Legislation & Policies
Legislation
The Insurance Council of Manitoba (ICM) has developed a Policy on Alleged Cheating on Examinations. This policy applies to any examination taken for consideration of a Manitoba licence. For transparency purposes, the ICM is publicizing this policy as below, in the hopes that this deters exam applicants from attempting to cheat on any examination.
For any alleged cheating on any examination for a Manitoba licence:
The ICM would review video footage of the exam session, whether written at the ICM office or at another location, and would contact the applicant following the steps below:
- The exam applicant would be interviewed (either in-person, over the phone or over a virtual platform) and have an opportunity to provide any information to the ICM they feel is warranted.
- The ICM would advise the applicant that their exam results are under review and should they apply for a licence, their application would be subject to a suitability review at the industry Council table.
- The ICM would advise the applicant that any future exam(s) would be required to be written inperson only at the ICM office, and the in-person proctor would be alerted to keep an eye on the applicant during the re-write for any unusual behaviour.
- The ICM would advise the applicant that any breached exam would be deemed inadmissible – a result of a “Fail” is recorded, and attempt is accounted for.
- The ICM would advise the applicant that if the same behaviour is observed via audit of previous passed exam modules, previous “Pass” results are voided, and attempt is accounted for.
- The incident would be reported to the national organization – Canadian Insurance Services Regulatory Organizations (CISRO).
Multiple instances of alleged cheating may ultimately prohibit the exam applicant from attempting to re-write any examination for a Manitoba licence.
This policy is followed strictly by the ICM staff.
INSURANCE COUNCIL OF MANITOBA
contactus@icm.mb.ca
https://www.icm.mb.ca/
Recently, Council has received inquiries as to whether referral fees are allowable and if there are any limitations to consider.
Referral Fees
The payment of referral fees is allowable, provided that the payment, or any other thing of value, is in no way tied to the placing of a policy or receipt of commission. If the referral fee is contingent upon the placing of a policy or receipt of commission, this is considered a violation of The Insurance Act of Manitoba, section 378(1).
The Insurance Act of Manitoba (the “Act”) indicates that:
May not offer compensation to prospect
378(1)
No insurer licensed under this Act, and no officer, agent or employee of such an insurer, and no insurance agent authorized under this Act, shall, directly or indirectly, pay or allow, or offer or agree to pay or allow, any commission or other compensation or anything of value to any person for acting or attempting or assuming to act as an insurance agent in respect of insurance in the province or for having or claiming or appearing to have any influence or control over the insured or prospect for insurance unless that person holds at the time a subsisting insurance agent’s licence.
No commission if not a holder
378(2)
An agent who, at the time he receives an application for insurance, does not hold a subsisting licence, shall not retain or deduct anything on account of commission from any payment made to him with the application, but shall remit to the insurer the full amount paid to him on account of premium.
There is no limit to the amount of a referral fee; except that per the above, it cannot be tied to the placement of an insurance policy – therefore you need to pay the fee regardless of whether an insurance policy is placed. Further, there is no stipulation that the referral fee is payable to a licensed agent.
Please review section 113(1)(f) of the Act and section 2 of Regulation 220/2014 for information relating to permitted inducements for prospective insureds, which is different than a referral fee.
INSURANCE COUNCIL OF MANITOBA
contactus@icm.mb.ca
https://www.icm.mb.ca/
The Insurance Council of Manitoba (ICM) has developed a Policy on the Sharing of a Commission to provide clarification as to when a commission can be shared and with whom.
The Insurance Act of Manitoba (“Act”) indicates:
No commission if not a holder
378(2)
An agent who, at the time he receives an application for insurance, does not hold a subsisting licence, shall not retain or deduct anything on account of commission from any payment made to him with the application, but shall remit to the insurer the full amount paid to him on account of premium.
Under the commentary of Section 4 – Professionalism, of the Life Insurance and Accident and Sickness Agent’s Code of Conduct, it indicates that an agent must not share compensation earned from the sale of insurance products with any person who does not hold an agent’s licence in the same class of licence.
This means that the ICM’s position is that agents must hold a licence in order to receive compensation in relation to an application for insurance and if they wish to share that compensation with another, that individual must hold a licence in the same licence class.
INSURANCE COUNCIL OF MANITOBA
contactus@icm.mb.ca
https://www.icm.mb.ca/
The Insurance Council of Manitoba (ICM) has developed a Policy on Contests and Inducements and provides five (5) scenarios to provide clarification.
The Insurance Act of Manitoba (“Act”) indicates:
113(1) In this section
“person” means a person engaged in the business of insurance and includes any individual, corporation, association, partnership, reciprocal or inter-insurance exchange, member of the society known as Lloyds, fraternal society, agent, broker and adjuster; (« personne »)
“unfair or deceptive acts or practices in the business of insurance” includes
(f) except as permitted by the regulations, a direct or indirect payment, allowance or gift of, or an offer to directly or indirectly pay, allow or give, money or anything of value to induce a prospective insured to transact insurance with an insurer,
Permitted inducements to prospective insureds, of Regulation 220/2014 indicates that:
(2)
For the purpose of clause (f) of the definition “unfair or deceptive acts or practices in the business of insurance” in subsection 113(1) of the Act, a person is permitted to make a direct or indirect payment, allowance or gift of, or an offer to directly or indirectly pay, allow or give, money or another thing of value to induce a prospective insured to transact insurance with an insurer as long as the fair market value of the payment, allowance, gift or offer to the prospective insured does not exceed $25 per year.
- Scenario #1: An agent/agency advertises a contest which is open to all members of the public, with no condition to obtain a quote, a proposal or purchase insurance.
Council agreed that without any requirement for the consumer to do anything, there is no “transacting insurance” therefore, this is not a violation and is not an inducement.
- Scenario #2: An agent/agency advertises that if a member of the public gets a quote or a proposal, they will be given a “gift” or other thing of value (for example, a gift card). No contest is involved every person getting a quote or proposal gets the gift.
Council discussed the difference between transacting and transaction and determined that obtaining a quote or proposal is transacting insurance as it is the first step in the process of purchasing an insurance policy. Council members further agreed that scenario 2 is an inducement to transact insurance and the gift must have a value of no more than $25. If more than one gift per year is given to a member of the public, then the total value for the year of those gifts to that person must not be more than $25.
- Scenario #3: An agent/agency advertises a contest where only those people who obtain a quote or proposal are able to enter the contest, and the contest’s prize is valued at more than $25. (e.g., big screen tv or a trip).
Council determined in scenario 2 that obtaining a quote was transacting insurance. Council members further discussed whether a ballot to enter a draw had a market value, and if it did, how that value would be determined. Council decided that since it was a “chance” to win, that the ballot would have a nominal value if the number of available ballots were not limited. Council members agreed that scenario 3 would not be a violation.
- Scenario #4: An agent/agency advertises a contest where only those people who purchase insurance are able to enter the contest, and the contest’s prize is valued at more than $25. (e.g., big screen tv or a trip).
Council discussed at length the requirement to purchase a policy to be entered into a draw as there was concern that the value of the ballot was the cost of the policy. However, the ballot itself still has a nominal value and it is still a “chance” to win, therefore scenario 4 would not be a violation.
- Scenario #5: An agent/agency advertises that they will give a donation to charity if a person obtains a quote, a proposal, or purchases insurance.
Council agreed that this scenario be treated the same as scenario 2, where obtaining a quote or proposal is “transacting insurance” and that the donation is an inducement; therefore, the donation would have to be not more than $25 per year.
INSURANCE COUNCIL OF MANITOBA
contactus@icm.mb.ca
https://www.icm.mb.ca/