TRUSTED ADVISOR AND ADVOCATE
TRUSTED ADVISOR AND ADVOCATE
Insurance Brokers must be registered with the Registered Insurance Brokers of Ontario (“RIBO”) in order to sell insurance as a broker. RIBO is a self-regulating body that regulates licensing, professional competence, ethical conduct, and insurance related financial obligations of brokers in Ontario. It receives it’s authority to regulate brokers from the Registered Insurance Brokers Act, 1990 (“RIBO Act”).
Burokas Law acts as a RIBO Lawyer by representing insurance brokers with their dealings with RIBO. Some of the services offered include:
Individuals, partnerships, and unincorporated associations must obtain registration to act as an “insurance broker”. The definition of this title is important as it captures the conduct that requires registration. The RIBO Act defines “insurance broker” as a person who deals directly with the public and:
Individuals and business engaging in these practices without registration is an offence under the RIBO Act and liable to fines up to $100,000 and 6 months in prison. There are numerous exceptions to the registration requirement, most notably insurance agents licensed under the Insurance Act, lawyers, accountants, and persons solely acting as a reinsurance broker.
RIBO employs and individual called a “Manager” who is given administrative powers to issue certificates of registration or refuse to do so. He or she shall issue a certificate (or renew one) to an applicant who meets the qualifications described below. If not, the Manager will refer the application to the Qualification and Registration Committee to review the Manager’s proposal to refuse registration.
Qualification for Registration
Applicants must meet the following requirements for registration:
In addition, businesses (corporations, partnerships, and sole proprietorships) must be under the direction and supervision of a principal broker. A licensed individual qualifies if:
For any kind of applicant, there is a bar to registration if the Qualification and Registration Committee is satisfied the applicant or a person occupying the same office space is in a position to offer inducement or use coercion/undue influence to secure business.
The Qualification and Registration Committee
If the Manager refers an application to the Qualification and Registration Committee, it will determine the eligibility of applicants. They may require the applicant take and pass additional examinations or take additional training. It may also limit a member’s (a licensed individual or business) practice until it can demonstrate a standard of competence through completing experience or education requirements.
The Qualification and Registration Committee may also propose to refuse to grant a certificate if it believes an applicant is ineligible and additional courses/training are inappropriate. In such a case, the Manager will provide a notice of proposal outlining this decision along with written reasons. There is an exception to this rule if the applicant was previously revoked or suspended by the Discipline Committee.
Individuals who receive a notice of proposal to refuse a certificate have the ability to appeal that decision and have a hearing in front of the Qualification and Registration Committee.
At a hearing, an applicant will have the ability to call oral and documentary evidence supporting their position and challenge the Manager’s evidence. They will be able to make submissions on why they think the Manager is in error in refusing an application. After a hearing, the Qualification and Registration Committee may confirm the refusal, require additional exams/training, or register the applicant on appropriate conditions.
RIBO uses a Complaints Committee to consider and investigate complaints regarding the conduct of any member of RIBO (anyone who is licensed). This committee will only act if the complaint was in writing, the relevant member has been given the opportunity to respond, and the committee has examined or made every reasonable effort to examine all relevant records. The Complaints Committee will either refer the matter to the Discipline Committee or take another action it considers appropriate in the circumstances (ex. oral caution).
The Complaints Committee does not conduct hearings. It will only consider written submissions and examine available documentary evidence.
The Discipline Committee hears and determines allegations of misconduct or incompetence that are referred to it by the Complaints Committee or RIBO’s governing body- “Council”. A member will be found to have committed misconduct if they were found guilty of an offence relevant to their suitability to be an insurance broker or they have committed one or more of a long list of conduct outlined in the RIBO Act’s regulations. Some examples include:
A full list of conduct can be found at section 15 of the RIBO Act’s Regulation 991.
The Discipline Committee may find a member incompetent if they are of the opinion that, while acting as a broker, they have displayed a serious lack of knowledge, skill or judgment or a serious disregard for the welfare of a person.
They will conduct a hearing whereby they will hear evidence, find facts, determine whether those facts constitute misconduct or incompetence, and if so, may order:
If the Manager receives information leading him or her to believe that the member may be incapacitated, they can refer the matter to Council who will appoint a board of inquiry investigate the issue. The board may require the member to take physical or mental examinations. The findings of these examinations are then reported back to Council who may refer to the Qualification and Registration Committee.
The committee will either find the member incapacitated or not. If they do, it may revoke or suspend the certificate, or attached conditions to it limiting the individual’s practice.
A former member who had their licence revoked or suspended by the Discipline Committee, or revoked or suspended by the Qualification and Registration Committee because of incapacity, may apply for reinstatement.
If there are grounds for the Manager to believe a member has committed an act of misconduct or incompetence, they may appoint investigators to determine whether the act occurred. Such an investigator may enter the broker’s office and examine relevant records. They may also apply to the courts, like a police officer, and obtain search warrants empowering them to enter buildings, search, and seize documentation.
Anyone, (not just members) who contravenes the RIBO Act; and every officer or director of a corporation, partner of a partnership, who knowingly concurs in such contravention, is guilty of an offence. Penalties can be as high as a $100,000 fine and six months in prison for individuals and a $200,000 for corporation.
Any conviction under the RIBO Act will severely prejudice an individual's or business’s ability to act as an insurance broker in Ontario.
If you are seeking to become an insurance broker, require compliance advice, or subject to an administrative action, please don't hesitate to contact Burokas Law.