Regulators Update Life Standards for Insurance Agent Licensing

TORONTO, May 30, 2002 – Canadian consumers will soon
benefit from enhanced standards for life insurance agents. On June 1, participating
Canadian regulators will start to licence the first graduates of the new Life Licence
Qualification Program or LLQP. The LLQP will be accepted as an option to the existing
provincial requirements in all provinces except Quebec where an updated standard already
exists. The new LLQP applies to new agents entering the field.

Jim Hall, Superintendent of Insurance in Saskatchewan and
Chair of the Canadian Council of Insurance Regulators (CCIR) says that the LLQP is a
positive step for the life industry as a whole. “The LLQP is a response to the
changing needs of today’s consumers,” said Mr. Hall. He added, “regulators and
the industry have responded to the changes in the marketplace with this significant
upgrading of the standards for life insurance agents.”

Gerald Matier, Executive Director of the Insurance Council
of British Columbia and Chair of the Canadian Insurance Services Regulatory Organizations
(CISRO) said, “The LLQP benefits both agents and consumers. For agents, it will
harmonize proficiency standards in all provinces except Quebec, and for the consumer it
means that agents will have updated competency skills to provide sound insurance advice to
their clients.” He added, “another advantage for agents is that with harmonized
standards it will be easier to conduct business all over the country.”

Some of the areas covered in the new curriculum include,
life insurance products, disability and accident and sickness products, insurance related
investment products, and consumer needs analysis and risk management. Provincial
government approval for mandatory adoption is required in some jurisdictions.

A backgrounder on the LLQP is attached to this news release.

The Canadian Council of Insurance Regulators (CCIR) is an
inter- jurisdictional association of regulators of insurance. Its mandate is to facilitate
and promote an effective regulatory system in Canada to serve the public interest. CCIR
works co-operatively with other financial services regulators to enhance consumer
protection and to develop and harmonize insurance regulation across jurisdictions.

The Canadian Insurance Services Regulatory Organizations
(CISRO) is an organization of licensing and regulatory authorities for insurance
intermediaries across Canada.


Life Licence Qualification Program (LLQP) Option

  • The LLQP is a standard for prospective life insurance agents
    entering the business that has the following components:

    • a mandatory pre-licensing course provided by commercial
      course providers that meet certain standards (currently there is no requirement for life
      insurance agents to complete a training course);

    • an examination that tests application of knowledge rather
      than the recollection of facts; and

    • a single licence standard, rather than the one, two or three
      licences required in different provinces and territories today.

    • To start, the LLQP course and examination will be accepted
      as alternatives to the existing licensing examinations in participating provinces and
      territories. Quebec already has an updated agent proficiency program and is not
      participating in this initiative.

    • The LLQP was developed by industry subject matter experts
      (agents and company staff) who were assisted by educational and statistical consultants to
      organize the material into a course.

  • The LLQP curriculum covers:

    • Insurance industry overview – Individual life insurance
      products – Individual disability and accident and sickness products – Group insurance
      products – Investment products – Other than insurance – Individual variable insurance
      contracts (segregated funds) – Underwriting, policy issuance and claims – Taxation –
      Retirement – Consumer needs analysis and risk management – Common and contract law and
      statutes – Professional standards.

    • The LLQP is being offered optionally to allow agents to
      receive the benefit of the program while the industry gains some experience with the
      courses and examination. Each jurisdiction will make its own decisions about replacing the
      existing standard with the LLQP. In some jurisdictions, the government will need to
      consider changes to Regulations.

    • The LLQP would enable all agents in Canada to meet the same
      proficiency standards and have the same form of licence. This will facilitate doing
      business across Canada and agents moving between provinces. Moreover, consumers will
      receive the same standard of proficiency and protection, regardless of where they live.

    • Transition options will come into effect when the LLQP is
      mandated. These include a four year transition period when a restricted licence will be
      offered along with the full LLQP licence. The restricted licence will be granted upon
      completion of a designated portion of the course work and associated examination and an
      agreement to abide by certain conditions. This option is available to assist the industry
      to adjust from the current system to the LLQP.

    • Regulators have extended an invitation to the Canadian
      insurance industry to form a committee to provide advice on the impacts of the LLQP and
      any operational concerns related to the LLQP.