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Manitoba releases draft regulations proposing restricted agent licences


June 13, 2013   by Canadian Underwriter


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The Manitoba government has released a draft regulation that, if implemented, would allow some types of businesses, such as banks, auto and equipment dealerships, to hold restricted insurance agent licences in the province.

Draft regulation in Manitoba

Those restricted agents, or incidental sellers, would – if the draft regulation becomes law – be exempt from the requirement, under section 369 (1) of the provincial Insurance Act, to hold a licence required to be an agent, broker or adjusters.

The draft regulation was released June 3 and the office of the province’s Superintendent of Financial Institutions-Insurance will take comments until July 2.

Those applying for restricted agent licences would have to have a written recommendation from a carrier with whom they have an agreement to be an authorized incidental seller.

The carriers writing the policies would be required to establish “reasonable policies and procedures” to, among other things, ensure their restricted agents are “knowledgeable and competent” to sell their class of insurance.

The draft regulation proposes to allow restricted agents to sell 14 different classes of insurance, such as cargo, export credit, funeral expense, mortgage, loss or damage of portable electronic devices, personal travel, rented vehicle contents, rented vehicle liability and travel interruption and property loss.

It also proposes to let restricted agents sell four different types of coverage for creditors: disability, life, loss of employment and vehicle inventory.

Another coverage that could be sold by restricted agents would be “equipment,” or boiler and machinery, which would provide coverage for loss or damage to motor vehicles, farm equipment or recreational, marine or construction equipment.

It also proposes 11 categories of companies and individuals who could apply for restricted licences, such as “a person or entity that provides transportation service for people or goods,” as well as auto, watercraft, recreational vehicle, farm implement and construction equipment dealerships.

Other entities that could be restricted agents include deposit-taking institutions (including banks and credit unions), travel agents, mortgage brokers, customs brokers, freight forwarders, vehicle rental firms, funeral directors and portable electronics vendors, among others.

If passed, the regulation would forbid incidental sellers from making their provision or goods or services conditional upon buying either the insurance they are selling or other insurance.

It also proposes several responsibilities for incidental sellers. For example, they would be required , before selling insurance, to provide potential policyholders of notice that their contract is with the carrier and not with the licence holder and that the consumer is not obligated to buy insurance in order to obtain the restricted agent’s goods and services.

The incidental sellers would also have to let consumers know the circumstances under which the policies commence and terminate, as well as the procedures to follow when making a claim.

The draft regulation also proposes to require incidental sellers, “where applicable,” to give consumers notice that they receive “direct or indirect compensation, or a direct or indirect inducement or benefit, from the insurer for soliciting, negotiating or transacting the insurance.”


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