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Provincial Corporate Errors & Omissions Requirements and Regulations

For the purposes of this document the following definitions shall apply:

Personal Corporations: A life licensed agency incorporated under the corporations act of Canada or relevant provincial body and who has only one life licensed individual conducting business under or through it.

Other Agency Corporations: A life licensed agency incorporated under the corporations act of Canada or relevant provincial body and who has more than one life licensed individual conducting business under or through it.

British Columbia

Personal Corporations

Agencies qualifying as Personal Corporations in British Columbia do not require separate Errors & Omissions coverage. A Life Licensed individual agent may list the incorporated entity on their Individual Errors & Omissions Insurance Certificate as an Additional Named Insured.

Other Agency Corporations

Agencies who do not qualify as a Personal Corporation in British Columbia are required by provincial regulation to hold Errors & Omissions Insurance that is separate and distinct from the licensed individuals who conduct business under or through the corporation.

The Vicarious Liability clauses with an individual's Errors & Omissions Insurance coverage is not deemed as sufficient coverage for the corporation. The Insurance Council of British Columbia issued Notice #09-002 dated April 28, 2009 in which it states "Council has determined that Life Agencies which rely on individual life agent E&O insurance policies are not in compliance with rule 7(11). The only exception to this is a Life Agency that has only one individual life agent and is set up as a personal corporation and the individual life agent has an E7O insurance policy which extends coverage vicariously to the Life Agency."

Alberta

Personal Corporations

Agencies qualifying as Personal Corporations in Alberta do not require separate Errors & Omissions coverage. A Life Licensed individual agent may list the incorporated entity on their Individual Errors & Omissions Insurance Certificate as an Additional Named Insured.

Saskatchewan

All Incorporated Entities

The Insurance Councils of Saskatchewan does make a differentiating distinction in Errors & Omissions Insurance requirements between Personal Corporations and Other Agency Corporations. All incorporated entities regardless of the number of life licensed agents conducting business under or through it are required to maintain separate and distinct Errors & Omissions Insurance.

Life Insurance Council Bylaws (Saskatchewan, 2007), Schedule A, Section 1.1(a) states "agency license" means an agent license granted to a person that is a sole proprietorship, a partnership, or a corporation; (Rev.08/10).

Council has confirmed that by this section there is no difference between an individual and a corporation in terms of E&O requirements as set out in Life Insurance Council Bylaws (Saskatchewan 2007), Schedule A, Section 6.1 that "An agent shall maintain and provide annually proof of a valid policy of errors and omissions insurance…"

Manitoba

All Incorporated Entities

At this time Life Agency Corporations are not required to maintain separate Errors & Omissions Insurance coverage. Incorporated entities, whether a Personal Corporation or Other Agency Corporation may be named on an individual's Errors & Omissions Insurance Certificate as an Additional Named Insured and continue to satisfy Manitoba regulatory requirements.

Ontario

Personal Corporations

Agencies qualifying as Personal Corporations in Ontario do not require separate Errors & Omissions coverage. A Life Licensed individual agent may list the incorporated entity on their Individual Errors & Omissions Insurance Certificate as an Additional Named Insured.

Other Agency Corporations:

Agencies that do not qualify as a Personal Corporate in Ontario are required by provincial regulation to hold Errors & Omissions Insurance that is separate and distinct from the licensed individuals who conduct business under or through the corporation.

The Vicarious Liability clauses with an individual's Errors & Omissions Insurance coverage is not deemed as sufficient coverage for the corporation.

The Financial Services Commission of Ontario has not enacted any actual change to the language itself of the Errors & Omissions Insurance requirements, but, have begun enforcing an updated interpretation of them.

The Ontario Insurance Act Section 392.8 (1) (n) provides that agents who hold a life insurance license must carry Errors & Omissions Insurance. Ontario Regulation 347/04 Section 13 further states that an agent who holds a life insurance license shall maintain Errors & Omissions Insurance in an approved form in an amount of at least $1,000,000 per occurrence.

Although not set out in the Act or by Regulation, discussions with FSCO representatives have clearly indicated that FSCO deems an "agency" to be equivalent to an "agent" and is therefore subject to the same Errors & Omissions Insurance requirements.

Québec

All Incorporated Entities

Under Québec regulation all incorporated entities, both Personal Corporations and Other Incorporated Entities, must carry separate and distinct Errors and Omissions Insurance.

Newfoundland

All Incorporated Entities

Under Newfoundland regulation all incorporated entities, both Personal Corporations and Other Incorporated Entities, must carry separate and distinct Errors and Omissions Insurance.

Prince Edward Island

All Incorporated Entities

Prince Edward Island has no regulatory requirements concerning Errors & Omissions Insurance for life agency corporations of any type.

Nova Scotia

All Incorporated Entities

Nova Scotia has no regulatory requirements concerning Errors & Omissions Insurance for life agency corporations of any type.

Information provided here is for reference purposes only. For detailed information specific to each regulation as they may apply to you and your incorporated entity contact Advocis Broker Services or your provincial regulator.


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