On December 13th and 14th, 2022, the New Brunswick Financial and Consumer Services Commission (“FCNB”), released guidance (the “December Guidance”) dealing with the implementation of Rule INS-001 – Insurance Intermediaries Licensing and Obligations (“Rule INS-001”) and Rule INS-002 Insurance Fees (“Rule INS-002”, and together with Rule INS-001, the “New Rules”). The New Rules come into force on February 1, 2023 and will impact all insurance intermediaries conducting business in New Brunswick. Specifically, the New Rules create new classes of individual agent, broker, adjuster, and corporate insurance intermediary licenses, and will replace the following existing regulations under the Insurance Act (New Brunswick) (the “Act”):
- Adjusters Regulation (Regulation 2009-52);
- Agents and Brokers Regulation (Regulation 95-5);
- Licence and Examination Fees for Agents and Brokers Regulation (Regulation 83-197);
- Licence Revival Fee Regulation (Regulation 84-73); and
- Life Insurance Agent Licensing Regulation (Regulation 2003-36).
(collectively, the “Current Regulations”)
This article summarizes the December Guidance and highlights key actions that may be required from insurance intermediaries conducting business in New Brunswick.
I. Updates to Classes of Individual Intermediary Licences for Existing Licensees
The FCNB noted that most insurance intermediary licence types that exist under the Current Regulations of the Act will be automatically updated in its licensing system on the effective date of the New Rules (February 1, 2023). All existing licensees will need to download and print a copy of their respective new FCNB licences from the FCNB online licensing portal once their respective licenses have transitioned.
Although most licences will be automatically updated in the FCNB’s system (as noted above), the FCNB has noted that action is required from certain individual licensees, depending on the class of licence held. The FCNB’s guidance on what, if any, action is required is summarized in the below tables, and such summaries include reference to the current classes of individual intermediary licensing (under the Current Regulations) and the new classes of individual intermediary licensing under the New Rules.
When reviewing the new classes of licences listed below, it is important to note that all “General Insurance licences” are now “agent” licences. However, an insurance “agent” licensee may still hold themselves out as a “broker” if the “agent” is party to two or more subsisting agency contracts with different insurers, and none of such agency contracts require the agent or agency to exclusively sell insurance offered by one insurer.
a) Life Insurance Agent Licenses
Licensing Class Under Current Regulations Licensing Class Under New Rules Action Required by Individual Licensees Life agent licence Life insurance agent licence No action required by licensee Life, accident and sickness agent licence Life insurance agent licence No action required by licensee Accident and sickness agent licence Accident and sickness insurance agent licence No action required by licensee
b) Other than Life Insurance Agent or Broker Licences
Licensing Class Under Current Regulations Licensing Class Under New Rules Action Required by Individual Licensees Agent licence, class I Level 1 general insurance agent licence No action required by licensee Agent licence, class II Level 1, 2 or 3 general insurance agent licence Licensee to request a general insurance agent licence type upon renewal, if not contacted by FCNB prior to expiry date Broker licence, class I Level 1 general insurance agent licence No action required by licensee Broker licence, class II Level 1 general insurance agent licence No action required by licensee Broker licence, class III Level 2 general insurance agent licence No action required by licensee Broker licence, class IV Level 3 general insurance agent licence No action required by licensee Non-resident agent or broker licence Level 1, 2 or 3 general insurance agent licence Licensee to request a general insurance agent licence type upon renewal, if not contacted by FCNB prior to expiry date
c) Adjuster licences
Licensing Class Under Current Regulations Licensing Class Under New Rules Action Required by Individual Licensees Level 1 probationary adjuster licence Level 1 assistant adjuster licence No action required by licensee Level 2 assistant adjuster licence Level 1 assistant adjuster licence No action required by licensee Any specialization of Level 3 adjuster licence Level 2 adjuster licence No action required by licensee Level 4 adjuster licence Level 3 adjuster licence No action required by licensee
d) Other Classes of Intermediary Licences
Licensing Class Under Current Regulations Licensing Class Under New Rules Action Required by Individual Licensees Travel insurance agent licence Travel insurance agent licence No action required by licensee Special insurance broker licence Special insurance broker licence No action required by licensee
As noted in the above charts, the following classes of individual intermediary licences will not automatically update in the FCNB’s system: (i) Non-Resident – Other than life insurance agent or broker licence, and (ii) Resident Agent – Class II licence. The FCNB notes that such licences will remain valid if no action is taken by the FCNB prior to the licenses’ expiry date (although certain information may be requested from licensees in connection with the FCNB updating certain licenses). However, upon renewal of such licences, licensees will be asked to review the details of the licensing qualifications and educational requirements and select the appropriate level of “General Insurance Agent licence type”. Licensees will also be asked to submit details of any educational courses and/or equivalent experience they have completed to date (in order for the FCNB to assess the proper licensing level to grant to the individual licensee). If a licensee does not have the required courses, the FCNB will assess the licensee’s experience to determine the appropriate level of licence to issue.
II. New Licensing Framework for Agencies, Adjusting Firms, and Managing General Agents
Under the Current Regulations, New Brunswick does not issue insurance intermediary licences to insurance agencies, adjusting firms, or managing general agencies (licences are only issued to individuals to act on behalf of corporate entities conducting insurance intermediary activities in New Brunswick). The New Rules establish a new licensing regime for agencies, adjusting firms, and managing general agents conducting insurance business in New Brunswick. Accordingly, upon the New Rules coming into force (February 1, 2023), agencies, adjusting firms and managing general agents conducting insurance business in New Brunswick will have up to 60 days to submit a completed application to obtain a corporate licence. Businesses that will be required to obtain a Restricted Insurance Representative licence, as defined in the New Rules, will have up to 90 days to submit a completed application to obtain the requisite licence.
The FCNB has also confirmed that where a firm undertakes both managing general agent (“MGA”) and insurance agency activities, such firm will be required to obtain both MGA and insurance agency classes of intermediary licenses.
The above noted new applications may be submitted to the FCNB through its online portal.
III. Key Next Steps
Any person holding insurance intermediary licensing with the FCNB or conducting insurance intermediary activities in New Brunswick should review the contents of the December Guidance and the New Rules as soon as possible (if not already done). In addition, existing licensees and corporate entities conducting insurance business in New Brunswick should commence preparations to ensure all applicable requirements are met in time for the coming into force of the New Rules.
Dentons Canada LLP’s corporate and regulatory insurance group would be pleased to assist insurance intermediaries with any matters related to the New Rules, including determining what next steps are required from an insurance intermediary licensing perspective (and assisting with the preparation and submission of the same).
