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Illustrated Code of Ethics – Damage Insurance Representatives

This is your code of ethics. Each section is illustrated with stories based on either actual disciplinary decisions, or deficiencies observed in the field or by the Syndic’s Office. Its goal is to encourage you, as damage insurance agents and brokers, to reflect on certain ethical breaches in order to help you adopt best practices and fulfill your ethical obligations.

Please note that the selection of stories is not exhaustive and the sections may apply to a variety of situations. Please do not hesitate to contact us if you have any questions about your ethical obligations.

We have standardized the terms used in each story to ensure the texts are easily understandable. The terms “agent” and “broker” designate damage insurance representatives; the words “damage insurance” have been removed for ease of reading.

Division I General Provisions

From day one, agents and brokers have always aimed for the highest standards of professionalism…

Section 1 reminds readers of the ChAD’s mission to protect the public. It explains why the Code exists and the importance of your professional practice in protecting the public.

Insurance contracts are complex, and a significant information imbalance exists between professionals and the general public in terms of knowledge and understanding the issues. You are the first line of defence in protecting insureds.

During busy periods, a manager—who is himself an agent— regularly asks a non-certified employee to confirm with insureds the coverages included in their contracts.

This violates the Act respecting the distribution of financial products and services and the Code of ethics, since this action is reserved for agents and brokers. He should do this himself or mandate another agent to do so.

While the agent could have asked a non-certified employee to collect factual information, such as an address, profession, or details on the property to be insured, etc., agents remain responsible for analyzing the information they receive and ensuring that it is complete and accurate in order to give insureds proper advice based on their needs.

A broker (independent representative) wants to spend a month in Europe. He asks a friend who retired from the profession two years ago and therefore has not renewed his certificate, to temporarily replace him in return for remuneration.

When talking with insureds, the former broker introduces himself as a temporary replacement. He listens to the insureds’ requests, makes changes to their contracts as per their requests, and provides advice on damage insurance products.

The broker should have hired a certified professional to replace him. A retired individual who does not hold a certificate does not have the right to carry out acts reserved for agents and brokers—not even for just a few weeks.

Resource:  Re-read the following article: Which acts are reserved for agents and brokers?

A credit manager at a financial institution has a friend who is a broker.

He proposes to include her quote for home insurance each time a client takes out a mortgage with his financial institution and to pay her $100 once the transaction has been completed.

This type of scheme is prohibited. The broker cannot receive any remuneration or any promise of remuneration from a non-certified individual who acts or attempts to act as a broker or agent.

A broker has a cousin who is an autobody technician. At a family gathering, they chat about their respective jobs. The broker mentions that insureds contact him when they have a car accident and that he helps them start the claims process with their insurers.

The autobody technician suggests that he refer insureds whose vehicles have been damaged to his shop for repairs. In exchange, he offers to pay him $100 for each referral.

The broker agrees, thus putting himself in a conflict of interest since this scheme provides him with a direct benefit: the $100 from the autobody technician. He should have refused and explained that he does not have the right to receive an unauthorized benefit from someone other than the person who retained his services, pursuant to section 143 of the Act respecting the distribution of financial products and services.

Resource: Avis relatif à l’indication de clients en application de la Loi sur la distribution de produits et services financiers Notice regarding client referrals in application of the Act respecting the distribution of financial products and services [in French only]

An agent has a friend who is a sales representative for a luxury car dealership.

The agent asks her friend to systematically send her all his clients. In exchange, she promises to pay him a portion of her commission each time his referral results in an insurance sale.

The agent cannot offer to share the commission she makes on a sale with a non-certified person. However, remuneration can be paid for each client referred, though it cannot be tied to making a sale.

Resource: Avis relatif à l’indication de clients en application de la Loi sur la distribution de produits et services financiers  Notice regarding client referrals in application of the Act respecting the distribution of financial products and services [in French only]

A broker has noticed that his city is home to a number of new condominium buildings. He decides to meet with the director of every syndicate of co-ownership.

He promises them a pair of tickets to a concert given by an international artist if they mandate him to insure their syndicate.

Brokers cannot promise a benefit to obtain a mandate. When meeting with the directors to offer them his services, he should have focused on his expertise and professionalism, without promising them any benefit whatsoever.

An insured receives the renewal notice for his commercial lines insurance. He realizes he needs to make some changes to certain coverages since his needs have changed. He contacts an agent working for his insurer.

The insured and the agent speak several times over the following days, but after that the insured hears nothing more from the agent. He leaves the agent detailed messages concerning the required changes to his coverages. The agent is teleworking and very busy. He does not check his voice mail and therefore does not take note of the insured’s requests for changes or respond to his needs.

The agent should have been available, returned the calls and followed up on his files in a timely manner or ensured that someone else followed up for him to avoid harming the insured.


An insured calls a broker to purchase home insurance. The broker speaks to the insured three times but fails to note the dates of these conversations or summarize any of their discussions, the explanations he gave her or the decisions she made.

When the broker begins sounding out potential insurers, he has no notes to remind him of the details of their conversations; he simply asks the insurer for coverages from memory, without confirming them with the insured.

The broker was negligent. He should have noted in the client-file the details of each discussion in order to ask for appropriate coverages, as requested by the insured.


A broker separates from her husband of many years. Their house is insured with the firm where she works, and both their names appear on the contract.

Her former spouse buys out her share of the house. The broker decides to cancel the home insurance contract without telling him since she is angry with him and knows that he will have to pay a penalty for cancellation during the term of the contract.

The broker has put herself in a conflict of interest by making a unilateral decision that could harm her former spouse. She should have asked for his consent before cancelling the contract, since he might have wanted to keep it, while removing her name as a co-insured and making any other changes required.

A couple plans to buy a new house. They call their broker for a home insurance quothe insure. The broker listens carefully to his clients and advises them about important coverages they should consider.

During the conversation, the broker realizes that the insureds have still not decided on a mortgage lender. The broker also owns a firm that offers private mortgages. He suggests that, in addition to their home insurance, they take out a mortgage with his other company using the excuse that by consolidating everything “under the same roof,” things will be much easier.

The insureds agree to this, and the broker thus earns additional compensation on the file. The broker has put his interests before those of the insureds, knowing that they might have been able to find better financing from another mortgage lender. He should not have suggested an option to the insureds that promoted his own interests.


Division II Duties and Obligations towards the Public

A broker certified in personal lines insurance is managing the home insurance file of a client who has started a small business that he currently operates out of his garage; the client is about to hire two employees.

The broker’s colleague, who also holds personal lines insurance certification, suggests that he discuss the file with a broker certified in commercial lines insurance since this file could push the boundaries of his certification. The broker wants to continue managing the file and asks his colleague to stop policing him.

By refusing his colleague’s suggestion, the broker has acted contrary to the honour and dignity of his profession. He should have supported any measure designed to protect the public by ensuring that he held the necessary certification, or by transferring the file to a representative certified in commercial lines insurance.

The Syndic’s Office receives a complaint against an agent. After conducting an investigation, the Office concludes that the agent committed a technical error and imposes an administrative measure, asking that he change his professional practice. The breach observed would thus not lead to a formal complaint before the Discipline Committee, while the adjustment required would help to improve the quality of services his clients receive.

However, the agent does not want to change his practice, believing that he acted appropriately, and that the client complained without full knowledge of the facts.

Administrative measures are preventive in nature: the agent must correct his professional practice and, if necessary, ask for support from his employer. This adjustment could help him to avoid committing a breach that might lead to more serious consequences both for the client and the agent himself.

Resource : Re-read this article: Consequences

A broker who is very up-to-date on major changes to co-ownership insurance receives a number of calls from worried clients. They are unclear on the extent of their insurance obligations.

LThe broker tells them not to worry, that he is there for them. He will contact them at renewal time. “No worries until then,” he tells them.

The broker should have explained the actions that they could have taken immediately to ensure compliance with the new rules. He should have also mentioned potential impacts on renewing their contracts. After all, he took training on the changes to co-ownership insurance in order to properly advise his clients.

Resources :

An agent has a bad day at work. That evening, he sits down at the computer and decides to vent his frustrations on social media.

He writes a vicious post about his clients and his colleagues. The next day, he learns that several of his clients have called the firm to have their file transferred to another insurer, and his colleagues will no longer talk to him.

The agent behaved rudely. He should have conducted himself professionally and shown restraint. Even under difficult circumstances, he should have acted in a way that promoted healthy interpersonal relations. Furthermore, representatives should always comply with their firm’s internal policies when using social media. Here is some advice on the topic. Remember that even if a social media account is personal, a certified professional must demonstrate professionalism, discretion and moderation in the comments he posts.

Sharpen your skills with the short training activity Au chalet, à l’heure de l’apéro, the third installment of the animated A/T Risques series.

A broker must remove the name of his insured’s former spouse from the contract following their divorce. He meets with the ex-spouse at his office to make the change. After leaving, he realizes that he forgot to have the client sign the request for a change to the contract in order to have his name deleted as a named insured.

To save time and avoid having to call him back, the broker decides to sign the document himself, thinking that it would make no difference since the ex-spouse agreed to have his name removed from the contract.

This is nevertheless a forged signature that falsifies the document; it is a serious breach of ethics. He should have called the gentleman back and tell him that the document would be sent to him for signature.

A broker certified in commercial lines insurance sends all his business clients a Christmas card. In it, he mentions that in addition to their business needs, he is always available to help them find coverage to meet their residential and personal automobile needs as well. He signs the card with the title “damage insurance broker.” Furthermore, he also uses this signature on his welcome and renewal letters.

The broker is not certified in personal lines damage insurance. He therefore cannot manage personal-lines damage insurance files, despite what he indicated on his greeting cards. This is a case of false representation, both with respect to the sector in which he is authorized to practice and his competency level. He should have signed with the title “commercial-lines damage insurance broker.”

Resource : Rules regarding professional cards and other representations, Autorité des marchés financiers.


Division III Duties and Obligations towards Clients

A businessman calls a friend who is certified in personal lines insurance to ask her whether she can write a policy for him to cover his commercial vehicles. The agent responds that it is not a problem, and she will take care of it since she is certified to sell automobile insurance.

Not only does this certification not exist, but the agent is not certified in commercial lines insurance, which is required to insure commercial vehicles used to transport merchandise.

Before accepting this mandate, the agent should have taken into account the limits of her abilities and knowledge and referred the file to a colleague who holds a certificate in the correct sector and has the necessary skills to insure commercial transport vehicles.

An insured calls an agent for a car insurance quote. The agent collects all the relevant information to analyse her needs.

At the end of the call, the insured mentions that she has also received an online quote from another insurer and that its quote was much better. The agent responds that he is quite familiar with this insurer and that even though the premium seems much lower, it will jump by at least 5% when she calls to finalize the agreement. He also tells her that the coverages he proposes are far better and that she would do well to accept his contract offer and not call the other insurer back.

Agents should not advise insureds against consulting other insurers for a quote. This agent should have told the insured that she had the right to compare the two quotes and make an informed choice by analyzing the coverages offered, the terms of the contract and the amount of the premiums.

An insurer offers its agents a sales incentive: for every Q.P.F. no. 5 sold, the agent will receive a $25 commission.

One of the firm’s agents is excited about using this incentive to help fund her travel plans down south. She systematically offers Q.P.F. no. 5 to every client she speaks to. Furthermore, she decides not to mention Q.E.F. no. 43 or compare the two products.

This agent has put her interests before those of her insureds. She should have offered the proper coverages to meet her insureds’ needs.

A broker has worked many hours on an insured’s contract cancellation file. He gets the cancellation date wrong, which decreases the insured’s reimbursement.

When the insured receives his reimbursement, he contacts his broker for an explanation since he was expecting much more. The broker wrongly tells him that the reimbursement is consistent with the insurer’s normal practice.

The broker tried to evade his professional responsibility—a serious breach of his ethical obligations. He should have contacted the insurer in order to correct his mistake and send the insured the reimbursement as soon as possible.

An insured is finalizing the purchase of home insurance with a broker. At the end of the discussion, the broker tells him that a fee of $200 will be added to his $600 premium in compensation for arranging to have the insurer issue the contract.

The insured is surprised and displeased. The broker explains that he bills these fees every time, no matter what the file’s degree of complexity.

The compensation the broker requested is not reasonable, given the services rendered. Nothing justifies such fees since the file was a relatively straightforward personal-lines damage insurance contract. The broker must adjust his fee schedule to take into account factors such as his experience, the difficulty of the case, and the amount of time spent on it.

Resource : Read this article: Honoraires et frais divers : quand faut-il en informer le client? [Fees and other costs: when do you need to inform the client? in French only]

An agent spends a long time on the phone with an insured, explaining the clauses in her replacement insurance contract (Q.P.F. no.5). Satisfied with the explanations, the insured announces that she would like to add this product to her automobile insurance contract. The agent informs her that the product costs $1,100 but fails to tell her that the financing company will add further fees if she decides to spread her payments over several months.

A few days later, the insured receives the documents and notices that the product will cost her $1,500 over five years, instead of the $1,100 the agent had indicated.

Agents must inform their insureds beforehand of all costs in addition to the premium that they are billed. The agent should have called the insured to explain the situation to her.

A broker has a large client-base from a particular cultural community and earns high commissions from the insurer he uses for these clients. Following a change in the insurer’s underwriting standards, the broker decides to transfer his insureds’ contracts to another insurer.

Without their authorisation, he sends the insureds’ automobile insurance and banking information to the new insurer, thus using this information for purposes other than those for which it was obtained.

The broker did not respect the confidentiality of the insureds’ personal information. He should have obtained his clients’ consent before sharing their personal information.

The owner of an apartment building investigates one of his tenants to find out whether this tenant is having financial difficulties. The tenant did not pay his rent the previous month and the landlord is trying to evict him. Since the landlord and the tenant do business with the same broker for their home insurance, the landlord decides to contact her.

The broker sympathizes with the landlord and decides to help him out. She discloses to the landlord that the tenant has indeed defaulted on his insurance payments and that his insurance contract is about to be cancelled.

The broker failed to comply with her professional responsibilities: she cannot disclose personal information on an insured or his file to a third party without the insured’s consent. She should have refused to disclose this information to the landlord or obtained the tenant’s consent to do so.

A broker is working on a client-file that is affected by difficult market conditions. The insured is a businessman who frequently uses his vehicle out of province.

The broker informs the insured that he will approach an insurer who, in his experience, insures this type of risk at a reasonable cost, and immediately confirms with the insured that he will be able to place this risk. However, the insurer refuses.

The broker feels uncomfortable calling the insured back to announce the bad news and decides to approach other insurers without telling the insured.

The broker should have been more transparent with his insured and told him about the insurer’s refusal and the steps he was taking to remedy the situation.

Resource : Re-read this article: It’s a hard market. What’s a broker to do?

An insured calls her broker of many years to tell him that in two weeks she will be buying a new, high-end vehicle. The broker notes all the information required to insure the new vehicle.

However, the insurer refuses the risk since it does not insure this type of vehicle. Feeling embarrassed, the broker waits until the last minute to tell his long-time client about the situation.

The broker has harmed the insured, who is about to pick up her new, yet-to-be-insured vehicle the next day. He should have called the insured as soon as he realized that he would be unable to continue his mandate, in other words, when the insurer informed him that it refused to accept the risk.

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A businessman talks to his accountant, who tells him that the business should shop around for its insurance contract to try and find better coverages and a more reasonable premium. Although the business owner has been dealing with the same insurer since he first opened his business 20 years ago, he takes his accountant’s advice to heart and begins the search.

He contacts an agent at his insurance company and asks for a copy of his file containing the insurance contract, the endorsements and the schedule of payments in order to show this information to another broker. The agent refuses, under the pretext that the file belongs to the insurer.

The agent has an obligation to give the insured his documents without delay when he asks for them, even if the contract is still in force and an outstanding balance remains to be paid to the insurer.


Division IV Duties and Obligations towards Insurers

A broker issues an automobile insurance contract on an insurer’s portal.

In order to obtain a contract with the best conditions possible, he decides to not declare that the insured’s previous contract was cancelled by the insurer for non-payment of the premium.

The broker should not have hidden this important fact and acted unfairly towards the insurer. This situation could harm the insured if, for example, the insurer were to later discover the truth. Among other things, in the event of a loss, the insurer could decide to partially compensate the insured, or not compensate him at all.

A broker obtains a quote to insure a trailer and contacts the insureds to send them the insurer’s offer. They accept and tell the broker that they will send him a cheque for $325 to cover the premium.

The following week, the broker receives the cheque, but neglects to forward it to the insurer. A few weeks later, the insureds receive a notice of non-payment from the insurer although they have indeed paid the bill.

The broker was negligent. He should have forwarded the cheque as soon as possible; he had no legitimate excuse to justify why he did not send it to the insurer.

A broker collects information and analyzes the client’s home insurance needs.

The client answers all the questions truthfully and states that he has a wood stove in the basement and a chicken coop outside. In fact, he keeps three laying hens in his yard. When the broker sends the information to an insurer, he mentions the wood stove, but intentionally fails to mention the hens and the chicken coop. He suspects that the insurer will no doubt ask questions and that this is likely to have an impact on whether or not the risk is accepted.

The broker should have sent the insurer this information: not only was it an obligation towards the insurer, but such information would have allowed the insurer to assess the risk and thus would have influenced its decision to accept or refuse the risk.

Furthermore, the insurer could have subsequently discovered the actual situation, and this could have resulted in serious consequences for the insured. For instance, in the event of a loss, the insurer could decide to partially compensate the insured, or not compensate him at all.


Division V Duties and Obligations towards Representatives

An insured contacts an agent for the first time to obtain an automobile insurance quote. The agent collects all the necessary information and tells him that the annual premium for his contract will be $800.

The insured tells the agent that he wants to explore the possibility of purchasing insurance from a broker. The agent responds that coverages purchased through a broker are often less advantageous and the premiums are higher than those of a direct insurer.

The agent should not have made untruthful comments about another firm.

An insured contacts his broker since he has just bought a new vehicle. The broker confirms the changes and notifies him that he will receive the documents shortly. When he receives the documents, the insured notices that the vehicle named in the contract is incorrect. He calls the broker back, but the broker is absent, so he speaks to a colleague.

The colleague attends to the file and advises the insured to no longer contact his regular broker since, in her opinion, he is both inexperienced and incompetent.

The broker should not have denigrated her colleague. She should have simply dealt with the file and made the corrections without saying such things and discrediting her colleague.

A broker is dealing with a difficult automobile insurance file since the client has made a number of claims in recent years.

The broker would like to transfer the file to another broker (a wholesaler) who specializes in this type of non-standard risk. He contacts the broker, but only tells him about four of the six claims in the insured’s file and neglects to mention that the engine in the insured’s car has been modified.

In this case, the broker has abused the good faith of the other representative. He should have sent him all the relevant information on the insured so that the other broker could do his work with full knowledge of the facts.

A broker has worked for the same firm for almost 30 years. Due to a disagreement with his associate, he decides to leave the firm to work elsewhere.

Furious to see him go, the associate files a complaint with the Syndic’s Office, alleging that the broker does not take good care of his clients and neglects to properly evaluate their needs.

The associate lacked professionalism and should not have made a malicious accusation against the broker, which was intended to cause him serious harm.


Division VI Duties and Obligations towards the Autorité des marchés financiers and the Chambre de l'assurance de dommages

An agent is the subject of a complaint filed with the Syndic’s Office of the ChAD. The investigator assigned to the file tries to contact him by phone to ask him to answer some specific questions and send him documents related to the file in question.

The agent does not answer his calls. The investigator leaves two further messages in his voice mailbox and sends him a letter asking him to contact the Syndic’s Office. Despite all the investigator’s efforts, the agent does not respond to his requests, which impedes the Syndic’s Office’s investigation.

The agent should have called the investigator back without delay, answered his questions in good faith, and sent all the documents requested.

Resource : Read the Frequently asked questions page [in French only] on how complaints are processed.

An agent who is the subject of a complaint filed with the Syndic’s Office is summoned to a meeting with an investigator.

The agent is extremely nervous about the complaint process and fails to attend the meeting.

The agent has shown a lack of cooperation with the Syndic’s Office, which is tasked with protecting the public, as stipulated in the Act respecting the distribution of financial products and services. The agent has a duty to attend any meeting called by the Syndic’s Office.

Resource : Read the Frequently asked questions page [in French only] on how complaints are processed.

A broker is the subject of numerous complaints to the Syndic’s Office. The broker systematically refuses to cooperate with any investigation. The size of the file and the evidence the Syndic presents are so compelling that the ChAD’s Discipline Committee orders the immediate temporary cancellation of the broker’s certificate during this preliminary stage of the investigation.

The investigation continues, but the broker persists in refusing to cooperate following the cancellation. He fails to provide the documents and information the Syndic’s Office needs to pursue its investigation, despite numerous written and verbal requests from the investigator. He even goes as far as to destroy certain pieces of evidence.

The broker should have cooperated and sent in all the requested documents and information.

Resource : Review this page: The Role of the Discipline Committee..

An agent has managed an insured’s file for over ten years. He has always been conscientious and careful to provide her with good service. Despite this, the insured files a complaint against him with the Syndic’s Office since she feels she was wronged during her last contract renewal.

When he learns of the complaint, the agent feels deeply disappointed; he would have preferred that she contact him directly rather than going through the ChAD. He therefore decides to call her and explain to her why he feels he did nothing wrong with respect to her file; he also takes this opportunity to ask her to withdraw her complaint. However, in doing so, the agent has applied undue pressure on the insured.

The agent should have cooperated with the investigation and continued to serve the insured without discussing the complaint with her or applying any undue pressure. If he was unable to continue to manage the insured’s file, he should have transferred it to another agent.


Division VII Breaches of the Code of Ethics

This section deals with the damage insurance representative’s obligation to protect, through his good conduct, the image of the profession and the opinion the public may hold of the profession. It enumerates a number of situations where the representative would be considered to have acted contrary to the honour and dignity of the profession. The honour and dignity of the profession can be defined as its respectability. “Including” means that the list of breaches is not exhaustive. A representative can therefore be the subject of a complaint for actions contrary to the honour and dignity of the profession without the actions appearing in this section.

Story 1 : Dishonesty

An agent learns that her brother is in dire straits, having lost his job only a few weeks after his spouse gave birth to twins. The agent tries to find a quick way to help him out financially.

Since she is the treasurer of her firm’s social committee, she decides to dip into the fund and takes $2,500 to give her brother.

The agent has acted dishonestly. She should not have taken money entrusted to her in the workplace to use for personal reasons. This is a serious violation of her ethical obligations.


Story 2 : Negligence

An agent is going through a challenging time in her personal life and has trouble concentrating on her work. She rarely makes notes in the client-file about the conversations she has with insureds.

An insured calls the agent to tell her that she has had a new radio installed in her car as well as a more powerful engine, so that the agent can notify the insurer of these changes, which may have a significant impact on the risk assessment and the premium. The agent, having failed to note the insureds requests in her file, declares the new radio to the insurer, but forgets the changes to the engine.

The insured has an accident, and the vehicle is deemed a total loss; however, the insurer refuses to compensate her for the full value of the new engine since it had not been declared. To avoid performing her duties negligently, the agent should have been more thorough in her note taking.

An agent falls off his bike and suffers a concussion. His doctor recommends he take sick leave since he is suffering from symptoms that include frequent headaches and dizziness.

The agent does not disclose his medical condition to his employer and continues to work. In addition, his manager asks him to supervise an intern, which he agrees to do. In the following weeks, his post-concussion symptoms worsen, and the agent starts mixing up his files, fails to correctly explain coverages to his insureds and neglects to properly answer his intern’s questions.

The agent should have followed his doctor’s advice and not worked while suffering from a health issue that compromised the quality of his services.

A broker receives a call from one of his clients who wants to insure his seventeen-year-old daughter’s vehicle. She knows nothing about insurance and the father prefers to take care of things himself.

The broker asks him a series of questions about the vehicle and his daughter’s driving experience and then suggests coverages. The father mentions to the broker that coverage B2 (collision or upset) will not be necessary since the vehicle is old and the premium for this coverage is too high. The broker follows the father’s instructions and completes the sale.

The broker should not have allowed the father to make decisions for his daughter; it was her vehicle, and she was the named insured on the contract. The broker should have informed the father of the situation and asked to speak to his daughter to give her his advice, discuss available options and finalize the contract with her. It is also possible that the father did not actually know everything about his daughter’s driving record. For instance, she might have hidden a fine for dangerous driving from him. Brokers must therefore discuss the contract directly with the named insured, no matter what their age.

A broker receives a notification from an insurer explaining that it will no longer underwrite a particular type of risk and that it will therefore not be renewing a contract scheduled to expire in three months. The broker calls her client to notify him and tells him that she will have no trouble finding another insurer to underwrite the risk.

After contacting a number of insurers and with only three weeks left before the contract expires, the broker has still not found a contract for this type of risk.

She therefore contacts the insured to inform him of the situation. The insured is angry and tells her that he is in a very risky situation since he has little time left to consider other options.

As soon as the situation became clear, the broker should have informed the client of the steps she had taken, and which insurers had refused to underwrite the risk. She should have given the insured more time to explore other options.

Resources :

A commercial lines broker has to renew a contract; the premium will increase significantly given the fact that the insurer has paid compensation for two losses in the past year.

The broker informs the company’s financial controller of the new conditions as well as the premium. The controller tells the broker that he would like to use a financing company to spread the premium payments over several months. The broker makes the necessary arrangements and prepares the financing contract. To avoid any delay in issuing the renewal, he decides to forge the controller’s signature and sends the contract to the financing company. “After all,” he tells himself, “it’s the controller who chose this payment option.”

This action is dishonest and can sully the image of the profession. The broker should have sent the contract to the controller for signature and explained the potential consequences if it was not signed quickly.

An insured is about to buy his first home. He contacts his broker for a home insurance quote. The broker collects all the necessary information and tells him that he will call back shortly with offers from insurers in his network.

Two days later, the broker calls the insured back and tells him that he has found a quote that provides coverages to meet the insured’s needs at a reasonable premium. The insured asks a few questions to find out further details, but the broker merely gives him a quick overview of the coverages included in the contract.

A few months later, the insured’s new house suffers water damage due to a sewer backup. When he begins the claims process, the insurer informs him that he will not be compensated since his contract does not include an endorsement for sewer backup.

In order to advise the insured properly and meet his needs, the broker should have given a detailed explanation of the main coverages and exclusions in the contract, as well as the most commonly available endorsements.

Resource : Re-read this article: Listen carefully, advise properly.

At renewal time, an insured who owns a gas station asks her broker to increase her civil liability coverage from $500,000 to $1,000,000 to include pollution risk.

The broker immediately sends the insured an insurance binder that falsely states she has $1,000,000 in civil liability coverage that includes pollution risk. However, the limit in the contract remains at $500,000 since the insurer refused to increase it.

The broker should have told the insured that he first had to contact the insurer to find out whether it would agree to increasing coverage before he issued the insurance binder, which turned out to be misleading.

Resource : Review the page on insurance binders.

A broker receives $2,000 in cash from an insured in payment for his insurance premium. .

The broker, who enjoys gambling, decides to use the cash to gamble at the casino, telling himself that he will reimburse the money later with his winnings. In so doing, he has acted dishonestly.

Using money for a purpose other than that for which it was received is an act that is contrary to the honour and dignity of the profession. The broker should have followed his firm’s instructions and deposited the money as soon as possible.

In the wake of an inspection, an insurer makes a serious recommendation concerning a residence that a broker has insured: the staircase leading to the front balcony must be repaired since it poses a risk of injury and therefore increases the potential for a civil liability claim.

The broker sends the report with the recommendation to the insured, asking for his signature once the work has been completed. He follows up several times but receives no answer. Contract renewal time arrives, and the broker must send the signed report to the insurer confirming that the work has been done. Otherwise, he will have to place the risk with another insurer.

Since he has still not received an answer from the insured, the broker forges his signature and confirms with the insurer that the repairs were done. He believes that by stalling a bit longer, he will succeed in contacting the insured and convincing him to do the work quickly, if it has not already been done.

This false statement is contrary to the honour and dignity of the profession. The broker cannot submit a document that he knows to be false in order to facilitate his own work. He should have notified the insurer and tried to obtain an extension or begun taking steps to place the risk with another insurer while keeping the insured up to date on his actions.

An insured contacts a broker with whom he has never done business to purchase automobile insurance. He immediately makes it clear that he is dissatisfied with his current insurer and does not want a contract with this insurer. He asks her to place his risk with another insurer. .

The broker accepts the mandate without revealing to the client that his current insurer, with whom he no longer wishes to do business, is a shareholder in the firm where she works.

The broker should have disclosed her business relationship with the insurer as soon as she received the request for a quote and before the insured purchased a contract, even though she did not place the contract with this insurer.

An agent contacts an insured to update his file before renewing his home insurance contract. One of the things she would like to discuss is the hot water tank, which was installed about 12 years ago.

Since the insurer requires that tanks be less than 10 years old, the agent encourages the insured to sign a document confirming that he changed his hot water tank a few months ago, although she knows he has no intention of doing so.

The agent should not have encouraged the insured to make a false statement to the insurer. She should have taken the time to explain to the insured how important it was to change the hot water tank and what the consequences of not doing so would be.

A firm director is short-staffed; two of his brokers are on sick leave. He uses a non-certified employee to take care of requests for changes and contract cancellations.

The non-certified employee gives insureds information, listens to their needs, advises them and drafts contract cancellation requests that she sends to the insurers.

The manager should have entrusted these tasks to a certified professional.

A commercial-lines damage insurance broker wants to boost his income for the year.

He targets one of his clients, a large business, which he decides to bill for professional fees that he did not render. He sends three invoices for $150, $250 and $125 respectively, believing that the accounting department will not investigate such insignificant amounts.

The broker has acted contrary to the honour and dignity of the profession by fabricating false invoices for services that were never rendered.

A newly certified agent finds a job with an insurer that expects her to be a high performer and reach her sales targets.

When insureds call her for a quote and mention that they are shopping around, the agent tells them that asking for several quotes can negatively impact their credit file. She then pressures them to accept her offer so they can avoid affecting their credit score. The insureds feel cornered, and many sign a contract with her.

The agent is acting contrary to the honour and dignity of the profession. Claiming that asking for several quotes has a negative impact on the credit file was untrue and put undue pressure on insureds to use her professional services. The agent should have listened and advised the insureds and focused on her own expertise when offering them coverages to meet their needs.