Mandatory LLQP Implementation effective January 1, 2003
Beginning January 1, 2003, the Level I examination will no longer be recognized in Manitoba for the purpose of qualifying as a new life insurance agent. Completion of the LLQP course and examination – full or restricted – will be the only recognized way for entry level agents to obtain a licence.
Level I Life Insurance Agent Licenses will not be issued to new applicants unless they have passed the examination prior to January 1, 2003.
The Insurance Council of Manitoba and other provincial and territorial regulators have been and will continue to monitor the performance of agents and course providers as the LLQP is introduced. We intend to ensure that the objective of modernizing the proficiency standard to enhance the ability of new agents to meet consumer needs is achieved.
Transition Measures
Existing Level I agents and Level II agents
A licensed agent with Level I qualifications obtained prior to January 1, 2003 will not be affected by this change. He or she will be subject to completing the requirements for a Level II licence within three years from the date that the licence was first issued, provided he or she remains licensed over that period. The Level II examination, modified as required, will continue to be recognized for this purpose.
A licensed agent with Level II qualifications obtained prior to January 1, 2003 will not be affected by this change. He or she will continue to qualify for a licence upon renewal, based on his or her Level II qualifications.
Effect on Level II Licenses
Level II – The LLQP will not have any effect on licensees who hold a Life Insurance Agent Level II Licence on December 31, 2002. These licensees will be granted the new unrestricted licence.
Approved Course Providers
A listing is available on our web-site here: “LLQP Listing of Approved Course Providers“.
Transition from Old System to New System
Licensees who hold a Life Insurance Agent Level 1 Licence on December 31, 2002, will have to further their education prior to the later of January 1, 2003 and the three year anniversary date of the effective date of their initial licence by either completing the IFATC program or successful completion of the Level 2 qualification exam which are offered by CAIFA or by completing the full LLQP. Completion of the Restricted LLQP is not an option.
Licensees who do not further their education prior to the later of January 1, 2003 and the three year anniversary date of the effective date of their initial licence will not be permitted to conduct any further life insurance activity. Should you, at some future date, wish to obtain a licence, you will be subject to the successful completion of the Life Licence Qualification Program (LLQP).
New Entrants after December 31, 2002
After December 31, 2002, individuals may qualify for an unrestricted Life Insurance Agent Licence by completing the LLQP. Individuals may qualify for a restricted licence by completing the Restricted LLQP.
Individuals who decide to complete the Restricted LLQP will qualify for a restricted licence on the following conditions:
- The licensee must enrol in the Residual Portion of the LLQP course within 180 days of being licensed;
- The licensee must complete the Residual Portion of the LLQP course and pass the LLQP exam within two years of being granted a licence or before the four year transition period expires, whichever is the shortest period;
- An application and needs analysis (all sales must now be supported by a needs analysis) must be co-signed by a licensee who has
- completed the full LLQP program or who previously held a Level 2 Licence; and
- has three years experience;
In addition, the sponsoring insurance company and other companies accepting business from a licensee with a restricted licence must provide an undertaking when they sponsor or contract with the licensee that they will maintain records and a system to ensure the above requirements and restrictions are met.
This option will be available to anyone considering becoming a life insurance representative and the decision to select this option is at the sole discretion of each applicant.
LLQP and Accident & Sickness Insurance Licensing
The LLQP includes updated standards to reflect the skills necessary to do accident and sickness insurance business in today’s marketplace. The LLQP pre-training course components dealing with accident and sickness insurance and the LLQP examination to test that material will become mandatory for new applicants for an accident and sickness only licence on January 1, 2003.
Licensees who hold an Accident and Sickness Insurance Agent Licence on December 31, 2002 and have received that licence by passing the current Accident and Sickness Insurance Agent Examination will not be required to complete the new education requirement.
Re-entry to the Life Insurance Field after December 31, 2002
A person who applies for a licence within one year following expiration of a licence previously held will be eligible for the licence previously held.
A person who applies for a licence more than one year after expiration of a licence previously held will be required to complete the new LLQP licensing requirements. For individuals who hold a CLU, and have kept their designation in good standing, the time frame will be extended to three years.
Further information may be obtained by contacting the Insurance Council of Manitoba office at 204-988-6800 or by email contactus@icm.mb.ca.
CCIR – Canadian Council of Insurance Regulators
CISRO – Canadian Insurance Services Regulatory Organization
Toronto – (May 30, 2002) Canadian consumers will soon benefit from enhanced standards for life insurance agents. On June 1, participating Canadian regulators will start to licence the first graduates of the new Life Licence Qualification Program or LLQP. The LLQP will be accepted as an option to the existing provincial requirements in all provinces except Quebec where an updated standard already exists. The new LLQP applies to new agents entering the field.
Jim Hall, Superintendent of Insurance in Saskatchewan and Chair of the Canadian Council of Insurance Regulators (CCIR) says that the LLQP is a positive step for the life industry as a whole. “The LLQP is a response to the changing needs of today’s consumers,” said Mr. Hall. He added, “regulators and the industry have responded to the changes in the marketplace with this significant upgrading of the standards for life insurance agents.”
Gerald Matier, Executive Director of the Insurance Council of British Columbia and Chair of the Canadian Insurance Services Regulatory Organizations (CISRO) said, “The LLQP benefits both agents and consumers. For agents, it will harmonize proficiency standards in all provinces except Quebec, and for the consumer it means that agents will have updated competency skills to provide sound insurance advice to their clients.” He added, “another advantage for agents is that with harmonized standards it will be easier to conduct business all over the country.”
Some of the areas covered in the new curriculum include, life insurance products, disability and accident and sickness products, insurance related investment products, and consumer needs analysis and risk management.
Provincial government approval for mandatory adoption is required in some jurisdictions.
A backgrounder on the LLQP is attached to this news release.
The Canadian Council of Insurance Regulators (CCIR) is an inter-jurisdictional association of regulators of insurance. Its mandate is to facilitate and promote an effective regulatory system in Canada to serve the public interest. CCIR works co-operatively with other financial services regulators to enhance consumer protection and to develop and harmonize insurance regulation across jurisdictions.
The Canadian Insurance Services Regulatory Organizations (CISRO) is an organization of licensing and regulatory authorities for insurance intermediaries across Canada.
Contact:
Grant Swanson
416-590-7120
Chair, Committee to Co-ordinate
Implementation of the LLQP and
Director, Licensing and Compliance Division
Financial Services Commission of Ontario (FSCO)
En Francais:
Rowena McDougall
416-590-7176
Commission des services financiers de l’Ontario (CSFO)
Life Licence Qualification Program (LLQP) Option
CCIR – Canadian Council of Insurance Regulators
CISRO – Canadian Insurance Services Regulatory Organization
The LLQP is a standard for prospective life insurance agents entering the business that has the following components:
- a mandatory pre-licensing course provided by commercial course providers that meet certain standards (currently there is no requirement for life insurance agents to complete a training course);
- an examination that tests application of knowledge rather than the recollection of facts; and
- a single licence standard, rather than the one, two or three licences required in different provinces and territories today.
To start, the LLQP course and examination will be accepted as alternatives to the existing licensing examinations in participating provinces and territories. Quebec already has an updated agent proficiency program and is not participating in this initiative.
The LLQP was developed by industry subject matter experts (agents and company staff) who were assisted by educational and statistical consultants to organize the material into a course.
The LLQP curriculum covers:
- Insurance industry overview
- Individual life insurance products
- Individual disability and accident and sickness products
- Group insurance products
- Investment products
- Other than insurance
- Individual variable insurance contracts (seg funds)
- Underwriting, policy issuance and claims
- Taxation
- Retirement
- Consumer needs analysis and risk management
- Common and contract law and statutes
- Professional standards
The LLQP is being offered optionally to allow agents to receive the benefit of the program while the industry gains some experience with the courses and examination. Each jurisdiction will make its own decisions about replacing the existing standard with the LLQP. In some jurisdictions, the government will need to consider changes to Regulations.
The LLQP would enable all agents in Canada to meet the same proficiency standards and have the same form of licence. This will facilitate doing business across Canada and agents moving between provinces. Moreover, consumers will receive the same standard of proficiency and protection, regardless of where they live.
Transition options will come into effect when the LLQP is mandated. These include a four year transition period when a restricted licence will be offered along with the full LLQP licence. The restricted licence will be granted upon completion of a designated portion of the course work and associated examination and an agreement to abide by certain conditions. This option is available to assist the industry to adjust from the current system to the LLQP.
Regulators have extended an invitation to the Canadian insurance industry to form a committee to provide advice on the impacts of the LLQP and any operational concerns related to the LLQP.
August 2002
New Life Licence Qualification Program
In May 1998, a committee of insurance regulators was established to review and update the licensing standards for life insurance agents to reflect the skills necessary to do business in today’s marketplace. The new standards which have been developed through this process is a comprehensive, single-level life agent educational program known as the Life Licence Qualification Program or LLQP. The LLQP consists of a mandatory education course and a new qualification examination (multiple choice) based on the course.
The LLQP course will be provided commercially and course fees will be set by the course providers. The LLQP examination will be made available for people successfully completing the LLQP course.
The LLQP will become mandatory for new entrants to the life insurance industry in Manitoba on January 1, 2003. As of that date, subject to the approval of new Regulations, we will only be issuing a single level licence, that being a Life Insurance Agent Licence. We will continue to issue licenses in accordance with our current two level licence system up to and including December 31, 2002.
As part of the consultation process with the life insurance industry, it was agreed that a four year transition period would be provided. During this period, it will be possible to take a portion of the LLQP course and write a restricted LLQP examination (the “Restricted LLQP”). This will qualify an individual for a “restricted” Life Insurance Agent Licence.
Effect on Level II Licenses
Level II – The LLQP will not have any effect on licensees who hold a Life Insurance Agent Level II Licence on December 31, 2002. These licensees will be granted the new unrestricted licence.
Course Providers
Effective June 1, 2002, the LLQP course became available in Manitoba as an “optional equivalency” from two course providers. They are:
Canadian Association of Insurance and Financial Advisors
Donna Muirhead
350 Bloor Street East
Toronto, ON M4W 3W8
Tel: 416-444-5251, Ext *251
Web: www.caifa.com
E-mail: dmuirhead@caifa.com
Canadian Securities Institute
Customer Services Representative
121 King Street West, Suite 1550
Toronto, ON M5H 3T9
Toll Free: 866-866-2601
Tel: 416-364-9130
Fax: 416-359-0486
Web: www.csi.ca
E-mail: cic_academic_support@csi.ca
Both providers are making their course available through a distance learning format. Details about the respective courses can be obtained by contacting the organizations directly.
Transition from Old System to New System
Licensees who hold a Life Insurance Agent Level 1 Licence on December 31, 2002, will have to further their education prior to the later of January 1, 2003 and the three year anniversary date of the effective date of their initial licence by either completing the IFATC program or successful completion of the Level 2 qualification exam which are offered by CAIFA or by completing the full LLQP. Completion of the Restricted LLQP is not an option.
Licensees who do not further their education prior to the later of January 1, 2003 and the three year anniversary date of the effective date of their initial licence will not be permitted to conduct any further life insurance activity. Should you, at some future date, wish to obtain a licence, you will be subject to the successful completion of the Life Licence Qualification Program (LLQP).
New Entrants – June 1, 2002 to December 31, 2002
New entrants to the life insurance industry during this period can qualify for a Life Insurance Agent Level 1 Licence under existing legislation by using the existing educational criteria (successful completion of the Level 1 Life Insurance Examination and/or Accident & Sickness Insurance Agent Examination) or by completing the LLQP or the Restricted LLQP.
Licensees which qualified under the existing educational criteria will be subject to the transitional provisions in the above section.
New Entrants After December 31, 2002
After December 31, 2002, individuals may qualify for an unrestricted Life Insurance Agent Licence by completing the LLQP. Individuals may qualify for a restricted licence by completing the Restricted LLQP.
Individuals who decide to complete the Restricted LLQP will qualify for a restricted licence on the following conditions:
- The licensee must enrol in the Residual Portion of the LLQP course within 180 days of being licensed;
- The licensee must complete the Residual Portion of the LLQP course and pass the LLQP exam within two years of being granted a licence or before the four year transition period expires, whichever is the shortest period;
- An application and needs analysis (all sales must now be supported by a needs analysis) must be co-signed by a licensee who has (i) completed the full LLQP program or who previously held a Level 2 Licence; and (ii) has two years experience;
In addition, the sponsoring insurance company and other companies accepting business from a licensee with a restricted licence must provide an undertaking when they sponsor or contract with the licensee that they will maintain records and a system to ensure the above requirements and restrictions are met.
This option will be available to anyone considering becoming a life insurance representative and the decision to select this option is at the sole discretion of each applicant.
LLQP and Accident & Sickness Insurance Licensing
The LLQP includes updated standards to reflect the skills necessary to do accident and sickness insurance business in today’s marketplace. The LLQP pre-training course components dealing with accident and sickness insurance and the LLQP examination to test that material will become mandatory for new applicants for an accident and sickness only licence on January 1, 2003.
We will begin accepting the LLQP course and completion of the LLQP examination relating to accident and sickness as an equivalency to our existing standards on June 1, 2002.
Licensees who hold an Accident and Sickness Insurance Agent Licence on December 31, 2002 and have received that licence by passing the current Accident and Sickness Insurance Agent Examination will not be required to complete the new education requirement.
Re-entry to the Life Insurance Field after December 31, 2002
A person who applies for a licence within one year following expiration of a licence previously held will be eligible for the licence previously held.
A person who applies for a licence more than one year after expiration of a licence previously held will be required to complete the new LLQP licensing requirements. For individuals who hold a CLU, and have kept their designation in good standing, the time frame will be extended to three years.