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

Schedule Disposition versions

2013-10-22

SCHEDULE I

(s. 22)

NOTICE OF REPLACEMENT OF INSURANCE OF PERSONS CONTRACT

O.C. 830-99, Sch. I; M.O. 2013-12, s. 20.

2012-09-01

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.