ribo bulletin - spring 2016

SPRING 2016 • Volume 45 • NO. 147

REGISTERED INSURANCE BROKERS OF ONTARIO

B U L L E T I N

As I sit here in my office in Belleville andput pen to paper (or rather type ontomy computer screen) I am looking out

at a winter wonderland in mid-February. It re-minds me that we are privileged in Ontario tobe part of a landscape that changes every fewmonths into a new season each with its prom-ise of renewal and progressive challenges to beovercome.

It brings to mind that RIBO, the professional in-surance brokers regulatory body is constantlyassessing and renewing its commitment to themember brokers and the public at large.

It is important to rememberthat RIBO, in the brokeragecontext, stands alone inCanada as a self-regulatory,non-government organiza-tion that has the power tocreate and enforce industryregulations and standards.The priority is to protect the public and follow itsstatutory mandate that promotes ethics andprofessional standards that are second to nonein the insurance industry.

I have often heard from many people that RIBOis the gold standard in the execution of its duties and responsibilities.

We are privileged to have this degree of self-reg-ulatory freedom in an age when nothing is cer-tain except further change. I am also veryencouraged to see that new applications tobecome licensed brokers and sit the qualifica-tion examinations are at the highest level in our35 year history and this bodes well for the futureof independent brokers. The professional obligations of brokers are being embraced bythe millennials and digitally trained generation.

As we move forward we must continue to effec-tively communicate with brokers and the pub-lic. RIBO has recently commented and postedbulletins on evolving industry issues such asnegative option billing, auto reform and fraud

detection and prevention.The use of social media tocommunicate with clients hasbeen commented on in re-cent postings.

It is also important that RIBOcontinues to evolve and em-brace technological change

in order to deliver state of the art platforms tothe membership with respect to licensing, reg-istrations, renewals, examinations and the elec-tion of Council. A number of exciting newinitiatives in these areas are already underwayat the time of this writing.

As a final note, please remember that RIBO staffare always available to answer your questionsor inquires. Should you have any concernsabout your professional responsibilities, staff willalways provide a prompt and informed re-sponse to your queries.

I look forward to meeting or speaking with themembership over the coming months aboutthe issues of the day.

IN THIS ISSUE2 Message from the CEO

3 Qualification & Registration Committee Report

3 Announcement

4 Fee Disclosure

5 Premium Quotations

5 Decisions of the Discipline Committee

7 Additions & Deletions

7 Council Directory

8 Staff Directory

NORMA HITCHLOCK

PRESIDENT’S MESSAGE

DISCLAIMER: This publication includes information which is designed to heighten awareness of and minimize the risk of non-compliance with RIBO and other legislative requirements. The materialpresented does not establish, report or create the standard of care for brokers nor is the material a complete analysis of any of the topics covered. Readers should conduct their own due diligence,including where appropriate, seeking legal counsel with respect to their specific responsibilities.

…RIBO is the gold standard in the execution of its duties and responsibilities.

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BULLETIN SPRING 2016 • Volume 45 • NO. 147

PATRICK BALLANTYNECEO

Message from the CEOOn January 1st I took over management of the Registered Insurance Brokers of Ontario. My predecessor, Jeff Bear, left behind not only a legacy of regulatory excellence but files full of RIBOhistory dating back over 35 years. I spend a few minutes every day reviewing one stack at atime. There are documents prepared by RIBO founders, correspondence between governmentleaders of the day…all which pre-date the incorporation of RIBO. What is clear is the amount ofhard work…of back and forth, give and take…and ultimately the confidence in the broker profession…that ultimately led to the creation of your self-regulatory organization (SRO).

I began my career many years ago at the Law Society of Upper Canada, one of the most well-known and long established SROs. It was back then that I learned a few things that, to this day,are supremely important in my day-to-day activities at RIBO. Firstly, an SRO must strive to maintainits reputation for fairness. How it treats its membership is very important, yes, but its very legitimacystems from how well it treats the public. It must not only act in the interest of the public but mustbe seen to do so. If ever there is a perception that an SRO is protecting its own, the privilege ofself- regulation is at risk.

That leads me to my next point. Our core activities at RIBO are spelled out in statute:

• register brokers who meet the established standards,

• investigate all complaints received, and

• conduct discipline and qualification hearings in accordance with the rule of law.

We also provide guidance to the members on compliance with the Act and Regulations, especially regarding the Code of Conduct and financial requirements. While these activities arefairly straightforward, they can impact to a greater or lesser degree on your ability to practice yourprofession. We must always be sensitive to that fact. We must limit your ability to practice your profession only within a framework of fairness, and where to do so is clearly in the public interest.

Ultimately, within RIBO, the actions of a broker will be reviewed by other brokers. Along with ourpublic members, it is brokers who will determine whether conduct falls within acceptable standards. As mentioned above, that is the great privilege of self-regulation but it comes withgreat responsibility.

Finally, I learned that an SRO, just like any business, must communicate effectively with its stake-holders. In this era of constant connectedness, I will seek out creative ways to do that. That said,communication must go both ways. While it is our duty to administer the RIB Act, we need to understand how our actions and proposals impact the membership. I encourage you to reachout to RIBO staff and to me directly if you have any questions or comments about our activities.

I am greatly excited about my new role and am grateful for the confidence Council has shownin me. Along with all RIBO staff, I will continue to work to maintain your confidence by administeringthe Act in the interest of the Ontario public. Remember...RIBO’s role is not to advocate forbrokers...you have able, active and creative trade associations working hard on your behalf. I believe, however, that if RIBO continues to do our job well, that will send a strong message aboutthe competence and professionalism of our members.


Committee Report

Qualificationand Registration

With the milder winter this year, I hope that spring and warm weatheris just days, rather than weeks, away. It will be nice to finally be ableto put those heavy coats, gloves, hats and scarves away.

We are often asked “how does someone whois registered show that they are licensed underRIBO?”. The Registered Insurance Brokers Act,Section 3(2) states that individuals registeredunder the Act are able to use the designation“R.I.B. (Ont.)” or “C.A.I. (Ont.)”. Consumers arealso able to verify an individual’s registrationby checking the RIBO website.

During the last three months we reviewed 76 requests for secondary business exemptions.The exemption breakdown was as follows: 6 individuals were granted exemptions to sell financial products, 69 individuals were grantedother secondary business exemptions and 1 was refused a secondary business exemption.

If you require any assistance or have any ques-tions, please do not hesitate to contact us.TRACY MCLEAN

CHAIR

ANNOUNCEMENTWe are very pleased to announce that John Goldsmith has joined us as RIBO General Counsel on January 1, 2016. John has worked closely with RIBO for almost 25 years as our Outside Counsel. We are excited to have John join us.

JOHN GOLDSMITH

Fee DisclosureBrokerages may contemplate charging their clients a fee for servicein addition to the commission they receive. The decision to charge afee is entirely up to the member.

The member’s obligation is to provide full disclosure so that its client(s) can make an informeddecision regarding its reasonableness and consequently deciding to do business with the mem-ber or not. The Registered Insurance Brokers Act (“RIBA”) and specifically Section 12 of Regulation991 provides;

Where a member proposes to charge a fee for service in addition to retaining a portion of the premium charge, themember before placing the insurance or providing a service for which a fee is to be charged shall disclose to the personwhom the member proposes to charge the amount of the fee,

the portion of the premium retained and thetotal remuneration on the transaction.

Transaction means any of the transactions a member can invoice; renewal, new business, en-dorsement and cancellation.

In addition please refer to “RIBA” Section (14) paragraph (8) of Regulation 991 (“Code of Conduct”) for guidance, which provides;

A member shall not stipulate charge or accept any fee that is not fully disclosed, or the basis for which is not fully disclosed prior to the service being rendered,

or which is so disproportionate to the service provided as to be unconscionable.

Please note it is an act of misconduct not to fully disclose a fee, not to disclose the fee prior to theservice being rendered or to charge a fee that is so disproportionate to the service provided as tobe unconscionable.

In addition the member must provide the details to the client(s) specifically and not just providea commission rate and the fee and let the client calculate this figure. As an example full disclosureon an auto policy with a premium of $1,000.00, a fee of $75.00, and a commission of 12.50% wouldbe as follows:

Premium $1,000.00Fee $75.00HST $9.75Total owing $1,084.75

Commission $125.00Fee $75.00Total Remuneration $200.00

Please note if you charge a fee HST may be applicable at 13%. We recommend that you con-tact the Canada Revenue Agency as every circumstance may be different. Please contactwww.cra-arc.gc.ca/gsthst reference Gst/Hst Memorandum 17.9 – Insurance Agents and Bro-kers, RC4022 – information for registrants, and 1-4 Excise & Gst/Hst –Rulings or call 1-800-959-8287. Please note; the Facility Association does not permit a member to charge a broker feeover and above the Facility Association premium.

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DECISIONS OF THE

DISCIPLINE COMMITTEECAUTION While the information contained below is public,

members should take caution that inappropriate useof this information may be considered to be an act of misconduct.

Brown Insurance Brokers (Palmerston) LimitedRegistration Number: A00275Palmerston, Ontario

Jeremy Paul Thomas BrownRegistration Number: R20176Thunder Bay, Ontario

HEARING DATE: December 10, 2015

MISCONDUCT:Ontario Regulation 991, ss 15(1)13, 16(4)1, 4.1 and 4.2, 5 and (6)

PARTICULARS OF THE COMPLAINT:

Brown Insurance Brokers Ltd. (hereinafter referred to as “Brown Insurance”) has operated in anet trust deficit position as determined by RIBO staff in their investigation. They also failed tomaintain, at all times, in its trust account moneys and trust investments that are sufficient, together with trust funds receivable, to meet all its trust obligations.

DISCIPLINE COMMITTEE’S DISPOSITION

The Discipline Committee accepted the plea of guilty of Jeremy Paul Thomas Brown andbased on the evidence adduced by RIBO in support of the plea of guilty found that JeremyPaul Thomas Brown and Brown Insurance are guilty of misconduct as alleged in the Direction.The Discipline Committee, therefore, ordered:

(a) That the brokerage file monthly position reports in Form 1 showing full compliancewith Sections 16(4), Subsection 1, Subsections 4.1 and 4.2 and Subsections (5) and(6)(a)(b) and (c) of Ontario Regulation 991 for a period of one year, commencingwith the month ending November 30, 2015 and thereafter as at December 31, 2015,January 31, 2016, February 29, 2016, March 31, 2016, April 30, 2016, May 31, 2016, June30, 2016, July 31, 2016, August 31, 2016, September 30, 2016 and October 31, 2016.These reports are to be accompanied with the following verifying financial attach-ments; internally generated balance sheet, income statement, summary page of theaged premium receivable listing, copies of the original bank statements of the trustand general accounts and the corresponding reconciliation statements and anyother working paper that verifies a balance that differs with a system generated bal-ance. Should these financial attachments not be applicable to this brokerage, thenRIBO and the broker will agree on what these verifying financial attachments will be.These reports are to be in RIBO’s offices 30 days after the respective month end.

RIBO would like to stress the importance of informing your clientsat the time of providing a quote that the premium quoted maybe subject to change once the insurance company completesits underwriting. Brokers should also inform the client of what factors may prompt a change in premium from the originalquoted premium.

When a client has requested a mid-term change to an existingpolicy, the broker should also make clear that the quoted premium for the policy change is an estimate only and may besubject to adjustment by the insurance company. Brokers arealso encouraged to keep proper file documentation at all times,not only with respect to premium quotations and disclaimers,but for all client communications and file activities.

PREMIUM QUOTATIONSRIBO has received an increasing number of complaints from the public with respect to premium quotations.


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(b) That the brokerage shall subsequently file quarterly position reports in Form 1 showingfull compliance with Sections 16(4), Subsection 1, Subsections 4.1 and 4.2 and Sub-sections (5) and (6)(a)(b) and (c) of Ontario Regulation 991 commencing with themonth ending December 31, 2016, and thereafter as at March 31, 2017, June 30, 2017and September 30, 2017. These reports are to be accompanied with the followingverifying financial attachments; internally generated balance sheet, income state-ment, summary page of the aged premium receivable listing, copies of the originalbank statements of the trust and general accounts and the corresponding reconcili-ation statements and any other working paper that verifies a balance that differs witha system generated balance. Should these financial attachments not be applicableto this brokerage, then RIBO and the broker will agree on what these verifying financialattachments will be. These reports are to be in RIBO’s offices 30 days after the respec-tive month end.

CONSENT BEING RECEIVED IN THE FOLLOWING MATTER, THE DISCIPLINE COMMITTEE MADETHE FOLLOWING ORDER:

Earl Shaw Insurance Brokers Ltd. Registration Number: A1963Kingston, Ontario

Christopher ShawRegistration Number: R18269Kingston, Ontario

HEARING DATE: December 10, 2015

MISCONDUCT:Ontario Regulation 991, ss. 16(4)1, 4.1 and 4.2, 5 and (6), and 17(2)(d) and (5)

PARTICULARS OF THE COMPLAINT:

Earl Shaw Insurance Brokers Ltd. (hereinafter referred to as “Shaw Insurance”) has operated in a nettrust deficit position and that the brokerage has failed to maintain accounting books and records inaccordance with the Regulations as determined by RIBO staff in their investigation. They also failed tomaintain, at all times, in its trust account moneys and trust investments that are sufficient, together withtrust funds receivable, to meet all its trust obligations.

The Discipline Committee approved a consent agreement between Christopher Shaw on behalf ofShaw Insurance and RIBO, and ordered:

(a) That Shaw Insurance shall file with RIBO, monthly position reports in Form-1 showing fullcompliance with Section 16(4), 4.1 and 4.2, 5 and (6), 17(2), (2)(d) and (5) for a pe-riod of one year commencing with the month ending October 31, 2015, and there-after as at November 30, 2015, December 31, 2015, January 31, 2016, February 29,2016, March 31, 2016, April 30, 2016, May 31, 2016, June 30, 2016, July 31, 2016, August31, 2016 and September 30, 2016. These reports are to be accompanied with the fol-lowing verifying financial attachments; internally generated balance sheet, incomestatement, summary page of the aged premium receivable listing, copies of the origi-nal bank statements of the trust and general accounts and the corresponding recon-ciliation statements and any other working paper that verifies a balance that differswith a system generated balance. Should these financial attachments not be appli-cable to this brokerage, then RIBO and the broker will agree on what these verifying fi-nancial attachments will be. These reports are to be in RIBO’s offices 30 days after therespective month end.

(b) That Shaw Insurance shall subsequently file with RIBO, quarterly position reports in Form-1 showing full compliance with Sections 16(4), 4.1 and 4.2, 5 and (6), 17(2), (2)(d) and(5) for a period of one year commencing with the month ending December 31, 2016and thereafter as at March 31, 2017, June 30, 2017 and September 30, 2017. These reports are to be accompanied with the following verifying financial attachments; internally generated balance sheet, income statement, summary page of the agedpremium receivable listing, copies of the original bank statements of the trust and general accounts and the corresponding reconciliation statements and any otherworking paper that verifies a balance that differs with a system generated balance.Should these financial attachments not be applicable to this brokerage, then RIBO and the broker will agree on what these verifying financial attachments will be. These reports are to be in RIBO’s offices 30 days after the respective month end.


ADDITIONS & DELETIONS FROM THE RIBO REGISTER

A D D I T I O N S D E L E T I O N SRibo No. Broker City

3874 Special Risk Insurance Managers Ltd. Langley

3875 Jarrett Thompson Insurance Nepeanand Financial Services Inc.

3877 Linx Underwriting Solutions Inc. Toronto

3878 Paib Insurance Inc. Timmins

3888 Praesto Presto Limited Toronto

3897 Rivard Assurances Generales Inc. Rouyn-Noranda

3898 Hiig Underwriters Agency (Canada), Ltd. Toronto

3899 Arag Services Corporation Toronto

3900 Alliance Income Insurance Corp. Vaughan

3903 Risk Balance Inc. / Risque Equilibre Inc. Ottawa

3904 Diamond Insurance Group Inc. Caledon

Ribo No. Broker City

70 F.R. Appleton Insurance Broker Limited Belleville76 Bush-Armstrong Insurance Brokers Ltd. Morrisburg187 Bickerton Brokers Ont Ltd. Gananoque378 Casey Robertson Insurance Brokers Limited Toronto786 Gellatly Insurance Limited Toronto839 George A. Grant Insurance Brokers Ltd. Napanee960 James J. Hickey General Insurance Limited Deep River1646 O’shaughnessy Limited Bancroft1702 Gerald I. Patterson Insurance Brokers Paisley1712 Gary Pearson General Insurance Brokers Ltd. Pembroke1807 Raymond Assurance Sudbury2298 Ten Star Insurance Brokers Inc. Waterdown2552 DLK Insurance Brokers Ltd. Brockville2715 Dagmar Insurance Brokers Limited Concord3254 Bruyere Insurance Brokers O/B 2114910 Ontario Limited Morrisburg3739 Price Group Programs Ltd. Toronto3810 Triquest Solutions Inc. Toronto

DECEMBER 1, 2015 – FEBRUARY 29, 2016

COUNCIL DIRECTORYRegistered Insurance Brokers of Ontario

PRESIDENTNorma HitchlockMarsh Insurance Limited199 Coleman StreetP.O. Box 75Belleville, ON K8N 4Z9Tel: (613) 969-7006 Fax: (613) [email protected]

VICE-PRESIDENTTracy McLeanMoore-McLean Insurance Group Ltd.48 Yonge StreetSuite 900Toronto, ON M5E 1G6Tel: (416) 364-4000Fax: (416) [email protected]

TREASURERJohn GelstonHUB International HKMB Limited595 Bay Street, Suite 900Box 81Toronto, ON M5G 2E3Tel: (416) [email protected]

SECRETARYPatty CrawfordCrawford & Danyluk Insurance Brokers Limited2681 Gideon Drive, Box 100Delaware, ON N0L 1E0Tel: (519) 652-3201Fax: (519) [email protected]

Scott BellAP Insurance Brokers Inc.1423 Upper OttawaStreet, Unit 11Hamilton, ON L8W 3J6Tel: (905) 389-2822 Fax: (905) [email protected]

Peter BlodgettDarling Insurance & Realty Ltd.193 Aylmer StreetP.O. Box 385Peterborough, ON K9J 6Z3Tel: (705) 742-4245, ext. [email protected]

Rex Harrison Jr.Mason Insurance Brokers Ltd.317 King StreetWelland, ON L3B 5P4Tel: (905) 788-3535Fax: (905) [email protected]

Jack LeeBFL CANADA Risk andInsurance Services Inc.181 University Avenue,Suite 1700Toronto, ON M5H 3M7Tel: (416) 599-5530Fax: (416) [email protected]

Marianna MichaelCanfinse Group Inc.5000 Dufferin StreetSuite 219Toronto, ON M3H 5T5Tel: (416) [email protected]

Nick Dzudz Mariette Matos

Diane ScottRob Walters

ELECTED MEMBERS

PUBLIC MEMBERS

P.O. Box 45401 Bay Street, Suite 1200Toronto, ON M5H 2Y4Tel: (416) 365-1900 • Fax: (416) 365-7664


STAFF DIRECTORYRegistered Insurance Brokers of Ontario

CHIEF EXECUTIVE OFFICERPatrick [email protected]

Executive AssistantLise [email protected]

ReceptionistSheron [email protected]

ADMINISTRATION & FINANCEManagerWinston [email protected]

System AdministratorGustavo [email protected]

Registration/Data EntryValrie Bailey [email protected]

Irene [email protected]

Christopher [email protected]

AccountingErica [email protected]

COMMUNICATIONS Communications CoordinatorLise [email protected]

COMPLAINTS & INVESTIGATIONSManagerTim [email protected]

Complaints OfficerBarbara [email protected]

Senior InvestigatorsNadine [email protected]

Crystal [email protected]

InvestigatorArthur [email protected]

Legal Assistant Angela [email protected]

Financial Compliance CoordinatorDiana [email protected]

Senior Financial InvestigatorMichael [email protected]

Financial InvestigatorsDebbie [email protected]

Wendy [email protected]

CORPORATION LEGAL SERVICESGeneral Counsel John Goldsmith [email protected]

Legal Assistant Angela [email protected]

QUALIFICATION & REGISTRATIONManagerVivian [email protected]

Licensing CoordinatorTracy Cullen [email protected]

Examination CoordinatorLaurie [email protected]

Administrative AssistantLloyd [email protected]

RIBO Office: (416) 365-1900 or 1-800-265-3097 Fax: (416) 365-7664P.O. Box 45, 401 Bay Street, Suite 1200, Simpson Tower, Toronto, ON M5H 2Y4

P L E A S E V I S I T O U R W E B S I T E A T W WW. R I B O . C OM

is the self-regulatory body for general insurance brokers in Ontario.

ribo bulletin - spring 2016

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