October 30, 2019 by Greg Meckbach
For Alberta brokerages, the ability to use a Chartered Insurance Professional (CIP) designation won’t necessarily make it easier for brokers to get licensed, but it will probably provide a better learning experience, officials with the Insurance Institute of Canada suggest.
The Alberta General Insurance Council recently approved several Insurance Institute of Canada courses as equivalency for Level 1 through 3 certificates for brokers and agents in the province, the Institute announced Wednesday. For people wanting to be licensed as brokers or agents in Alberta, these equivalencies would provide an alternate to writing the general insurance exam.
“It’s not really about making it easier” to become a licenced broker in Alberta, said Lisa Boniface, vice president of programs for the Insurance Institute of Canada. In Alberta, the failure rate has been high with some levels of licensing, as Boniface observed Friday in an interview.
However, “the [failure] rate is lower when people take courses,” Boniface said, “and it is possible for people to write the exams without having taken a course. They can read materials on their own. But there is evidence that if you take a course you are more likely to pass.”
There are also Canadian Accredited Insurance Broker (CAIB) equivalencies.
With the new Insurance Institute of Canada equivalencies, a person in Alberta can get certified if they prove they have the CIP designation and that they passed the exam within 12 months of submitting an application for licensing with the Alberta Insurance Council.
For General Level 1 certification, you don’t need the full CIP certification. Instead, you could pass two Insurance Institute of Canada courses – C130 and C11 – within the past year. C11 is principles and practice of insurance and C130 is essential skills for the insurance broker and agent.
For General Level 2 certification, you can get an equivalency if you pass both the Insurance Institute of Canada’s C132 (practical issues in broker management) course and C131, which is advanced skills for the insurance broker and agent.
The C131 course includes principles of identifying exposures, analyzing risks, identifying risk management options and implementing a risk management plan. It also provides a brief discussion of various terms, conditions and clauses in commonly-used wording.
The C132 includes marketing, insurance market selection, sales management and staffing, among others. The exam covers professional liability risks, a review of appropriate risk management techniques and the insurance coverage available to protect the professional insurance broker.
All courses in the CIP program have three formats: in-class, virtual (which is online) and independent study.
“We will ensure there is more availability of courses and perhaps flexible availability so that we can meet the needs of people pursuing licensing,” Boniface told Canadian Underwriter Friday.
One Alberta broker who has been concerned about the high failure rates for licensing exams is Thom Young, who founded Lundgren & Young and has since sold it to his children. When Young started his brokerage in the late 1980s, he was recruiting people and trying to train them so they could pass the licensing exams. “I was expecting an 80% or 75% pass rate on a first attempt and we were only getting 40%,” Young told Canadian Underwriter earlier. “I started developing my own programs.”
In Alberta, a “designated representative” at the brokerage has to pass General Level 3, Young noted. But the level 3 testing is based on very complex concepts, and not every agency sells to the oil and gas industry, nor does every agency do bonding and fidelity.
If your brokerage has a satellite office, then a person working there with no supervision needs a Level 2 licence, but the majority of people writing that exam for the first time fail, said Young.