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CONSOLIDATED NEWFOUNDLAND AND LABRADOR REGULATION 989/96

Insurance Adjusters, Agents and Brokers Regulations
under the
Insurance Adjusters, Agents and Brokers Act
(O.C. 96-295)

Amended by:

56/97

CONSOLIDATED NEWFOUNDLAND AND LABRADOR REGULATION 989/96

Insurance Adjusters, Agents and Brokers Regulations
under the
Insurance Adjusters, Agents and Brokers Act
(O.C. 96?295)

Under the authority of section 44 of the Insurance Adjusters, Agents and Brokers Act and the Subordinate Legislation Revision and Consolidation Act , the Lieutenant-Governor in Council makes the following regulations.

REGULATIONS

Analysis


              PART I
LICENSING

       
1.   Short title

       
2.   Definitions

       
3.   Application for licence

       
4.   Application for renewal

       
7.   Notice of termination

       
8.   Work limited

       
9.   Full time work required

     
10.   Non-application

     
11.   Adjusters

     
12.   Examination result

     
13.   Level I licensee

     
14.   Level II licence

     
15.   Courses required

     
16.   Level
III licence

     
17.   Level IV licence

     
18.   Sponsorship limited

     
19.   Non-application

     
20.   Insurance licences

     
21.   Level I licence

     
22.   Level II licence

     
23.   Level II licence issued

     
24.   Level
III licence

     
25.   Sponsored persons limited

     
26.   Representative licence

     
27.   Travel insurance agent

     
28.   Property and casualty insurance

     
29.   Alternative sponsor

     
30.   Level I licence

     
31.   Representation limited

     
32.   Courses required

     
33.   Level
III licence

     
34.   Sponsorship limited

     
35.   Declaration

     
36.   Liability coverage

     
37.   Prohibitions on policy

     
38.   Liability

     
39.   Licence renewal

     
40.   Conditional licence

     
41.   Civil proceedings

     
42.   Investigation

     
43.   Violations by licensee

     
44.   Sponsor's licence

     
45.   Licences to corporate bodies

     
46.   Licence expiration

     
47.   Variance of time period

     
48.   Multiple attempts

     
49.   Return required by Act

     
50.   Presumption

     
51.   Transition

     
52.   Presumption of licensure

     
53.   Experience of applicant

     
54.   Licence levels

     
55.   Licences terminated

     
56.   Application under s.59

              PART II
TRUST ACCOUNTS

     
57.   Trust accounts

     
58.   Trust funds

     
59.   Trust funds

     
60.   Insurer interest

     
61.   Beneficiary interest

     
62.   Withdrawal of funds

     
63.   Trust accounts

     
64.   Accounting records

     
65.   Accounting records

     
66.   Access to records

     
67.   Audited statement

     
68.   Additional statement

              PART III
REPLACEMENT OF CONTRACTS OF
LIFE INSURANCE

     
69.   Definition

     
70.   Inducement prohibited

     
71.   Replacement detrimental

     
72.   Amendment or replacement required

     
73.   Statement of intention

     
74.   Replacement insurance

     
75.   Insurer's duties

     
76.   Required information

     
77.   Withdrawal of application

              PART IV
REPEAL

     
78.   Repeal


PART I
LICENSING

Short title

        1. These regulations may be cited as the Insurance Adjusters, Agents and Brokers Regulations.

48/91 s1

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Definitions

        2. In these regulations

             (a)  "Act" means the Insurance Adjusters, Agents and Brokers Act ;

             (b)  "A.I.I.C." means Associate of the Insurance Institute of Canada;

             (c)  "Level I" means a licence which may be held by a student; and

             (d)  "minister" means the minister appointed under the Executive Council Act to administer this Act.

48/91 s2

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Application for licence

        3. (1) Application for licence as an adjustment company, agent, broker or special insurance broker shall be submitted to the superintendent in accordance with the form prescribed by the minister.

             (2)  Application for licence as an adjuster or representative shall be submitted to the superintendent in accordance with the form prescribed by the minister.

48/91 s3

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Application for renewal

        4. Notification of transfer of services shall be submitted on a form prescribed by the superintendent.

48/91 s4; 56/97 s1

        5. [Rep. by 56/97 s2]

56/97 s2

        6. [Rep. by 56/97 s2]

56/97 s2

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Notice of termination

        7. A sponsor shall provide the superintendent with notice of termination in accordance with the form prescribed by the minister within 2 working days following dismissal, resignation or a termination of a sponsored licensee.

48/91 s8

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Work limited

        8. A person licensed under the Act shall work only in the field of insurance for which a licence is issued.

48/91 s9

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Full time work required

        9. A person holding an adjuster or representative Level I licence shall work full time as an adjuster or representative following issue of the licence.

48/91 s10

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Non-application

     10. Section 9 does not apply to a representative who works in an area of the province that, in the opinion of the superintendent, does not have sufficient population to support a full time representative.

48/91 s11

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Adjusters

     11. Licences may be issued in the following categories:

             (a)  Adjuster Level I;

             (b)  Adjuster Level II;

             (c)  Adjuster Level III ;

             (d)  Adjuster Level IV; and

             (e)  Adjustment Company,

provided that applicants for Level I, Level II or Level III licences are sponsored by the holder of an adjuster Level IV licence.

48/91 s12

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Examination result

     12. An adjuster Level I licence may be issued to a person who has achieved at least 75% success on an adjuster licence examination prescribed by the superintendent, or has equivalent qualifications acceptable to the superintendent.

48/91 s13

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Level I licensee

     13. A person holding an adjuster Level I licence

             (a)  shall work only on behalf of his or her sponsor or the sponsor's employer; and

             (b)  during the first year following issue of the initial licence may assess claims or engage in negotiation of an insurance settlement only under supervision of a person holding an adjuster Level III or IV licence, who shall review and countersign a claim report or settlement offer submitted by the Level I licensee.

48/91 s14

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Level II licence

     14. A person holding an adjuster Level I licence shall complete the requirements to qualify for an adjuster Level II licence and apply for a Level II licence within the 3 year period immediately following issue of the initial adjuster Level I licence, and failure to comply with this section shall be cause for suspension, revocation or cancellation of the Level I licence.

48/91 s15; 56/97 s3

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Courses required

     15. An adjuster Level II licence may be issued to a person who has held an adjuster Level I licence for at least 2 years and who has successfully completed all of the following courses of the Insurance Institute of Canada:

             (a)  C11 - Principles and Practices of Insurance;

             (b)  C12 - Insurance on Property;

             (c)  C14 - Automobile Insurance; and

             (d)  C17 - Claims 1, or

has equivalent qualifications acceptable to the superintendent.

48/91 s16

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Level III licence

     16. An adjuster Level III licence may be issued to a person who has held an adjuster Level II licence for at least one year and who has successfully completed, within the 3 year period immediately preceding application, all of the following courses of the Insurance Institute of Canada:

             (a)  C13 - Insurance Against Liability;

             (b)  C33 - Insurance on Property - Part II;

             (c)  C46 - Claims II; and

             (d)  C43 - Casualty Covers, or

has equivalent qualifications acceptable to the superintendent.

48/91 s17

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Level IV licence

     17. An adjuster Level IV licence may be issued to a person who has held an adjuster Level III licence for at least one year and who has successfully completed, within the 7 year period immediately preceding application, the A.I.I.C. program of the Insurance Institute of Canada, including all of the following courses:

             (a)  C32 - Bodily Injury Claims;

             (b)  C16 - Insurance Organization, Accounts and Finance; and

             (c)  another 2 optional courses, or

has equivalent qualifications acceptable to the superintendent.

48/91 s18

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Sponsorship limited

     18. A person holding an adjuster Level IV licence shall not sponsor more than 5 persons holding adjuster Level I licences.

48/91 s19

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Non-application

     19. The provisions of the Act and these regulations do not apply to a person adjusting or dealing solely with claims

             (a)  under a contract of aircraft insurance;

             (b)  under a contract of marine insurance;

             (c)  under a contract of life insurance;

             (d)  under a contract of accident insurance, sickness insurance or accident and sickness insurance;

             (e)  under a contract of automobile insurance, provided that total property damage incurred by all parties does not exceed $1,500 and the claim does not involve

                      (i)  bodily injury,

                     (ii)  salvage,

                    (iii)  subrogation,

                    (iv)  fraud,

                     (v)  dispute as to coverage,

                    (vi)  dispute as to liability,

                   (vii)  total loss of a vehicle, or

                  (viii)  breach of a statute;

              (f)  under a contract of property or liability insurance, provided that total damage incurred by all parties does not exceed $1,500 and the claim does not involve

                      (i)  bodily injury,

                     (ii)  salvage,

                    (iii)  subrogation,

                    (iv)  fraud,

                     (v)  dispute as to coverage,

                    (vi)  dispute as to liability, or

                   (vii)  breach of a statute; and

             (g)  arising as a result of a catastrophic event where, in the opinion of the superintendent, the number of adjusters licensed under the Act does not facilitate the timely adjusting of losses arising from the catastrophe.

48/91 s20

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Insurance licences

     20. Licences may be issued in the following categories, provided that the applicant is sponsored by a life or accident and sickness insurer licensed under theInsurance Companies Act:

             (a)  Life Insurance Representative Level I;

             (b)  Life Insurance Representative Level II;

             (c)  Life Insurance Representative Level III ;

             (d)  Life Insurance Agent;

             (e)  Life Insurance Broker;

              (f)  Accident and Sickness Insurance Representative;

             (g)  Accident and Sickness Insurance Agent;

             (h)  Accident and Sickness Insurance Broker; and

              (i)  Travel Insurance Agent.

48/91 s21

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Level I licence

     21. A life insurance representative Level I licence may be issued to a person who has achieved at least 75% success on both a life insurance representative licence examination and an accident and sickness insurance representative licence examination prescribed by the superintendent, or has equivalent qualifications acceptable to the superintendent.

48/91 s22

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Level II licence

     22. A person holding a life insurance representative Level I licence shall complete the requirements prescribed to qualify for a life insurance representative Level II licence and apply for a Level II licence within the 3 year period immediately following issue of the initial life insurance representative Level I licence, and failure to comply with this section shall be cause for suspension, revocation or cancellation of the Level I licence.

48/91 s23; 56/97 s4

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Level II licence issued

     23. A life insurance representative Level II licence may be issued to a person who has held a life insurance representative Level I licence for at least one year and who has successfully completed the Life Underwriters Association Training Courses I and II, or has equivalent qualifications acceptable to the superintendent.

48/91 s24

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Level III licence

     24. A life insurance representative Level III licence may be issued to a person who has held a life insurance representative Level II licence for at least one year and who has successfully completed the courses and examinations required for designation as a chartered life underwriter, or has equivalent qualifications acceptable to the superintendent.

48/91 s25

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Sponsored persons limited

     25. A sponsoring life insurer shall not sponsor more than 5 life insurance representative Level I licensees for each life insurance representative Level II or III licensee sponsored by the sponsor.

48/91 s26

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Representative licence

     26. An accident and sickness insurance representative licence may be issued to a person who has achieved at least 75% success on an accident and sickness insurance representative licence examination prescribed by the superintendent, or has equivalent qualifications acceptable to the superintendent.

48/91 s27

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Travel insurance agent

     27. A natural person who represents a travel insurance agent may act under authority of the agent's licence.

48/91 s28

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Property and casualty insurance

     28. Licences may be issued in the following categories, provided that the applicant is sponsored by a property and casualty insurer licensed under the Insurance Companies Act:

             (a)  Property and Casualty Insurance Representative Level I;

             (b)  Property and Casualty Insurance Representative Level II;

             (c)  Property and Casualty Insurance Representative Level III ;

             (d)  Property and Casualty Insurance Agent;

             (e)  Property and Casualty Insurance Broker; and

              (f)  Special Insurance Broker.

48/91 s29

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Alternative sponsor

     29. An applicant for a property and casualty insurance representative Level I, II or III licence may be sponsored by a licensed property and casualty insurance agent or broker as an alternative to the sponsor required in section 28.

48/91 s30

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Level I licence

     30. A property and casualty insurance representative Level I licence may be issued to a person who has

             (a)  achieved at least 75% success on a property and casualty insurance representative licence examination prescribed by the superintendent; or

             (b)  successfully completed the "Fundamentals of Insurance" course of the Insurance Brokers Association of Canada, or

has equivalent qualifications acceptable to the superintendent.

48/91 s31

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Representation limited

     31. A person holding a property and casualty insurance representative Level I licence shall represent only his or her sponsor.

48/91 s32

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Courses required

     32. A property and casualty insurance representative Level II licence may be issued to a person who has held a property and casualty representative Level I licence for at least one year and who has successfully completed within the 4 year period immediately preceding the application

             (a)  the following courses of the Insurance Institute of Canada:

                      (i)  C11 - Principles and Practices of Insurance,

                     (ii)  C71 - Personal Lines Production,

                    (iii)  C17 - Claims 1,

                    (iv)  C14 - Automobile Insurance,

                     (v)  C12 - Insurance on Property, and

                    (vi)  C72 - Commercial Lines Production 1; or

             (b)  Parts 1 and 2 of the Canadian Accredited Insurance Broker designation program, or

has equivalent qualifications acceptable to the superintendent.

48/91 s33

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Level III licence

     33. A property and casualty insurance representative Level III licence may be issued to a person who has held a property and casualty insurance representative Level II licence for at least one year and who has successfully completed the A.I.I.C. program of the Insurance Institute of Canada or the Canadian Accredited Insurance Broker designation program, or has equivalent qualifications acceptable to the superintendent.

48/91 s34

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Sponsorship limited

     34. A sponsor shall not sponsor more than 5 property and casualty insurance representative Level I licensees for each property and casualty insurance representative Level II or Level III licensee sponsored by the sponsor.

48/91 s35

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Declaration

     35. The declaration required from a special insurance broker in subsection 25(4) of the Act shall be in a form prescribed by the superintendent.

48/91 s36

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Liability coverage

     36. (1) A licence shall not be issued except upon proof satisfactory to the superintendent that the applicant will be covered for the duration of the licence by a policy of

             (a)  liability insurance for an amount of at least $1 million, or $1.5 million in the case of a special insurance broker under section 24 of the Act, in respect of an occurrence with regard to negligent acts, errors or omissions with extended coverage for loss resulting from fraudulent acts pertaining to the licensed activity; and

             (b)  fidelity insurance against losses arising from dishonesty of employees, a proprietor, partners, directors, officers or shareholders for an amount of at least $100,000 in respect of an occurrence.

             (2)  The policies of insurance referred to in this section shall be in a form acceptable to the superintendent and shall be issued by an underwriting insurer acceptable to the superintendent.

             (3)  A licence expires on the date of the effective cancellation or non-renewal of an insurance policy unless before that date the insurance is replaced in compliance with subsection (1).

135/93 s1; 56/97 s5

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Prohibitions on policy

     37. A policy of insurance specified in section 36

             (a)  shall not contain a deductible clause in an amount greater than $10,000 for each occurrence, unless the licensee files proof of financial responsibility acceptable to the superintendent; or

             (b)  shall not be cancelled, terminated or renewed and a person shall not be deleted from a group policy, except upon 60 days' notice by registered mail from the underwriting insurer or the licensee to the superintendent, provided that the superintendent may waive the period of 60 days' notice or a part of it following proof satisfactory to the superintendent that the licensee has ceased licensed activity or is covered by another policy of insurance acceptable to the superintendent.

48/91 s38; 135/93 s2

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Liability

     38. An underwriting insurer or an insured who issues, or who permits to be cancelled, terminated or not renewed, or who deletes a licensee from a policy of insurance in violation of section 37 shall be liable together with the licensee concerned for all damages arising as a result of that violation.

48/91 s39; 135/93 s3

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Licence renewal

     39. Upon becoming aware that a licensee has been charged with

             (a)  an offence under the Criminal Code; or

             (b)  a quasi-criminal offence under another Act of the Parliament of Canada or a provincial legislature,

the superintendent may cause an investigation to be made into the matter and after the licensee has been given an opportunity to be heard, the superintendent may suspend, revoke, or place conditions upon the licensee's licence.

48/91 s40; 56/97 s6

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Conditional licence

     40. Upon becoming aware that a licensee has been charged with

             (a)  an offence under the Criminal Code relating to a licensed activity;

             (b)  a quasi-criminal offence under another Act of the Parliament of Canada or a provincial legislature relating to a licensed activity; or

             (c)  an offence under the Act,

the superintendent shall cause an investigation to be made into the matter and after the licensee has been given an opportunity to be heard, the superintendent may suspend, revoke, or place conditions upon the licensee's licence.

48/91 s41; 56/97 s6

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Civil proceedings

     41. Upon becoming aware that civil proceedings have been commenced in a court of competent jurisdiction against a licensee in a matter arising from a licensed activity, the superintendent may cause an investigation to be made into the matter and after the licensee has been given an opportunity to be heard, the superintendent may suspend, revoke, or place conditions upon the licensee's licence.

48/91 s42; 56/97 s6

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Investigation

     42. The superintendent may commence or re-open an investigation or hearing at any time.

48/91 s43

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Violations by licensee

     43. The superintendent may suspend, revoke, or place conditions upon a licence if, after an investigation and after the licensee has been given an opportunity to be heard, the superintendent has evidence satisfactory to him or her that the licensee

             (a)  may have engaged in misrepresentation or in a fraudulent, deceitful or dishonest act;

             (b)  has made a material mistake in the application for a licence;

             (c)  has violated the provisions of

                      (i)  theInsurance Companies Act,

                     (ii)  theInsurance Contracts Act,

                    (iii)  the Life Insurance Act,

                    (iv)  the Fire Insurance Act,

                     (v)  theAccident and Sickness Insurance Act,

                    (vi)  theAutomobile Insurance Act,

                   (vii)  theTrade Practices Act,

                  (viii)  the Act,

                    (ix)  the Insurance Acts of Canada or of a province to which the licensee is subject, or

                     (x)  a rule or regulation made under the authority of those Acts;

             (d)  has unreasonably failed to make payment of money due to a person in relation to the licensed activity;

             (e)  has placed insurance with insurers other than those licensed to transact business in the province, unless that insurance was placed in accordance with section 24 of the Act; or

              (f)  has demonstrated incompetence or untrustworthiness in relation to the licensed activity.

48/91 s44; 56/97 s6

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Sponsor's licence

     44. When a sponsor's licence is suspended, revoked or cancelled, the licences of all persons sponsored by that sponsor are suspended until the sponsor's licence is restored or until a transfer of services to another sponsor is approved by the superintendent.

48/91 s45; 56/97 s7

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Licences to corporate bodies

     45. A licence may be issued to a body corporate or partnership only where the superintendent is satisfied that

             (a)  at least one of the persons responsible for the regular operation of the applicant

                      (i)  holds the highest level of licence in the field of insurance in which the applicant proposes to engage, or

                     (ii)  has equivalent qualifications acceptable to the superintendent; and

             (b)  financial resources sufficient to fund the operation of the applicant are available.

48/91 s46

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Licence expiration

     46. A natural person who applies for a licence

             (a)  within 2 years following the expiration of a licence issued under the Act shall be eligible for the level of licence previously held;

             (b)  more than 2 years following expiration of a licence issued under the Act shall be required to successfully complete the qualifications prescribed in section 12, 21, 26 or 30 and the superintendent may then issue the level of licence which the superintendent considers appropriate.

48/91 s47

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Variance of time period

     47. The superintendent may, in his or her absolute discretion, vary a time period stated in these regulations, upon written application stating reasons why a variation is requested, and the superintendent may require that information, assurances or hearings that he or she considers appropriate.

48/91 s48

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Multiple attempts

     48. A person who does not achieve at least 75% in an examination prescribed by the superintendent in section 12, 21, 26 or 30 shall be permitted to register for another examination attempt after the expiry of the following periods of time:

             (a)  second attempt - one month after the first attempt;

             (b)  third attempt - one month after the second attempt; and

             (c)  subsequent attempts - 6 months after the previous attempt.

48/91 s52

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Return required by Act

     49. The return required by section 34 of the Act shall be in the form of a letter signed by an officer or director of the insurer listing the names, licence numbers and addresses of all persons required to be identified.

48/91 s53

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Presumption

     50. For the purpose of subsection 38(2) of the Act, a person who has procured insurance contracts on behalf of a fraternal or mutual benefit society in the preceding year in an amount of insurance in excess of $100,000 shall be presumed to be devoting or intending to devote more than 50% of his or her time to the solicitation or procurement of insurance contracts for the society.

48/91 s54

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Transition

     51. A person who holds a valid licence issued under the Life and Accident Insurance Agents Licensing Act or the Insurance Adjusters Act on the date the Act comes into force is considered to hold that licence under the Act and applications for renewal shall be made in accordance with these regulations.

48/91 s55

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Presumption of licensure

     52. A person whose employment does not require that person to hold a licence under the Life and Accident Insurance Agents Licensing Act or the Insurance Adjusters Act on the date the Act comes into force but which does require that person to hold a licence under the Act is considered to hold that licence from the date the Act comes into force until the date a licence is issued or refused under the Act, provided that application for licence is made within one month following the date the Act comes into force.

48/91 s56

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Experience of applicant

     53. A person referred to in section 51 or 52 who applies for a licence or renewal under the Act shall be eligible for the level of licence which corresponds with the years of experience indicated in the lists that follow:

             (a)  insurance adjusting field

                      (i)  Adjuster Level I - under 3 years,

                     (ii)  Adjuster Level II - 3 years to under 5 years,

                    (iii)  Adjuster Level III - 5 years to under 7 years, and

                    (iv)  Adjuster Level IV - 7 years and over;

             (b)  life insurance field

                      (i)  Life Insurance Representative Level I - under 3 years,

                     (ii)  Life Insurance Representative Level II - 3 years to under 6 years, and

                    (iii)  Life Insurance Representative Level III - 6 years and over; and

             (c)  property and casualty insurance field

                      (i)  Property and Casualty Representative Level I - under 3 years,

                     (ii)  Property and Casualty Representative Level II - 3 years to under 6 years, and

                    (iii)  Property and Casualty Representative Level III - 6 years and over.

48/91 s57

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Licence levels

     54. A natural person who is issued a licence under section 53 may be issued higher levels of licence upon application and proof satisfactory to the superintendent that he or she has acquired the corresponding years of experience stated in section 53, notwithstanding that the educational requirements prescribed in these regulations for those subsequent licences may not be met.

48/91 s58

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Licences terminated

     55. A natural person who applies for a licence under the Act within 2 years after termination of

             (a)  a licence held under the Life and Accident Insurance Agents Licensing Act or the Insurance Adjusters Act; or

             (b)  employment which did not require a licence under the Life and Accident Insurance Agents Licensing Act or the Insurance Adjusters Act but which does require a licence under the Act,

shall be eligible for the level of licence prescribed in section 53 and may take benefit of the provision of section 54, provided that that person held the original licence or employment for a minimum of 3 years immediately before termination of the original licence or employment.

48/91 s59

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Application under s.59

     56. A natural person who applies for a licence under the Act more than 2 years after termination of a licence or employment referred to in section 55 shall be required to successfully complete the qualifications prescribed in section 12, 21, 26 or 30 whereupon the superintendent may issue the level of licence that the superintendent considers appropriate.

48/91 s60

PART II
TRUST ACCOUNTS

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Trust accounts

     57. An agent, broker and special insurance broker shall maintain a trust account that may be interest bearing at a chartered bank, trust company or credit union in the province to be used solely for the discharge of trust obligations under the Act.

48/91 s61

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Trust funds

     58. All trust funds received by an agent, broker or special insurance broker, whether by cash, cheque or otherwise, shall be held apart from his or her own money or estate and shall be deposited in the trust account referred to in section 57 or remitted to the beneficiary not later than 3 business days following the day on which the funds are received.

48/91 s62

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Trust funds

     59. (1) A representative shall not maintain a trust account, unless authorized to do so by the superintendent, but shall hold all trust funds received separate and apart from his or her own money or estate and shall remit all trust funds to the beneficiary not later than 3 business days following the day on which the funds are received.

             (2)  A representative authorized by the superintendent to maintain a trust account shall do so in accordance with these regulations.

48/91 s63

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Insurer interest

     60. Interest earned on funds held in trust for an insurer shall be the property of the agent, broker, special insurance broker or representative maintaining the account, unless otherwise agreed with the insurer.

48/91 s64

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Beneficiary interest

     61. Interest earned on funds held in trust for a beneficiary other than an insurer shall be the property of and paid to that beneficiary with the trust funds.

48/91 s65

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Withdrawal of funds

     62. Funds shall not be withdrawn from a trust account except for payment of

             (a)  a premium;

             (b)  a refund or an adjustment;

             (c)  a commission or a deduction to which an agent, broker, special insurance broker or representative is entitled by written consent of the insurer;

             (d)  interest and service charges;

             (e)  taxes owing on premiums;

              (f)  funds deposited in error; and

             (g)  another disbursement authorized in writing by the superintendent.

48/91 s66

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Trust accounts

     63. A person who maintains a trust account shall maintain current trust account records and prepare a monthly reconciliation of all trust accounts showing trust assets and liabilities and shall keep appropriate documents to verify trust account transactions.

48/91 s67

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Accounting records

     64. An agent, broker, special insurance broker and representative, other than a representative who is an employee of them or an insurer, shall maintain current accounting records showing the financial affairs of their business and the other information that the superintendent may require, and shall keep appropriate documents to verify the accounting records.

48/91 s68

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Accounting records

     65. All accounting records and financial statements maintained under the Act shall be prepared in accordance with generally accepted accounting principles.

48/91 s69

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Access to records

     66. The superintendent or his or her representative shall have access at all reasonable times to all accounting records, financial statements and documents required to be maintained and kept by the Act.

48/91 s70

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Audited statement

     67. An agent, broker, special insurance broker and representative, other than a representative who is an employee of them or an insurer, shall provide the superintendent with a current audited financial statement within 60 days after written request for it.

48/91 s71

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Additional statement

     68. In addition to the requirements of section 33 of the Act, the superintendent may require an agent, broker, special insurance broker or representative to file a statement of financial affairs in a form prescribed by the superintendent at the times that the superintendent considers necessary.

48/91 s72

PART III
REPLACEMENT OF CONTRACTS OF
LIFE INSURANCE

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Definition

     69. In this Part, "replacement of a contract of life insurance" means a transaction in which a contract of life insurance is or will be purchased from an insurer and an existing contract of life insurance is or will be

             (a)  rescinded, lapsed or surrendered;

             (b)  changed to paid-up insurance;

             (c)  continued as extended term insurance;

             (d)  continued under automatic premium loan;

             (e)  changed in a manner that results in a reduction of benefits;

              (f)  changed so that more than 50% of the cash value is or will be released; or

             (g)  subject to borrowing in excess of 50% of the cash value, either in a single loan or under a schedule over time,

but does not include a transaction in which

             (h)  a new contract of life insurance is made with an insurer with whom the applicant has an existing contract of life insurance in furtherance of a contractual privilege exercised by the policyholder;

              (i)  a contract of life insurance is replaced by an annuity; or

              (j)  a contract of life insurance is replaced by group insurance,

provided that the superintendent may in his or her discretion determine whether a transaction is a replacement of a contract of life insurance.

48/91 s73

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Inducement prohibited

     70. A person shall not directly or indirectly induce or attempt to induce a policy owner to replace an existing contract of life insurance with a new contract of life insurance where the replacement may be detrimental to the interests of the policy owner.

48/91 s74

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Replacement detrimental

     71. An agent, broker or representative who becomes aware that replacement of a contract of life insurance may be detrimental to the interests of a policy owner shall explain the consequences of replacement and make every reasonable effort to encourage the policy owner to maintain the existing contract of life insurance.

48/91 s75

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Amendment or replacement required

     72. An agent, broker or representative who becomes aware that an existing contract of life insurance should be amended or replaced by another contract of life insurance shall request the insurer which issued the existing contract to amend or replace it in a manner that will ensure that all values, credits or privileges in the existing contract are retained or transferred to a new contract.

48/91 s76

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Statement of intention

     73. Every application for a contract of life insurance shall include a statement signed by the applicant stating whether or not replacement of a contract of life insurance is intended.

48/91 s77

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Replacement insurance

     74. When replacement of a contract of life insurance is intended or will result from a transaction, the selling agent, broker or representative shall

             (a)  before accepting an application for a replacement contract of insurance

                      (i)  prepare a list of all life insurance contracts to be replaced,

                     (ii)  prepare, sign, review and leave with the applicant a disclosure statement in the form prescribed by the superintendent pertaining to each contract of life insurance intended to be replaced, and

                    (iii)  obtain on each completed disclosure statement referred to in subparagraph (ii) the signature of the applicant and the signature of the life insured if other than the applicant attesting to the receipt of the completed disclosure statement;

             (b)  within 3 working days of receiving application for a replacement contract of insurance, forward a copy of the signed disclosure statement to the local office of every insurer whose contract is to be replaced;

             (c)  forward with each application for a replacement contract of life insurance

                      (i)  a copy of the signed disclosure statement,

                     (ii)  a copy of all written proposals presented to the applicant by the agent, broker or representative, and

                    (iii)  a copy of all written directions received from the applicant; and

             (d)  deliver each replacement contract of life insurance to the applicant as soon as possible after receiving it from the insurer, unless contrary written instructions have been received from the applicant.

48/91 s78

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Insurer's duties

     75. Upon receiving an application disclosing that there will be replacement of a contract of life insurance, every insurer shall

             (a)  ensure that a completed copy of the disclosure statement is filed with the application;

             (b)  maintain in its principal office or place of business in Canada for at least 3 years copies of all material forwarded by the agent, broker or representative under these regulations; and

             (c)  issue the new contract of life insurance as soon as possible following approval of the application.

48/91 s79

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Required information

     76. Every insurer shall provide the information necessary to complete the disclosure statement to other insurers or their agents, brokers or representatives upon request enclosing written authorization of the client.

48/91 s80

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Withdrawal of application

     77. (1) An applicant for replacement of a contract of life insurance may withdraw the application by written notice to the replacement insurer or an agent, broker or representative of that insurer within 20 days of receiving delivery of the disclosure statement.

             (2)  When an applicant withdraws an application for replacement of a contract of life insurance, the replacement insurer shall refund a premium deposit or other payment made by the applicant in respect of the proposed replacement, provided that when the application is for a single premium life insurance policy or a stated group of assets, the refund shall be adjusted to reflect the change in the capital value of the contract.

48/91 s81

PART IV
REPEAL

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Repeal

      78. The Insurance Adjusters, Agents and Brokers Regulations, 1991, Newfoundland Regulation 48/91, are repealed.