Why ‘salesperson’ will no longer be defined in this insurance law

The Ontario government plans to make several changes to the Insurance Act, including the removal of the definition of “salesperson” from the law.

Legislation was tabled Monday by Prabmeet Singh Sarkaria, the associate minister of small business and red tape reduction and Progressive Conservative MPP for Brampton South.

As it stands, salesperson is someone other than a licenced broker or agent who is employed by a brokerage or agency to solicit insurance or transact an application for a policy of insurance. A salesperson could also be employed to act in the negotiation of transacting or renewing insurance, or who collects and receives premiums on behalf of the employer.

In order to be defined as a salesperson, the employee would have to make their money from a stated salary that is not supplemented by commission or bonus. It would not include someone “engaged solely in office duties for an agent or broker.”

That definition will be removed if Bill 132 is passed into law.

“This definition does not appear elsewhere in the act and is only in the definition section,” a Ministry of Finance spokesperson told Canadian Underwriter. “Therefore it is not required in the act, as it does not inform the meaning of the act.”

Definitions in legislation are meant to help the reader understand the legislation, the spokesperson added.

Bill 132 proposes a plethora of changes to various Ontario laws.

Among them are changes to the Insurance Act that would require notices – which currently must be published in the Ontario Gazette – to instead be published on the website of the Financial Services Regulatory Authority. Among them are notices that the licence of an insurer is suspended or cancelled.