d-9.2, r. 10 - Regulation respecting the pursuit of activities as a representative

Updated to 1 September 2012

This document has official status.

chapter D-9.2, r. 10

Regulation respecting the pursuit of activities as a representative

Act respecting the distribution of financial products and services

(chapter D-9.2, ss. 196, 202, 211 and 213).

DIVISION I SCOPE OF APPLICATION

1. The provisions of this Regulation govern the pursuit of the activities of the representatives referred to in section 1 of the Act respecting the distribution of financial products and services (chapter D-9.2).

O.C. 830-99, s. 1; M.O. 2009-06, s. 1.

DIVISION II INCOMPATIBLE OCCUPATIONS

2. The following activities and occupations are incompatible with the pursuit of activities as a representative:

(1)  performing the duties of a judge;

(2)  performing the duties of a police officer;

(3)  carrying on the profession of bankruptcy trustee;

(4)  the exercise of a health-care profession governed by the Professional Code (chapter C-26);

(5)  the exercise of the profession of lawyer or notary;

(6)  the exercise of the profession of chartered professional accountant, or chartered administrator;

(7)  the exercise of the occupation of real estate broker or real estate agent, except in connection with brokerage activities relating to loans secured by immovable hypothec;

(8)  the management of a union, other than a union formed of representatives, or the management of a professional association, or employment by any such organization.

Notwithstanding the first paragraph, the exercise of activities or professions referred to in subparagraphs 5 and 6 are not incompatible with the activities of a claims adjuster or financial planner.

O.C. 830-99, s. 2.

3. The following occupations are incompatible with the pursuit of activities as a damage insurance agent or damage insurance broker or a claims adjuster:

(1)  vendor, lessor or repairer of road vehicles, off-road vehicles or boats;

(2)  vendor, lessor or repairer of equipment, movable property or household items;

(3)  contractor, as that term is defined in section 7 of the Building Act (chapter B-1.1);

(4)  supplier of services or goods which could be required at the time of an insurance loss.

O.C. 830-99, s. 3.

DIVISION III CONDITIONS AND RESTRICTIONS GOVERNING THE PURSUIT OF ACTIVITIES

4. During the period of validity of his certificate, a representative must comply with the following conditions governing the pursuit of activities:

(1)  he must devote his time primarily to activities as representative, to administrative activities in a firm or an independent partnership or to other activities relating to the field of financial services;

(2)  he must forthwith deposit in a separate account held by him or by the firm or independent partnership on whose behalf he acts, as the case may be, all amounts collected or received on behalf of another person in the pursuit of his activities.

O.C. 830-99, s. 4.

5. No representative may, in pursuing activities, take part directly or indirectly in a contest or a promotion providing non-pecuniary benefits, as an incentive to promote or sell a product that does not meet the specific needs of his clients, with the exception of benefits or property of low value.

Notwithstanding the first paragraph, a representative may be reimbursed by a legal person or a third party for the direct costs incurred by attending a conference or a convention, provided that the main purpose of the conference or convention is to provide training on activities governed by the Act respecting the distribution of financial products and services (chapter D-9.2).

The first paragraph does not apply to a contest or promotion that was announced prior to 1 October 1999.

O.C. 830-99, s. 5.

6. A representative in insurance of persons must, before completing an insurance proposal, analyse the insurance needs with the purchaser or the insured, the existing policies or contracts held by such purchaser or the insured, the features thereof, the name of the issuing insurers, and all other necessary elements such as the income, financial situation, number of dependents, and personal and family obligations of the purchaser or the insured. The representative must record all such information in writing.

O.C. 830-99, s. 6.

7. No damage insurance agent may pursue the activities of a damage insurance broker.

No damage insurance broker may pursue the activities of a damage insurance agent.

O.C. 830-99, s. 7.

8. No financial planner may render financial planning services in such capacity unless he has first entered into a written agreement with the client which, as a minimum, specifies the following:

(1)  the nature and scope of the mandate;

(2)  an estimate of his remuneration and of the number of hours required to complete the mandate;

(3)  all the sectors or classes of sectors in which he is authorized to act and a description of the financial products and services that are likely to be offered by the financial planner;

(4)  the client’s signature, attesting to the acceptance of the mandate.

No agreement entered into under the first paragraph may oblige the client to purchase a financial product or service offered by the financial planner.

O.C. 830-99, s. 8.

9. The financial planner must prepare a written financial planning report and forward it to his client.

O.C. 830-99, s. 9.

DIVISION IV REPRESENTATION AND CLIENT SOLICITATION

10. Upon first meeting a client, a representative must give the client a written document, such as a business card, which indicates the following:

(1)  the representative’s name;

(2)  the representative’s business addresses, business telephone numbers and facsimile number, if any;

(3)  the titles the representative is authorized to use;

(4)  the sectors or classes of sectors in which the representative is authorized to act as indicated in his certificate, unless the titles he uses are representative thereof;

(5)  the name of the firm or independent partnership on whose behalf the representative pursues activities.

O.C. 830-99, s. 10.

11. The document referred to in section 10 may also include the following:

(1)  the names of the representative’s partners, if they pursue activities on behalf of an independent partnership;

(2)  the representative’s residential address and telephone numbers, electronic mail and mailing addresses;

(3)  the representative’s education and qualifications;

(4)  the representative’s years of experience in each sector in which he pursues activities;

(5)  the description of the products and services offered by the representative.

O.C. 830-99, s. 11.

12. Where a representative does not meet a client personally, he must verbally disclose the items set out in paragraphs 1, and 3 to 5 of section 10.

Upon request by the client, the representative must give the client the document referred to in section 10 when he first sends other documents.

O.C. 830-99, s. 12.

13. Where a representative uses statistics in his written representations, he must indicate the source thereof.

O.C. 830-99, s. 13.

14. A representative must refrain from engaging in any client solicitation or representation that:

(1)  states the representative’s income or financial performance;

(2)  appears to promise results that the representative is unable to obtain;

(3)  uses a visual image or phrase that is likely to cause confusion, such as a trade mark, slogan or symbol.

O.C. 830-99, s. 14.

15. Except in representations directed exclusively at other damage insurance brokers, a damage insurance broker may not, in any manner whatsoever, make representations on behalf of an outside insurer or to the effect that the damage insurance broker can obtain the insurance damage product of an outside insurer.

O.C. 830-99, s. 15.

DIVISION V PRODUCT INFORMATION

16. Where a representative in insurance of persons sells to a client an individual insurance of persons product or an individual annuity, including an endowment contract, the representative must give to the client a document, printed in at least 10-point Bookman Old Style font or its equivalent, indicating the following:

(1)  whether the insurance costs payable under the contract are guaranteed and, where applicable, for how long, and whether such amounts may fluctuate;

(2)  whether the return on the amounts invested through the insurance product is guaranteed or not;

(3)  whether the face amount of the insurance is guaranteed or may fluctuate;

(4)  any specific exclusions contained in the contract;

(5)  if a surrender fee or a penalty is payable if the contract is surrendered;

(6)  if the purpose of the transaction is to terminate or replace another life insurance product.

O.C. 830-99, s. 16.

DIVISION VI PROFESSIONAL LIABILITY INSURANCE

17. The insurance contract covering the professional liability of a representative acting on behalf of, but not employed by, a firm must provide for the following:

(1)  a minimum coverage amount of $500,000 per claim and $1,000,000 per year;

(2)  that any deductible amount stipulated in the contract may not exceed $10,000;

(3)  express stipulations to the effect that:

(a)  coverage is provided for liability arising from the fault, errors, negligence, or omissions committed by the representative in pursuing activities as a representative, or arising from the fault, errors, negligence, or omissions committed by the representative’s mandataries, employees or trainees in the performance of their duties, regardless of whether or not such persons are still so engaged on the date of the claim;

(b)  the coverage provided in respect of the activities of the representative during the period for which the contract is in effect extends beyond the period of insurance provided for therein for a further term of 5 years from the date the representative ceases to pursue activities, irrespective of whether or not he is still alive;

(c)  the insurer must advise the Autorité des marchés financiers of its intention not to renew the contract or to terminate the contract 30 days prior to the date of non-renewal or termination;

(d)  the insurer must notify the Authority upon receiving from the representative notice of non-renewal or termination of an insurance contract;

(e)  the insurer must notify the Authority upon receiving any claim under the contract, regardless of whether the insurer decides to honour the claim.

O.C. 830-99, s. 17; O.C. 1013-2003, s. 1.

DIVISION VII POLICY REPLACEMENTS

18. The provisions of this Division apply to all representatives in insurance of persons who replace individual life insurance contracts, including serious or critical-illness insurance contracts.

The provisions also apply to representatives in insurance of persons who secure the adhesion of a person to a group insurance contract, and where that adhesion is likely to result in the termination, cancellation or reduction of benefits of an individual insurance policy.

Notwithstanding the first paragraph, the provisions of this Division do not apply to a representative in insurance of persons who intends to replace an annuity of an insurer, including an endowment contract.

O.C. 830-99, s. 18.

19. An amendment made to an existing contract shall not be regarded as a replacement contemplated in this Division.

O.C. 830-99, s. 19.

20. A representative must endeavour to ensure that all insurance contracts are maintained in effect, unless the replacement of the contract is justified as being in the interest of the purchaser or the insured; the representative in insurance of persons who replaces the contract must demonstrate that the replacement is so justified.

O.C. 830-99, s. 20.

21. No representative in insurance of persons may encourage an insured or a purchaser who is not the insured, to cancel, cause to lapse or abandon one insurance contract in favour of another insurance contract, unless he complies with the replacement procedure set out in section 22.

O.C. 830-99, s. 21.

22. Where the purchase of an insurance contract is likely to result in termination, cancellation or reduction in benefits of another insurance contract, the representative must:

(1)  undertake a complete analysis of the needs of the insured or the policyholder, in accordance with section 6;

(2)  complete, at the same time as the insurance proposal, the form sold by the Authority and provided in Schedule I or Schedule II if it is in the interests of the insured or the policyholder to replace one contract with another;

(3)  give the form, once completed, to the insured or the policyholder and explain the form to such insured or policyholder by comparing the features of the current contracts with those of the proposed contract and by describing the advantages and disadvantages of the replacement;

(4)  send the completed form to the head offices of the insurers who issued the contracts likely to be cancelled, by any means providing proof of the date of sending, within 5 working days of the signing of the insurance proposal;

(5)  send a copy of the completed form, within the time limit prescribed in paragraph 4, to the insurer with whom the representative in insurance of persons intends to place the new contract.

O.C. 830-99, s. 22.

23. Where a replaced product is not the same type as that offered, the representative must send his client a product replacement notice answering the following questions:

(1)  How does the current contract fail to meet the client’s needs?

(2)  How will the proposed product better meet the client’s needs?

(3)  What disadvantages will the replacement involve for the client?

O.C. 830-99, s. 23.

24. No representative may prevent an insurer who issued a contract that is likely to be replaced from contacting the insured or the policyholder with a view to dissuading such insured or policyholder from replacing the contract or with a view to offering an equivalent contract.

O.C. 830-99, s. 24.

25. The replacement procedure provided for in section 22 also applies, with the necessary modifications, to the replacement of the following:

(1)  a signed insurance proposal for which:

(a)  the mode premium has been paid in full, in cash or by cheque;

(b)  the signatory of the proposal has given either a bank authorization or written authorization for deduction from salary or a written authorization to transfer funds from one policy issued by an insurer to another policy issued by the same insurer;

(2)  a signed insurance proposal providing for temporary coverage of not more than 1 year, for which the temporary insurance premium has been paid.

O.C. 830-99, s. 25.

26. The replacement procedure provided for in section 22 does not apply to the replacement of an insurance proposal for which the premium has been fully paid but where the medical examination was not conducted with the period stipulated on the conditional receipt.

O.C. 830-99, s. 26.

27. Where an insurer is prepared to issue a contract in accordance with the terms and conditions of the insurance proposal, but subject to payment of an additional premium, the representative must follow the replacement procedure before he obtains a similar contract without any additional or extra premium from another insurer.

O.C. 830-99, s. 27.

DIVISION VIII DAMAGE INSURANCE BROKER OR AGENT ACTING AS CLAIMS ADJUSTER

28. A damage insurance broker or agent is authorized to act as a claims adjuster pursuant to section 46 of the Act and must:

(1)  comply with the rules governing the activities of a claims adjuster, with the necessary modifications;

(2)  disclose, in writing, to each person with whom he transacts business the type of remuneration he receives for services rendered as a claims adjuster.

O.C. 830-99, s. 28.

29. (Omitted).

O.C. 830-99, s. 29.

SCHEDULE I

(s. 22)

PRIOR NOTICE OF REPLACEMENT OF LIFE INSURANCE POLICY

Prior Notice 
of replacement of life insurance policy
















As you read through this form, you should ask yourself the following questions:			
	1	Was a written analysis of my insurance needs completed before this insurance proposal was made? Do I have a copy of the analysis? Insurance representatives in insurance of persons must take your current and future needs into account, along with your objectives and financial situation, before suggesting the replacement of your current policy.	
	2	Are the premiums for the new policy higher or lower than the old premiums? A new life insurance policy of the same type as your old policy could cost you more, since you are older.	
	3	Will I lose any tax benefits? For example, some tax benefits may be lost if you replace a life insurance policy acquired before December 2, 1982.	
	4	Have any steps been taken to maintain or amend my current life insurance policy? It is generally possible, and preferable, to opt for a change to an existing policy rather than to replace it.	
		Bureau des
services financiers
140, Grande-Allée Est, bureau 300
Québec (Québec) G1R 5M8
Telephone: [phone]
1.877-525-6273
Fax: [phone]	








INSTRUCTIONS FOR THE REPRENSENTATIVE

How to use the form
“Prior notice of policy replacement”				
This form consists of three separate booklets, which will be completed in three copies to be given to:
	copy 1 - the policyholder;
	copy 2 - the current insurer;
	copy 3 - the new insurer.
An explanatory guide is included for the benefit of consumers.				
Step 1 - Completing the form
Complete each booklet, writing on Copy 1 - Policyholder (green copy).
Write in capitals, using a ball-point pen.				
Step 2 - Before signing the form
The Prior Notice of Replacement may be completed in advance by the representative in insurance of persons, who must then go over it point by point with the client, before the client signs. The client’s signature does not constitute a request to terminate the current policy. The prior notice must in all cases be signed on the same day as the application for life insurance.				
Step 3 - Copies
Detach Copy 2 - Current Insurer (yellow copy) from each section. Your insurance representative will make sure it reaches your current insurer within five days of being signed.
Proceed in the same manner for Copy 3 - New Insurer (blue copy).
The representative must make a photocopy of the Prior Notice of Replacement, duly completed, for his record.
The remaining parts of the form are the property of the policyholder.				
This form was prepared by the Conseil des assurances de personnes and is used by the Bureau des services financiers. It is compulsory that the form be filled out whenever a policy is to be replaced.
The Bureau des services financiers was established by the Act respecting the distribution of financial products and services; its mission is to protect the public by overseeing the application of the Act and the regulations under it, which govern the activities of certificate holders, firms, independent representatives and independent partnerships.				

Section 1
1-	General Information
	a-	Guide
	b-	Table
2-	Coverage provided
	a-	Guide
	b-	Table








Guide Section 1
1 CONSUMER GUIDE
1-	General Information
1	The life insurance policyholder is the person who makes all the decisions concerning the policy and who, in general, pays the premiums.
2	In most cases, the policyholder is also the insured, but in some case the policyholder and the insured may be two separate persons.
3	The other insureds are the individuals covered by the same policy, such as family members or business partners.
4	The terminated insureds are the insured insureds who will no longer be covered under the new policy, and the additional insureds are the individuals who will be added to the new policy.
5	Joint insurance is a single policy that covers two individuals, where the death benefit is payable following the death of the first or the second individual, depending on the option chosen.
6	The main policy types are term life, whole life, universal live, and 100-year-term life.
7	The effective date is the date on which the policy takes effect once the proposal is accepted by the insurance company.
8	The suicide clause: if death results from suicide and occurs within two years of the effective date of the policy, the insurer will not, in general, pay the death benefit.
9	The incontestability claude: if death occurs within two years after the policy comes into effect, the insurer may refuse to pay the death benefit if incomplete or inaccurate information on the insured’s health and lifestyle were given or if information was omitted. The insurer may, in all cases, refuse to pay the death benefit if it is proven that the insured committed intentional fraud.
10	A registered policy: if you cash in the amounts that accumulate under an insurance policy that is part of a registered retirement savings plan (RRSP), you will have to pay income tax.
2-	Coverage provided
11	The total coverage is the amount that will be paid to the beneficiary following the death of the insured.
12	The coverage may consist of a guaranteed base amount plus an additional amount or endorsement that may increase, decrease, remain stable or terminate at a specific time.
13	Renewable term insurance means a policy that may be renewed on the dates specified in the policy. See part 4f of this form for the premiums applicable for renewal.
	Convertible term insurance means term insurance that may be converted into permanent insurance without having to prove insurability.
SECTION 1 Prior notice of replacement of life insurance policy
1	General information
a	Name and given name of policyholder (1)	Name and given name of insured (2) 	Date of birth
				of insured
			_______________
			Month  Day  Year
b	Other insureds (multiple coverage)
	Name and given name of insured (1) (3)	n°. of prior notice	Name and given name of insured (2)	n°. of prior notice
	Name and given name of insured (3)	n°. of prior notice	Name and given name of insured (4)	n°. if prior notice

Terminated insureds (4)			Additional insureds		
Family name and
given name	Type of
coverage	Amount of 
coverage $	Family name and
given name	Type of
coverage	Amount of 
coverage $
					
					

c	Joint insurance (5)		Name and given name of 2nd insured
	Payable on:___1st death ___2nd death
	
INSURANCE POLICY		CURRENT POLICY	PROPOSED POLICY
d	Name of insurance company:
Type of policy: (6)	
Policy n°.:	
Proposal N°.:
e	Is there more than one policy that may be replaced by the proposed policy? If so, indicate the prior-notice number used for each policy:	Prior notice n°.:
Prior notice n°.:	Not applicable
f	Effective date: (7)	
Month	Day	Year	Not applicable
g	What is the expiry date of the suicide clause? (8)	
Month	Day	Year	_____ year(s) after the effective date of the contract
h	What is the expiry date of the incontestable clause? (9)	
Month	Day	Year	_____ year(s) after the effective date of the contract
i	Is the life-insurance policy part of a registered retirement as an RRSP? (10)	
___Yes	____No	
___ Yes	___No
2	Coverage offered			
a	What is the total coverage (11)	$	$
b	The coverage includes:
• a guaranteed base amount of: (12)
• an additional amount of:
The additional amount may:	

	$
remain stable	____
increase	____
decrease	____	

	$
remain stable	____
increase	____
decrease	____
c	The term coverage, if any, is:
If so, until when (13)	___ convertible ___ renewable

Month	Day	Year	___ convertible ___renewable

Month	Day	Year

Section 2
2-	Coverage provided (cont’d)
3-	Premiums	
	a- Guide
	b- Table
4-	Cash surrender values, participation and savings	
	4.1	Guaranteed Values
		a- Guide
		b- Table
Guide Section 2
2 CONSUMER GUIDE
2-	Coverage provided (cont’d)
14	Paid-up life insurance: the accumulated cash surrender value of your policy eliminates the need to pay premiums, although you remain insured for a lesser amount until your death.
15	Extended life insurance: the accumulated cash surrender values in of your policy may enable you to stop paying premiums and remain insured for the same amount but for a certain number of years only.
16	Additional coverage is provided by the options you may or may not choose or not to add to your life insurance policy. Some of the most popular are: an insurability guarantee that allows the amount of life-insurance to be increased, according to the conditions of the policy, without providing proof of good health; premium exemption, which releases a policyholder (or an insured) who becomes disabled from the requirement to pay premiums; accidental death or dismemberment, which provides for the payment of an additional amount in the event of accidental death, or the payment of a lump-sum amount in the event of dismemberment.
3-	Premiums
17	The total annual premium is the amount you pay each year for your life insurance policy.
18	The instalment period may be monthly, quarterly or annual. An annual premium that has already been paid is not generally refundable.
19	An additional premium is an additional amount that is added to the normal rate because the risk is greater; it can be temporary or permanent.
20	An exclusion is a state or condition for which the insured is not covered; it can be temporary or permanent.
21	A guaranteed premium will remain the same, or will increase only at certain times specified in the policy.
22	The guaranteed payment period determines how may years the policy-holder will have to pay premiums.
23	The minimum premium consists of the cost of the insurance, taxes, and administration fees required for the payment of the life-insurance policy.
24	The difference between the minimum premium and the premium actually paid constitutes the savings element in universal life insurance.
4-	Cash surrender values, participation and savings
4.1	Guaranteed Values
25	The cash surrender values of a life insurance policy are the amount of savings guaranteed by the policy. These values are not generally paid out in addition to the death benefit. However, you may borrow against the cash surrender value by paying interest, or obtain the entire cash surrender value when the contract is cancelled.
26	The net amount is the total of the values that will be paid if the policy is terminated. The stated amount takes into account all the deductions that will be applied (reimbursement of loans, taxes, administration costs, etc.). This amount may be used for personal needs, to pay the premiums on a new policy, or as an investment. If the amount is invested, the rate used to calculate the estimated value must be realistic and market-based.
SECTION 2 Prior notice of replacement of life insurance policy

INSURANCE POLICY		CURRENT POLICY	PROPOSED POLICY
2	Coverage provide (cont’d)		
d	The life insurance contract may be: (14) (15)
- on payment of:
- in the following number of years:
- for the following number of years:	fully	
paid-up	extended
	$	$
	yrs.
	yrs.	fully
paid-up	extended
	$	$
	yrs.
	yrs.
e	The life-insurance policy includes supplementary coverage, as follows: (16)	___ Insurability guarantee
___ Exemption from premiums
___ Accidental death or mutilation
other _______________________	___ Insurability guarantee
___ Exemption from premiums
___ Accidental death or mutilation
other _______________________
3	Premiums		
a	Total annual premium: (17)
What is the payment frequency? (18)				$		$
b	Does the premium include an additional premium? (19)
• If so:	- why?
	- For how long?	
____ Yes	____ No	
To be determined
c	Does the premium take into account an exclusions (20)
• If so:	- why?
	- For how long?	
____ Yes	____ No	
To be determined
d	Premium rate:	____ Smoker ____Non-Smoker	____ Smoker ____ Non-Smoker
e	Is the premium guaranteed? (21)	
____ Yes	____ No	
____ Yes	____ No
f	Amount of the premium:		- In 10 years
		- At age 55:
		- At age 65:				$
			$
			$				$
			$
			$
g	Guaranteed term of premium payment: (22)				yrs.				yrs.
h	If the policy is of a universal life insurance policy, what is the amount of the minimum premium? (23)
It this amount

Which premium does the policy owner choose? (24)	

			$
___ guaranteed for ______ yrs.
___ non-guaranteed
___ level 		___ Incremental

			$	

			$
___ guaranteed for ______ yrs.
___ non-guaranteed
___ level 		___ Incremental

			$
4	Cash surrender values, participation and savings		
4.1 Guaranteed values			
a	Does the life insurance policy have a cash surrender values? (25)
Amount of the guaranteed:		 In 10 years
cash surrender values:		- At age 55:
		- At age 65:	
____ Yes	____ No
			$
			$
			$	
____ Yes	____ No
			$
			$
			$
b	What would the net amount paid out by the company be if life insurance policy were cancelled today?
How would this amount be used? (26)		

Not applicable
If funded, projection at 			%
Amount invested:			$
Estimated amount:			$
at ______ years

Section 3
4-	Cash surrender values, participation and savings (cont’d)
4.2-	Guaranteed Values	
	a- Guide
	b- Table
5-	Reasons for replacement
	a- Guide
	b- Table
6-	Signature and dates
	a- Guide
	b- Table
Guide Section 3 
3 CONSUMER GUIDE
4-	Cash surrender values, participation and savings
4.2	Non-Guaranteed amounts
27	Participation in profits: a participating life insurance policy entitles the policyholder to part of the profits generated by the insurance company. The participation is never guaranteed. It can be used to reduce the premium or take out additional life insurance, or it can be cashed in or otherwise used.
28	Projections are forecasts of future returns. They are note guaranteed.
29	Additional life insurance is the amount of additional life insurance purchased using the participation.
30	The investment amount is an estimate of the amount accumulated under the policy.
31	The total death benefit is the total coverage as indicated in point 11, to which the amounts estimated in (c) and/or (d) are added, where applicable.
5-	Reason for policy replacement
32	Remember that it is generally possible, and preferable, to amend an existing policy rather than replace it.
6-	Signatures and dates
33	The policyholder must enter his reasons for replacing the life insurance policy. If the representative is a trainee, the prior notice of policy replacement must be authorized by the person supervising the trainee’s activities, namely the training supervisor.
34	The entire form belongs to the policyholder, with the exception of the copies for the insurers involved.
SECTION 3 Prior notice of replacement of life insurance policy

INSURANCE POLICY		CURRENT POLICY	PROPOSED POLICY
4	Cash surrender values, participation and savings (cont’d)		
4.2 Non-guaranteed amounts			
a	Will there be any participation in the company’s profits? (27)
If so, how will the participation be used?	
____ Yes	____ No	
____ Yes	____ No
b	If the policy is a universal life-insurance policy, is the accumulated savings fund payable in addition to the death benefit?
What is the rate used for the illustration?	

____ Yes	____ No
		%	

____ Yes	____ No
		%


28	Projections	Additional life insurance:	Present	Proposed	Present	Proposed	Present	Proposed
			at age 55		at age 65		at age 75	
c		Saving fund available under the universal life insurance policy: (29)	
$	
$	
$	
$	
$	
$
d		Savings fund available under the universal life insurance policy: (30)	
$	
$	
$	
$	
$	
$
e		Total death benefits (31)	$	$	$	$	$	$

5-	Reasons for replacement (32)
a	In what way does the proposed contract meet the needs of the policy-holder better, and what are the advantages and disadvantages of the policy replacement?
b	Is there any other relevant information that should be given in connection with the policy replacement?
6-	Signatures and dates
	BEFORE SIGNING THIS FORM:
1	Make sure that it was filled out entirely in your presence or has been explained to you point by points.
2	Make sure you keep your current life insurance policy until the new policy is in force.
3	Remember that it is your responsibility, as a consumer, to ask all the questions required to understand the product you are offered; it is the responsibility of the representative to disclose all the information needed to help you do so.

33	REPRESENTATIVE	family name	given name	Signature	Telephone n°.	Certificate n°.
	TRAINING SUPERVISOR	family name	given name	Signature	Telephone n°.	Certificate n°.

34	POLICYHOLDER I, the undersigned ________________________, after reading this notice and understanding its terms, wish to proceed with the replacement or my current life insurance policy for the following reasons

			Signature			Date		Telephone
Important notice for the consumer
This prior notice:
• must be completed and signed in cases where, on the recommendation of your insurance representative, you intend to replace your current life insurance policy;
• will be used to notify your current insurer of a possible policy cancellation;
• must be signed on the same day as the new application for insurance (insurance proposal);
• will not cancel your existing policy;
• is not a contract.
You may withdraw your application for insurance at any time before the new policy is issued. In addition, most insurance companies allow an additional 10-day period, after the policy is issued, to allow you to examine it thoroughly. During this period, you may cancel the policy without incurring a penalty.

O.C. 830-99, Sch. I.

SCHEDULE II

(s. 22)

PRIOR NOTICE OF REPLACEMENT OF AN INDIVIDUAL DISABILITY INSURANCE CONTRACT

(please print)

Name of insured: __________________________________

Address: _________________________________________

Date of birth of insured: _____/_____/______

Day Month Year

Telephone no.: _________________

REPLACED CONTRACT PROPOSED CONTRACT

Company: ___________________________________________________

Policy no.: ___________________________________________________

Waiting period: ___________________________________________________

Duration of coverage: ___________________________________________________

Amount of benefit: $___________________________$_____________________

Amount of premium: $___________________________$_____________________

REASON FOR REPLACEMENT

(1) How does the current contract fail to meet the client’s needs?

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(2) How will the proposed contract better meet the client’s needs?

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(3) Will the replacement involve any disadvantages for the client? If so, list them below.

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IMPORTANT NOTICE FOR CLIENT

It is of the utmost importance, before signing this form, that you read all the information appearing on the reverse side of the client’s copy.

SIGNATURE

I hereby acknowledge that I have received a copy of this notice, duly completed, and that a copy of the notice will be sent to the mentioned companies.

Date: _________________

Signature (insured): _____________________________________

Name of representative (block letters): _____________________________________

Signature of representative: _____________________________________

Telephone: _____________________

(1) White: copy of the policyholder

(2) Yellow: copy of the current insurer

(3) Pink: copy of the new insurer

(4) Gold: copy of the representative

IMPORTANT NOTICE FOR THE INSURED

(1) This notice is intended to inform and protect you as you consider the possibility of amending your disability insurance policy. The change you are considering may require the issue of a new disability insurance policy, or the cancellation of your current policy.

(2) The contract to be replaced should not be terminated before the proposed contract is issued and in force in accordance with your instructions.

(3) The following facts may influence your decision to replace or not to replace your current contract:

(a) the clause providing for the incontestability of the policy after 2 years is not generally transferred from one contract to another. The validity of the new policy may, in some cases, be challenged in a situation where the old contract would have been incontestable.

(b) if your insurability has changed, a new policy may cost more and include more restrictions. You should not amend or cancel your current insurance contract without verifying your insurability.

(c) the new contract may not cover certain health problems which you may have contracted before it was issued and which may be covered by the replaced contract.

Please take these factors into account when you examine the prior notice of replacement.

PROCEDURES TO BE FOLLOWED BY THE REPRESENTATIVE

This document contains information required by the Autorité des marchés financiers when a disability insurance contract is replaced. It must be used whenever a contract is replaced.

(1) Once the form has been duly completed, using a ball-point pen only, and signed by the insured, you must, using registered or certified mail and within 5 days of the signature of the proposal:

(a) send the yellow copy to the head office of the insurer that issued the replaced contract;

(b) send the pink copy to the head office of the insurer issuing the new contract.

(2) The white copy must be given to the insured, and the gold copy must be kept for your records.

COMPARATIVE CHART

(write in capital letters)

Data sheet prepared for: __________________________________ by: _________________________________

insured intermediary

Date: ______________________________

                                       Replaced contract       Proposed contract   

Company

Policy number

Characteristics of contracts

  Amount of benefit                    $                       $

  Compensation period

    In case of accident

    In case of sickness

Elimination period

  Rehabilitation coverage              yes          no         yes         no

  Occupation coverage                  yes          no         yes         no

  Period of occupation coverage

  Renewal                            guarant.  not guarant.  guarant.  not guarant.

  Rescindable                          yes          no         yes         no

  Exclusion of pre-existing sickness   yes          no         yes         no

Premiums                             variable     level      variable     level
                                     guarant.   not guarant.  guarant. not guarant.

  At present                                         $                      $

  In 5 years                                         $                      $

  In 10 years                                        $                      $

Waiver of premiums                     yes          no         yes         no

Exclusion riders                       yes          no         yes         no
                                     If yes, list them in    If yes, list them in 
                                     the comments            the comments
                                     section below           section below

INTEGRATION OF BENEFIT PROVISION       yes          no         yes         no
  With government plans

  With other contracts                 yes          no         yes         no

ADJUSTMENT OF BENEFITS                 yes          no         yes         no

  Rate                        ___ min. ___ max. ___ lev. ___ min. ___ max. ___ lev.

Partial disability                     yes          no         yes         no

  Maximum period of compensation

PARTIAL LOSS OF EARNINGS               yes          no         yes         no

  Maximum period of compensation

INCREASE OF BENEFIT
  Option to increase benefit without
  evidence of insurability             yes          no         yes         no

  Amount                                             $                      $

  Date of options

  Possibility to exercise options
  during disability                    yes          no         yes         no

Accidental death and dismemberment     yes          no         yes         no
                                     Amount          $       Amount         $
    

COMMENTS: Write in this section any other item comparing or contrasting the replaced contract(s) with the proposed contract.

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O.C. 830-99, Sch. II.

REFERENCES

O.C. 830-99, 1999 G.O. 2, 2066

O.C. 1013-2003, 2003 G.O. 2, 3005

M.O. 2009-06, 2009 G.O. 2, 3686A

S.Q. 2012, c. 11, s. 32