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Saskatchewan regulator warns against use of unlicensed brokers or agents by insurers


November 19, 2009   by Canadian Underwriter


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Saskatchewan’s Superintendent of Insurance has warned insurers marketing insurance and administering insurance contracts in the province with the assistance of unlicensed third-party entities that it intends to “follow-up” with them.
In a letter, the regulator requests that non-compliant insurers remedy this situation as soon as possible.
“We also understand that some insurers may be taking the position that they will wait for a proposed restricted agent licensing regime to come into effect in Saskatchewan before requiring licensing from third parties that are marketing insurance or administering insurance contracts on their behalf,” the letter said.
“This position is not tenable, as the restricted licensing regime does not contemplate licensing for third parties marketing insurance or administering insurance contracts directly on behalf of an insurer.”
The general principle behind the restricted licensing regime is to allow restricted licensing for entities selling insurance that is incidental to the sale of another primary product.
Examples of this type of activity include equipment dealers or car dealers selling warranty insurance respecting the vehicles that are their primary sales product.
On the basis of this principle, only those entities that market insurance that is incidental to a primary product would be eligible for the proposed restricted licensing regime, Saskatchewan’s Superintendent of Insurance said.
“The only way to comply with the Act today is to ensure that all individuals marketing insurance are licensed as an insurance agent, as this restricted licensing regime is only in the proposal stages and is not in effect today.”


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