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Part II .

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Insurance Agents Licensing Regulations

made under subsection 5(3) and

Section 52 of the

Insurance Act

R.S.N.S. 1989, c. 231

O.I.C. 93-461A (May 31, 1993), N.S. Reg. 81/93

as amended to O.I.C. 2015-96 (March 31, 2015, effective April 1, 2015), N.S. Reg. 113/2015

Definitions

1 In these regulations

(a) “agency” means a sole proprietorship, partnership or corporation which acts as

an agent and which effects, negotiates, solicits or places a contract for

insurance or renewal thereof;

(b) “agent” includes broker;

(ba) “LLQP” means the Life License Qualification Program conducted by an

accredited course provider;

Clause 1(ba) added: O.I.C. 2003-50, N.S. Reg. 27/2003.

(bb) “CAIB Program” means the Canadian Association of Insurance Brokers

educational program;

Clause 1(bb) added: O.I.C. 2003-416, N.S. Reg. 172/2003.

(bc) “CIP Program” means the Chartered Insurance Professionals educational

program offered by the Insurance Institute of Canada;

Clause 1(bc) added: O.I.C. 2003-416, N.S. Reg. 172/2003.

(bd) “supervision” of an individual means the reasonable and prudent oversight of

each insurance transaction conducted by the individual;

Clause 1(bd) added: O.I.C. 2006-573, N.S. Reg. 234/2006.

(c) “trust account” means an account in a bank, trust company, loan company, or

credit union which is separate and apart from all other accounts and designated

as a trust account in which all monies paid to an agent on behalf of insurers or

consumers are deposited and includes a receipt, certificate or other instrument

issued by a chartered bank, trust or loan company, credit union, by the

in trust for a term not exceeding one year if the principal sum evidenced by the

receipt, certificate or other instrument is redeemable on demand;

(d) “trust monies” means all monies received or receivable by an agent or agency

in the course of business from the public on behalf of insurers and all monies

received by the agency or agent on behalf of the public from insurers.

Life insurance agent licensing

(1) An individual shall not be issued a life insurance license that restricts the licensee to

act only as an accident and sickness insurance agent unless the individual

(

a) has passed any qualification examinations prescribed by the Superintendent;

and

(

b) has successfully completed the accident and sickness modules of an LLQP or

has equivalent qualifications or experience acceptable to the Superintendent.

(2) An individual shall not be issued a life insurance license authorizing the licensee to

act as an agent for life and accident and sickness insurance unless the individual

(

a) has passed any qualification examinations prescribed by the Superintendent;

and

(

b) has successfully completed an LLQP or has equivalent qualifications or

experience acceptable to the Superintendent.

(3) Despite subsection (2), an individual may be issued a transitional life insurance

license authorizing the licensee to act as an agent for life and accident and sickness

insurance if the individual

(

a) has passed any qualification examinations prescribed by the Superintendent;

(

b) has successfully completed the transitional modules of an LLQP; and

(

c) undertakes to comply with the conditions set out in subsection (4).

(4) A transitional license issued under subsection (3) shall be revoked if the licensee

fails to

(

a) enroll, within 180 days from the date of being licensed, to complete the

remaining modules of the LLQP;

(

b) work under the supervision of a life insurance agent who has been licensed for

3 years or who has equivalent qualifications or experience acceptable to the

Superintendent;

(

c) maintain a record of all life insurance sales supported by a needs analysis

which is co-signed by the supervising agent;

(

d) continue to be sponsored by an insurance company which undertakes to ensure

the person’s records are kept appropriately; and

(

e) successfully complete the remaining modules of the LLQP within 2 years from

the date of being licensed or January 1, 2007, whichever is earlier.

Section 2 replaced: O.I.C. 2003-50, N.S. Reg. 27/2003.

General insurance agent licensing

(1) A general insurance agent shall be licensed, subject to any limits and conditions

prescribed by the Superintendent pursuant to subsection 36(3) of the Act, as a Level

I, Level II or Level III general insurance agent.

(2) An individual shall not be issued a license as a Level I general insurance agent unless

the individual

(

a) has passed any of the following, or has equivalent experience acceptable to the

Superintendent:

(

i) the Fundamentals of Insurance course offered by the Canadian

Association of Insurance Brokers,

(ii) Parts I and II of the General Insurance Essentials program offered by the

Insurance Institute of Canada,

(iii)

Part I of the CAIB Program,

(iv) CIP Program courses C11 and C130,

(

v) a course that is equivalent to one specified in subclauses (

i) to (iv) and

that is acceptable to the Superintendent.

Clause 3(2)(

a) replaced: O.I.C. 2006-573, N.S. Reg. 234/2006.

Clause 3(2)(

b) repealed: O.I.C. 2006-573, N.S. Reg. 234/2006.

(

c) works under the supervision of a Level II or Level III general insurance agent

or, if the individual is not resident in Nova Scotia, under the supervision of a

general insurance agent holding an equivalent license in the province where the

individual and supervising agent are resident.

(3) A general insurance agent who supervises a Level I general insurance agent is

responsible for overseeing the professional conduct and business activities of the

Level I general insurance agent and must review and approve applications for

insurance completed by the Level I general insurance agent.

Subsection 3(3) amended: O.I.C. 2006-573, N.S. Reg. 234/2006.

(4) An individual shall not be issued a license as a Level II general insurance agent

unless the individual

(

a) has previously been issued a license as a Level I general insurance agent, or has

equivalent qualifications acceptable to the Superintendent; and

(

b) has passed any of the following, or has equivalent experience acceptable to the

Superintendent:

(

i) Parts I, II and III of the CAIB Program,

(ii) CIP Program courses C11, C130 and C131,

(iii) a course that is equivalent to one specified in subclause (

i) or (ii) and that

is acceptable to the Superintendent.

Clause 3(4)(

b) replaced: O.I.C. 2006-573, N.S. Reg. 234/2006.

(5) An individual shall not be issued a license as a Level III general insurance agent

unless the individual

(

a) has previously been issued a license as a Level II general insurance agent, or

has equivalent qualifications acceptable to the Superintendent; and

(

b) has passed any of the following, or has equivalent experience acceptable to the

Superintendent:

(

i) Parts I, II, III and IV of the CAIB Program,

(ii) CIP Program courses C11, C130, C131 and C132,

(iii) a course that is equivalent to one specified in subclause (

i) or (ii) and that

is acceptable to the Superintendent.

Clause 3(5)(

b) replaced: O.I.C. 2006-573, N.S. Reg. 234/2006.

Section 3 repealed: O.I.C. 2003-50, N.S. Reg. 27/2003; added: O.I.C. 2003-416, N.S. Reg. 172/2003.

(1) Despite subsections 3(2), (4) and (5), an individual who is licensed as a general

insurance agent on December 31, 2006, is deemed to be licensed, subject to any

limits and conditions prescribed by the Superintendent under subsection 36(3) of the

Act,

(

a) as a Level I general insurance agent, if the individual has held a license as a

general insurance agent for fewer than 2 years,

(

b) as a Level II general insurance agent, if the individual has held a license as a

general insurance agent for 2 or more years but fewer than 4 years, or

(

c) as a Level III general insurance agent, if the individual has held a license as a

general insurance agent for 4 or more years.

(2) An agency that is licensed on December 31, 2006, is deemed to be licensed as an

insurance agency, subject to any limits and conditions prescribed by the

Superintendent under subsection 36(3) of the Act.

Section 4 repealed: O.I.C. 2003-50, N.S. Reg. 27/2003; added: O.I.C. 2003-416, N.S. Reg. 172/2003; replaced:

O.I.C. 2006-573, N.S. Reg. 234/2006.

License applications

5 No person shall apply for an insurance agent's license unless the person is at least nineteen

years of age.

Subsections 5(1) and 5(3) repealed; subsection 5(2) renumbered as

Section 5: O.I.C. 2003-50, N.S. Reg.

27/2003.

Examinations

6 No applicant for an insurance agent's license shall be permitted to write an agent's

qualifying examination or supplemental examination unless the applicant

(

a) registers for the qualifying examination or supplemental examination with the

Service Nova Scotia; and

[Note: The reference to the Department of Service Nova Scotia and Municipal Relations has been updated in

accordance with Order in Council 2014-71 under the Public Service Act , R.S.N.S. 1989, c. 376, effective April

1, 2014.]

(

b) pays upon registration a fee of $66.35 for each qualifying examination and

$33.15 for each supplemental examination.

Clause 6(

b) replaced: O.I.C. 2015-96, N.S. Reg. 113/2015.

7 Where an applicant fails to write an insurance agent's qualifying examination or

supplemental examination within sixty days from the date of registration, the registration

shall thereupon be null and void.

Subsection 7(1) renumbered

Section 7; subsection 7(2) repealed: O.I.C. 2003-50, N.S. Reg. 27/2003.

8 Any person who fails to attain the pass mark for an insurance agent's qualifying

examination and any supplemental examination after three successive attempts shall not be

permitted to write another examination unless

(

a) the person successfully completes a course as may be approved by the

Superintendent; or

(

b) a period of not less than 6 months has elapsed since the date on which the

person last wrote an examination.

Subsection 8(1) repealed; subsection 8(2) renumbered as

Section 8 and amended: O.I.C. 2003-50, N.S. Reg.

27/2003.

Fees for licenses

(1) The fees payable upon application for or renewal of a three year license are as

follows:

(

a) where the applicant is an individual ................................................... $398.10

Clause 9(1)(

a) amended: O.I.C. 2015-96, N.S. Reg. 113/2015.

(

b) where the applicant carries on business as a partnership,

corporation or under a business name ................................................. $398.10

Clause 9(1)(

b) amended: O.I.C. 2015-96, N.S. Reg. 113/2015.

Clause 9(1)(

c) repealed: O.I.C. 2000-235, N.S. Reg. 81/2000.

(1A) The fee payable upon application for a license determined by the Superintendent to

expire in 2 years or less is $265.40.

Subsection 9(1A) added: O.I.C. 2003-50, N.S. Reg. 27/2003; amended: O.I.C. 2015-96, N.S. Reg. 113/2015.

(2) Subject to subsections (3) and (4), a fee paid for a license shall be refunded in

respect of any unexpired second and third years of the license in the following

circumstances:

(

a) where the licensee is an individual, upon the death, retirement or withdrawal of

sponsorship of the licensee, unless a new application has been received by the

Superintendent within twenty (20) days of the sponsorship termination date;

(

b) where the licensee carries on business as a partnership, corporation or under a

business name, upon sale of the business, partnership or corporation.

(3) The amount of any refund pursuant to subsection (1) shall be one-third of the license

fee for each full unexpired year of the term of the license.

(4) No refund is payable pursuant to subsections (2) and (3) unless

(

a) an application for the refund is made in writing within a period of not later than

one year immediately following the date of death, retirement, withdrawal of

sponsorship or sale mentioned in subsection (2);

(

b) the license is returned to the Superintendent before or upon the application for

the refund;

(

c) the license has not otherwise been suspended, cancelled or revoked by the

Superintendent; and

(

d) a new license application has not been received by the Superintendent

reflecting a change in sponsorship.

(5) The fee payable on application for a transfer of sponsorship of an agent or agency is

$66.35.

Subsection 9(5) added: O.I.C. 2000-235, N.S. Reg. 81/2000; amended: O.I.C. 2015-96, N.S. Reg. 113/2015.

(6) The fee payable for a certificate of status respecting a license is $13.30.

Subsection 9(6) added: O.I.C. 2013-105, N.S. Reg. 116/2013; amended: O.I.C. 2015-96, N.S. Reg. 113/2015.

Non-resident licenses

(1) Despite Sections 2, 3, and 4, the Superintendent may issue an insurance agent or

agency license to an applicant who resides outside of Nova Scotia if the applicant

holds a valid license in good standing for the same class of insurance issued by the

jurisdiction in which the person resides as evidenced by a certificate of authority

issued by that jurisdiction.

Subsection 10(1) amended: O.I.C. 2003-416, N.S. Reg. 172/2003.

(2) If an applicant holds a valid license in good standing issued by a jurisdiction where

there is no level licensing system, the applicant will be assessed using the criteria set

out in Sections 2, 3, and 4 of these regulations to determine the level of license to be

issued.

Subsection 10(2) amended: O.I.C. 2003-416, N.S. Reg. 172/2003.

Licensed agent required for agency license

(1) Every licensed insurance agency shall have an agent licensed to sell the class or

classes of insurance offered by the agency.

Section 11 renumbered subsection 11(1): O.I.C. 2003-416, N.S. Reg. 172/2006.

(2) Every licensed insurance agency shall appoint an agent in charge who shall either be

a Level III general insurance agent or be acceptable to the Superintendent on the

basis of the agent’s experience and qualifications.

Subsection 11(2) added: O.I.C. 2003-416, N.S. Reg. 172/2003; replaced: O.I.C. 2006-573, N.S. Reg. 234/2006.

Errors and omissions and fidelity insurance required

(1) Every general insurance agent or agency which holds a general insurance license

shall have and maintain

(

a) errors and omissions insurance to a minimum amount of not less than

$500,000.00 in coverage with extended coverage for loss resulting from

fraudulent acts of employees; or

(

b) some other form of financial guarantee as approved by the Superintendent of

not less than $500,000.00 in coverage in respect of any one occurrence.

(2) Every general insurance agency which holds a general insurance license shall

maintain fidelity insurance against losses arising from dishonesty of employees, a

proprietor or partners, directors and officers in a form approved by the

Superintendent for an amount of not less than $100,000.00 in coverage.

(3) Every insurance policy referred to in subsections (1) and (2) shall contain an

endorsement stipulating that the Superintendent shall be given written notice by

certified mail by the insurer of any cancellation or non-renewal of the policy and that

the cancellation or non-renewal of the policy shall not become effective until thirty

days after actual receipt of the notice by the Superintendent.

(4) Subject to subsection (3), a general insurance agent's or agency's license expires on

the date of the effective cancellation or non-renewal of an errors and omissions or

fidelity policy referred to in subsections (1) and (2) unless before that date the

insurance is replaced or the agent or agency otherwise satisfies the Superintendent

that the insurance agent or agency is in compliance with subsections (1) and (2).

Annual filings

(1) Every general insurance agency, or general insurance agent not representing an

agency holding a general insurance license and receiving insurance premiums, shall

file with the Superintendent within 120 days of the fiscal year end of the agency or

agent a trust account reconciliation worksheet in Form 1 of these regulations in order

to maintain the current status of their license.

(2) Despite subsection (1), where a general insurance agent referred to in subsection

(1) does not have a fiscal year end, the trust account reconciliation worksheet shall be

filed by April 30th of the immediately following year.

(3) Where the holder of a license referred to in subsection (1) fails to file the trust

account reconciliation worksheet in compliance with this Section, the

Superintendent may cancel the license.

(4) This

Section shall not come in force until the expiration of twenty-four months

following the effective date of these regulations.

Trust accounts

(1) In this Section, any reference to “agent” or “agency” means agent or agency referred

to in

Section [subsection] 13(1) of these regulations.

(2) Subject to

Section [subsections] 26(1) and (2) of the Act, every insurance agent or

agency shall maintain, for all trust monies received or monies deemed to be trust

monies, a trust account, separate and apart from all other accounts, at any Nova

Scotia branch of

(

a) a chartered bank;

(

b) a trust or loan company; or

(

c) a credit union;

and the account shall be kept in the name of the agent or agency and shall be

designated as a trust account.

(3) Despite subsection (2), an insurance agent or agency holding a license in Nova

Scotia but operating in another jurisdiction may be permitted by the Superintendent,

in the discretion of the Superintendent, to maintain a trust account in that jurisdiction

at a branch of

(

a) a chartered bank;

(

b) a trust or loan company; or

(

c) a credit union;

deems appropriate and may revoke the permission at any time.

(4) All trust monies received by an insurance agent or agency, whether by cash or by

cheque or otherwise, payable to the agent or agency, shall be deposited in the agent's

or agency's trust account without delay, and in any case shall not knowingly be

deposited later than three banking days after the day the monies were received, but

money belonging to the agent or agency may be withdrawn from the trust account

once received from an applicant for an insurance contract.

(5) No insurance agent or agency shall disburse or withdraw any monies held in trust

received or as otherwise provided in

Section 18 of these regulations, and every

cheque drawn on the trust account shall have the words “trust account” and the name

of the agent or agency in whose name the trust account is kept imprinted thereon.

(6) At all times an insurance agent or agency shall maintain in its trust account monies

that are sufficient, together with trust monies receivable, to meet all its trust

obligations, but thirty-three percent of the total accounts receivable over ninety days

from the insurer's billing date shall not be considered a trust asset.

(7) When requested in writing by the Superintendent or the representative of the

Superintendent, every agent or agency shall, within thirty days after the request,

account for all trust monies received by the insurance agent or agency.

15 Every insurance agent or agency required by these regulations to maintain a trust account

shall maintain accounting records in accordance with generally accepted accounting

principles, and shall maintain books, records and accounts in connection with the business

of the agent or agency to record

(

a) all money received in trust for insurers or members of the public;

(

b) all disbursements out of money held in trust; and

(

c) all specifically identified property, other than money held in trust including

marketable debentures, deposit receipts, treasury bills or other negotiable

instruments and any other thing of value; and

(

d) any instrument that could be negotiated by the agent or agency.

16 As a minimum requirement to comply with

Section 16 [15] of these regulations, every

insurance agent or agency who is required by these regulations to maintain a trust account

shall maintain, on a current basis, and in chronological order, books of account recording

(

a) all receipts and disbursements of money, distinguishing therein between

(

i) the receipt of money in trust for insurers and members of the public and

disbursements out of money held in trust, and

(ii) money received and money paid on the account of the agent or agency;

(

b) books of account including a record in the form of a revenue journal;

(

c) a file or copies of billings showing all commissions or fees charged or billings

to members of the public;

(

d) bank statements or pass books, cashed cheques and detailed deposit slips for

the trust account, giving information pertaining to each entry comprising the

deposit;

(

e) a monthly bank reconciliation or reconciliations which correctly reconcile the

statement or pass book figures of the depository with the figures shown as on

deposit in trust according to the agent or agency's books of account;

(

f) a listing or other record showing all specifically identified property held in trust

from time to time for insurers or members of the public;

(

g) a record showing the monthly totals of the trust assets and trust liabilities as

they appear from the books and records of the agent or agency.

17 Where these regulations require a record to be kept by an agent or agency for the purpose

of the Act and subject to other statutory requirements, the agent or agency shall preserve

the record for a six year period previous to the most recent fiscal year end of the agent or

agency.

18 An agent or agency shall only withdraw funds from a trust account for the following

reasons:

(

a) a refund of premiums to the insured;

(

b) a payment to the insurer of premiums owed;

(

c) a payment of claims to an insured which have been authorized by the insurer;

(

d) for the purpose of an investment referred to in

Section 1(

c) of these

regulations; or

(

e) a payment of commission owed to the agent or agency.

19 The regulations respecting insurance agents made by the Superintendent of Insurance on

the 11th day of April, 1990, and approved by the Governor in Council by Order in Council

90-628 made the 22nd day of May, 1990, are repealed.

________________________________________________________________

Form I - Trust Account Reconciliation Worksheet

Nova Scotia Insurance Act

TO: The Superintendent of Insurance

Nova Scotia Insurance Act

In accordance with the requirements of Regulations [Sections]14 to 18 inclusive of the

[Regulations Respecting Insurance Agents made under the] Nova Scotia Insurance Act , the

following trust account reconciliation worksheet with respect to the trust account maintained by

_________________________ ( name of agency or agent ) has been prepared and is submitted,

in accordance with Regulation [Section] 13:

Assets:

1 Cash on hand and bank balances

of trust accounts ____________

2 Total premiums receivable ____________

3 Less 1/3 of premiums over 90 days from

insurer's billing date ____________

4 Allowable premiums receivable

([line] 2 minus [line] 3 = [line] 4) _____________

5 Investments held in trust as allowed by

regulations _____________

6 Total assets (Lines 1 + 4 + 5) = _____________

Liabilities:

7 Payables to insurance companies and

other brokers _____________

8 Deferred premiums* _____________

9 Refunds due to insureds _____________

10 Total liabilities (Lines 7 + 8 + 9) _____________

Net trust position (Line 6 minus line 10) _____________

* Deferred premiums are premiums paid towards a policy by the insured for

which the insurance agent or agency has not been billed by the insurer.

The information contained in this report is correct to the best of my knowledge and belief.

_______________________________ _________________________________

Date of application Authorized signature

_________________________________

Name/title (please print)