Under the Ontario Insurance Act - Ontario Regulation 347/04 - Insurer's compliance system, S. 12:
(1) Every insurer that authorizes one or more agents to act on behalf of the insurer shall establish and maintain a system that is reasonably designed to ensure that each agent complies with the Act, the regulations, the Authority rules and the agent’s licence. O. Reg. 347/04, s. 12 (1); O. Reg. 113/23, s. 1.
(2) The system referred to in subsection (1) must screen each agent for suitability to carry on business as an agent. O. Reg. 347/04, s. 12 (2).
(3) An insurer shall report to the Chief Executive Officer if it has reasonable grounds to believe that an agent who acts on behalf of the insurer is not suitable to carry on business as an agent. O. Reg. 347/04, s. 12 (3); O. Reg. 145/19, s. 3.
In addition, OSFI B-10 Third-Party Risk Management Guideline makes reference to managing the risks arising from all types of third-party arrangements, including brokers (insurance).
To assist with meeting these expectations, Ethidex has produced Modules setting out regulatory expectations of Agents / Brokers / Brokerages / MGAs for selected Provinces plus for CCIR and CISRO.
These Modules can be used:
to ensure the completeness of the Compliance System established by the carrier or MGA
Update the Compliance System, as changes are made
Map to and ensure completeness of Questionnaires or other attestation mechanisms used
Attest to compliance by agents (through testing)
Design training programs
Examples of the topics covered in the Ethidex Modules for a general insurance broker - Ontario, is as follows:
Registration, Renewal and Reinstatement
Continuing Education
Relationship with the Profession and Regulatory Authorities
Business Policies and Practices
Competence
Integrity
Quality and Manner of Service
Broker Disclosure
Conflicts of Interest
Misconduct
Product Suitability
Marketing and Promotions
Advising Clients
Premium Financing
Maintaining Appropriate Documentation
Outsourcing
Relationships with Other Brokers and Intermediaries
Relationships with Insurers
Confidentiality and Safekeeping of Property
Fees and Financial Obligations
Fraud Prevention
Brokerages: General Obligations
Brokerages: Financial and Trust Obligations
Designated Representative: Eligibility, Registration and Continuing Education
Designated Representative: Direction and Supervision Requirements
Designated Representative: Additional Supervision
If you would like to know more, please reach out.
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