designation program, or has equivalent qualifications acceptable to the superintendent.

48/91 s34

Back to Top

Sponsorship limited

A sponsor shall not sponsor more than 5 property and casualty insurance representative Level I licensees for each property and casualty insurance representative Level II or Level

III

licensee sponsored by the sponsor.

48/91 s35

Back to Top

Declaration

The declaration required from a special insurance broker in subsection 25(4) of the Act shall be in a form prescribed by the superintendent.

48/91 s36

Back to Top

Liability coverage

(1) A licence shall not be issued except upon proof satisfactory to the superintendent that the applicant will be covered for the duration of the licence by a policy of

(

a) liability insurance for an amount of at least $1 million, or $1.5 million in the case of a special insurance broker under

section 24 of the Act, in respect of an occurrence with regard to negligent acts, errors or omissions with extended coverage for loss resulting from fraudulent acts pertaining to the licensed activity; and

(

b) fidelity insurance against losses arising from dishonesty of employees, a proprietor, partners, directors, officers or shareholders for an amount of at least $100,000 in respect of an occurrence.

(2) The policies of insurance referred to in this

section shall be in a form acceptable to the superintendent and shall be issued by an underwriting insurer acceptable to the superintendent.

(3) A licence expires on the date of the effective cancellation or non-renewal of an insurance policy unless before that date the insurance is replaced in compliance with subsection (1).

135/93 s1; 56/97 s5

Back to Top

Prohibitions on policy

A policy of insurance specified in

section 36

(

a) shall not contain a deductible clause in an amount greater than $10,000 for each occurrence, unless the licensee files proof of financial responsibility acceptable to the superintendent; or

(

b) shall not be cancelled, terminated or renewed and a person shall not be deleted from a group policy, except upon 60 days' notice by registered mail from the underwriting insurer or the licensee to the superintendent, provided that the superintendent may waive the period of 60 days' notice or a part of it following proof satisfactory to the superintendent that the licensee has ceased licensed activity or is covered by another policy of insurance acceptable to the superintendent.

48/91 s38; 135/93 s2

Back to Top

Liability

An underwriting insurer or an insured who issues, or who permits to be cancelled, terminated or not renewed, or who deletes a licensee from a policy of insurance in violation of

section 37 shall be liable together with the licensee concerned for all damages arising as a result of that violation.

48/91 s39; 135/93 s3

Back to Top

Licence renewal

Upon becoming aware that a licensee has been charged with

(

a) an offence under the Criminal Code;

(

b) a quasi-criminal offence under another Act of the Parliament of Canada or a provincial legislature,

the superintendent may cause an investigation to be made into the matter and after the licensee has been given an opportunity to be heard, the superintendent may suspend, revoke, or place conditions upon the licensee's licence.

48/91 s40; 56/97 s6

Back to Top

Conditional licence

Upon becoming aware that a licensee has been charged with

(

a) an offence under the Criminal Code

relating to a licensed activity;

(

b) a quasi-criminal offence under another Act of the Parliament of Canada or a provincial legislature relating to a licensed activity; or

(

c) an offence under the Act,

the superintendent shall cause an investigation to be made into the matter and after the licensee has been given an opportunity to be heard, the superintendent may suspend, revoke, or place conditions upon the licensee's licence.

48/91 s41; 56/97 s6

Back to Top

Civil proceedings

Upon becoming aware that civil proceedings have been commenced in a court of competent jurisdiction against a licensee in a matter arising from a licensed activity, the superintendent may cause an investigation to be made into the matter and after the licensee has been given an opportunity to be heard, the superintendent may suspend, revoke, or place conditions upon the licensee's licence.

48/91 s42; 56/97 s6

Back to Top

Investigation

The superintendent may commence or re-open an investigation or hearing at any time.

48/91 s43

Back to Top

Violations by licensee

The superintendent may suspend, revoke, or place conditions upon a licence if, after an investigation and after the licensee has been given an opportunity to be heard, the superintendent has evidence satisfactory to him or her that the licensee

(

a) may have engaged in misrepresentation or in a fraudulent, deceitful or dishonest act;

(

b) has made a material mistake in the application for a licence;

(

c) has violated the provisions of

(

i) the Insurance Companies Act,

(ii)

the Insurance Contracts Act,

(iii)

the Life Insurance Act,

(iv)

the Fire Insurance Act,

(

v) the Accident and Sickness Insurance Act,

(vi)

the Automobile Insurance Act,

(vii)

the Trade Practices Act,

(viii)

the Act,

(ix)

the Insurance Acts of Canada or of a province to which the licensee is subject, or

(

x) a rule or regulation made under the authority of those Acts;

(

d) has unreasonably failed to make payment of money due to a person in relation to the licensed activity;

(

e) has placed insurance with insurers other than those licensed to transact business in the province, unless that insurance was placed in accordance with

section 24 of the Act; or

(

f) has demonstrated incompetence or untrustworthiness in relation to the licensed activity.

48/91 s44; 56/97 s6

Back to Top

Sponsor's licence

When a sponsor's licence is suspended, revoked or cancelled, the licences of all persons sponsored by that sponsor are suspended until the sponsor's licence is restored or until a transfer of services to another sponsor is approved by the superintendent.

48/91 s45; 56/97 s7

Back to Top

Licences to corporate bodies

A licence may be issued to a body corporate or partnership only where the superintendent is satisfied that

(

a) at least one of the persons responsible for the regular operation of the applicant

(

i) holds the highest level of licence in the field of insurance in which the applicant proposes to engage, or

(ii)

has equivalent qualifications acceptable to the superintendent; and

(

b) financial resources sufficient to fund the operation of the applicant are available.

48/91 s46

Back to Top

Licence expiration

A natural person who applies for a licence

(

a) within 2 years following the expiration of a licence issued under the Act shall be eligible for the level of licence previously held;

(

b) more than 2 years following expiration of a licence issued under the Act shall be required to successfully complete the qualifications prescribed in

section 12, 21, 26 or 30 and the superintendent may then issue the level of licence which the superintendent considers appropriate.

48/91 s47

Back to Top

Variance of time period

The superintendent may, in his or her absolute discretion, vary a time period stated in these regulations, upon written application stating reasons why a variation is requested, and the superintendent may require that information, assurances or hearings that he or she considers appropriate.

48/91 s48

Back to Top

Multiple attempts

A person who does not achieve at least 75% in an examination prescribed by the superintendent in

section 12, 21, 26 or 30 shall be permitted to register for another examination attempt after the expiry of the following periods of time:

(

a) second attempt - one month after the first attempt;

(

b) third attempt - one month after the second attempt; and

(

c) subsequent attempts - 6 months after the previous attempt.

48/91 s52

Back to Top

Return required by Act

The return required by

section 34 of the Act shall be in the form of a letter signed by an officer or director of the insurer listing the names, licence numbers and addresses of all persons required to be identified.

48/91 s53

Back to Top

Presumption

For the purpose of subsection 38(2) of the Act, a person who has procured insurance contracts on behalf of a fraternal or mutual benefit society in the preceding year in an amount of insurance in excess of $100,000 shall be presumed to be devoting or intending to devote more than 50% of his or her time to the solicitation or procurement of insurance contracts for the society.

48/91 s54

Back to Top

Transition

A person who holds a valid licence issued under the Life and Accident Insurance Agents Licensing Act

or the Insurance Adjusters Act

on the date the Act comes into force is considered to hold that licence under the Act and applications for renewal shall be made in accordance with these regulations.

48/91 s55

Back to Top

Presumption of licensure

A person whose employment does not require that person to hold a licence under the Life and Accident Insurance Agents Licensing Act

or the Insurance Adjusters Act

on the date the Act comes into force but which does require that person to hold a licence under the Act is considered to hold that licence from the date the Act comes into force until the date a licence is issued or refused under the Act, provided that application for licence is made within one month following the date the Act comes into force.

48/91 s56

Back to Top

Experience of applicant

A person referred to in

section 51 or 52 who applies for a licence or renewal under the Act shall be eligible for the level of licence which corresponds with the years of experience indicated in the lists that follow:

(

a) insurance adjusting field

(

i) Adjuster Level I - under 3 years,

(ii)

Adjuster Level II - 3 years to under 5 years,

(iii)

Adjuster Level

III

- 5 years to under 7 years, and

(iv)

Adjuster Level IV - 7 years and over;

(

b) life insurance field

(

i) Life Insurance Representative Level I - under 3 years,

(ii)

Life Insurance Representative Level II - 3 years to under 6 years, and

(iii)

Life Insurance Representative Level

III

- 6 years and over; and

(

c) property and casualty insurance field

(

i) Property and Casualty Representative Level I - under 3 years,

(ii)

Property and Casualty Representative Level II - 3 years to under 6 years, and

(iii)

Property and Casualty Representative Level

III

- 6 years and over.

48/91 s57

Back to Top

Licence levels

A natural person who is issued a licence under

section 53 may be issued higher levels of licence upon application and proof satisfactory to the superintendent that he or she has acquired the corresponding years of experience stated in

section 53, notwithstanding that the educational requirements prescribed in these regulations for those subsequent licences may not be met.

48/91 s58

Back to Top

Licences terminated

A natural person who applies for a licence under the Act within 2 years after termination of

(

a) a licence held under the Life and Accident Insurance Agents Licensing Act

or the Insurance Adjusters Act;

(

b) employment which did not require a licence under the Life and Accident Insurance Agents Licensing Act

or the Insurance Adjusters Act

but which does require a licence under the Act,

shall be eligible for the level of licence prescribed in

section 53 and may take benefit of the provision of

section 54, provided that that person held the original licence or employment for a minimum of 3 years immediately before termination of the original licence or employment.

48/91 s59

Back to Top

Application under s.59

A natural person who applies for a licence under the Act more than 2 years after termination of a licence or employment referred to in

section 55 shall be required to successfully complete the qualifications prescribed in

section 12, 21, 26 or 30 whereupon the superintendent may issue the level of licence that the superintendent considers appropriate.

48/91 s60

PART II

TRUST ACCOUNTS

Back to Top

Trust accounts

An agent, broker and special insurance broker shall maintain a trust account that may be interest bearing at a chartered bank, trust company or credit union in the province to be used solely for the discharge of trust obligations under the Act.

48/91 s61

Back to Top

Trust funds

All trust funds received by an agent, broker or special insurance broker, whether by cash, cheque or otherwise, shall be held apart from his or her own money or estate and shall be deposited in the trust account referred to in

section 57 or remitted to the beneficiary not later than 3 business days following the day on which the funds are received.

48/91 s62

Back to Top

Trust funds

(1) A representative shall not maintain a trust account, unless authorized to do so by the superintendent, but shall hold all trust funds received separate and apart from his or her own money or estate and shall remit all trust funds to the beneficiary not later than 3 business days following the day on which the funds are received.

(2) A representative authorized by the superintendent to maintain a trust account shall do so in accordance with these regulations.

48/91 s63

Back to Top

Insurer interest

Interest earned on funds held in trust for an insurer shall be the property of the agent, broker, special insurance broker or representative maintaining the account, unless otherwise agreed with the insurer.

48/91 s64

Back to Top

Beneficiary interest

Interest earned on funds held in trust for a beneficiary other than an insurer shall be the property of and paid to that beneficiary with the trust funds.

48/91 s65

Back to Top

Withdrawal of funds

Funds shall not be withdrawn from a trust account except for payment of

(

a) a premium;

(

b) a refund or an adjustment;

(

c) a commission or a deduction to which an agent, broker, special insurance broker or representative is entitled by written consent of the insurer;

(

d) interest and service charges;

(

e) taxes owing on premiums;

(

f) funds deposited in error; and

(

g) another disbursement authorized in writing by the superintendent.

48/91 s66

Back to Top

Trust accounts

A person who maintains a trust account shall maintain current trust account records and prepare a monthly reconciliation of all trust accounts showing trust assets and liabilities and shall keep appropriate documents to verify trust account transactions.

48/91 s67

Back to Top

Accounting records

An agent, broker, special insurance broker and representative, other than a representative who is an employee of them or an insurer, shall maintain current accounting records showing the financial affairs of their business and the other information that the superintendent may require, and shall keep appropriate documents to verify the accounting records.

48/91 s68

Back to Top

Accounting records

All accounting records and financial statements maintained under the Act shall be prepared in accordance with generally accepted accounting principles.

48/91 s69

Back to Top

Access to records

The superintendent or his or her representative shall have access at all reasonable times to all accounting records, financial statements and documents required to be maintained and kept by the Act.

48/91 s70

Back to Top

Audited statement

An agent, broker, special insurance broker and representative, other than a representative who is an employee of them or an insurer, shall provide the superintendent with a current audited financial statement within 60 days after written request for it.

48/91 s71

Back to Top

Additional statement

In addition to the requirements of

section 33 of the Act, the superintendent may require an agent, broker, special insurance broker or representative to file a statement of financial affairs in a form prescribed by the superintendent at the times that the superintendent considers necessary.

48/91 s72

PART

III

REPLACEMENT OF CONTRACTS OF

LIFE

INSURANCE

Back to Top

Definition

In this Part, "replacement of a contract of life insurance" means a transaction in which a contract of life insurance is or will be purchased from an insurer and an existing contract of life insurance is or will be

(

a) rescinded, lapsed or surrendered;

(

b) changed to paid-up insurance;

(

c) continued as extended term insurance;

(

d) continued under automatic premium loan;

(

e) changed in a manner that results in a reduction of benefits;

(

f) changed so that more than 50% of the cash value is or will be released; or

(

g) subject to borrowing in excess of 50% of the cash value, either in a single loan or under a

schedule over time,

but does not include a transaction in which

(

h) a new contract of life insurance is made with an insurer with whom the applicant has an existing contract of life insurance in furtherance of a contractual privilege exercised by the policyholder;

(

i) a contract of life insurance is replaced by an annuity; or

(

j) a contract of life insurance is replaced by group insurance,

provided that the superintendent may in his or her discretion determine whether a transaction is a replacement of a contract of life insurance.

48/91 s73

Back to Top

Inducement prohibited

A person shall not directly or indirectly induce or attempt to induce a policy owner to replace an existing contract of life insurance with a new contract of life insurance where the replacement may be detrimental to the interests of the policy owner.

48/91 s74

Back to Top

Replacement detrimental

An agent, broker or representative who becomes aware that replacement of a contract of life insurance may be detrimental to the interests of a policy owner shall explain the consequences of replacement and make every reasonable effort to encourage the policy owner to maintain the existing contract of life insurance.

48/91 s75

Back to Top

Amendment or replacement required

An agent, broker or representative who becomes aware that an existing contract of life insurance should be amended or replaced by another contract of life insurance shall request the insurer which issued the existing contract to amend or replace it in a manner that will ensure that all values, credits or privileges in the existing contract are retained or transferred to a new contract.

48/91 s76

Back to Top

Statement of intention

Every application for a contract of life insurance shall include a statement signed by the applicant stating whether or not replacement of a contract of life insurance is intended.

48/91 s77

Back to Top

Replacement insurance

When replacement of a contract of life insurance is intended or will result from a transaction, the selling agent, broker or representative shall

(

a) before accepting an application for a replacement contract of insurance

(

i) prepare a list of all life insurance contracts to be replaced,

(ii)

prepare, sign, review and leave with the applicant a disclosure statement in the form prescribed by the superintendent pertaining to each contract of life insurance intended to be replaced, and

(iii)

obtain on each completed disclosure statement referred to in subparagraph (ii) the signature of the applicant and the signature of the life insured if other than the applicant attesting to the receipt of the completed disclosure statement;

(

b) within 3 working days of receiving application for a replacement contract of insurance, forward a copy of the signed disclosure statement to the local office of every insurer whose contract is to be replaced;

(

c) forward with each application for a replacement contract of life insurance

(

i) a copy of the signed disclosure statement,

(ii)

a copy of all written proposals presented to the applicant by the agent, broker or representative, and

(iii)

a copy of all written directions received from the applicant; and

(

d) deliver each replacement contract of life insurance to the applicant as soon as possible after receiving it from the insurer, unless contrary written instructions have been received from the applicant.

48/91 s78

Back to Top

Insurer's duties

Upon receiving an application disclosing that there will be replacement of a contract of life insurance, every insurer shall

(

a) ensure that a completed copy of the disclosure statement is filed with the application;

(

b) maintain in its principal office or place of business in Canada for at least 3 years copies of all material forwarded by the agent, broker or representative under these regulations; and

(

c) issue the new contract of life insurance as soon as possible following approval of the application.

48/91 s79

Back to Top

Required information

Every insurer shall provide the information necessary to complete the disclosure statement to other insurers or their agents, brokers or representatives upon request enclosing written authorization of the client.

48/91 s80

Back to Top

Withdrawal of application

(1) An applicant for replacement of a contract of life insurance may withdraw the application by written notice to the replacement insurer or an agent, broker or representative of that insurer within 20 days of receiving delivery of the disclosure statement.

(2) When an applicant withdraws an application for replacement of a contract of life insurance, the replacement insurer shall refund a premium deposit or other payment made by the applicant in respect of the proposed replacement, provided that when the application is for a single premium life insurance policy or a stated group of assets, the refund shall be adjusted to reflect the change in the capital value of the contract.

48/91 s81

PART IV

REPEAL

Back to Top

Repeal

The Insurance Adjusters, Agents and Brokers Regulations, 1991, Newfoundland Regulation 48/91, are repealed.

Earl G. Tucker, Queen's Printer

Document details

Collection	Newfoundland and Labrador — Regulations
Citation	N.L.R. 989/1996
Type	regulation
Volume / chapter	N.L.R. 989/1996
Language	en
Format	htm
Source	PROVINCIAL
Identifier	670109f24a56ce7a0d101bda9035e48d07eb1b3b

Source file is stored in the law ingest library (htm).