Minister Noel says new Life Licence Qualification Program will benefit consumers

Consumers in Newfoundlander and Labrador will benefit from new standards for life insurance agents as regulators start to licence the first graduates of the new Life Licence Qualification Program (LLQP). The LLQP is an enhanced education program which all new life insurance agents will be required to complete. It is available on an optional basis as of June 1, 2002 and will be mandatory as of January 1, 2003.

The LLQP will be in place in all provinces except Quebec, where an updated standard already exists.

Walter Noel, Minister of Government Services and Lands, says this is a positive step for the life insurance industry. "It is another way in which we are cooperatively responding with other jurisdictions to enhance consumer protection. The life insurance industry has changed dramatically over the years and involves complex insurance and investment products. It is imperative that salespersons in the industry be properly trained in order to be able to provide sound advice to their clients.

Minister Noel states that the Superintendent of Insurance in this province has been a strong supporter of this project and continues to work on other projects on a national basis to provide improved consumer protection.

• The LLQP is a standard for prospective life insurance agents entering the business, having the following components:

• a mandatory pre-licensing course provided by commercial course providers that meet certain standards (currently there is no requirement for life insurance agents to complete a training course);
• an examination that tests application of knowledge rather than the recollection of facts; and
• a single licence standard, rather than the one, two or three licences required in different provinces and territories today.

• To start, the LLQP course and examination will be accepted as alternatives to the existing licensing examinations in participating provinces and territories. Quebec already has an updated agent proficiency program and is not participating in this initiative.
• The LLQP was developed by industry subject matter experts (agents and company staff) who were assisted by educational and statistical consultants to organize the material into a course.
• The LLQP curriculum covers:

• Insurance industry overview
• Individual life insurance products
• Individual disability, accident and sickness products
• Group insurance products
• Investment products

• Other than insurance
• Individual variable insurance contracts (segregated funds)

• Underwriting, policy issuance and claims
• Taxation
• Retirement
• Consumer needs analysis and risk management
• Common and contract law and statutes
• Professional standards

• The LLQP is being offered optionally to allow agents to receive the benefit of the program while the industry gains some experience with the courses and examination. Each jurisdiction will make its own decisions about replacing the existing standard with the LLQP. In some jurisdictions, the government will need to consider changes to Regulations.
• The LLQP would enable all agents in Canada to meet the same proficiency standards and have the same form of licence. This will facilitate doing business across Canada and agents moving between provinces. Moreover, consumers will receive the same standard of proficiency and protection, regardless of where they live.
• Transition options will come into effect when the LLQP is mandated. These include a four year transition period when a restricted licence will be offered, along with the full LLQP licence. The restricted licence will be granted upon completion of a designated portion of the course work and associated examination and an agreement to abide by certain conditions. This option is available to assist the industry to adjust from the current system to the LLQP.
• Regulators have extended an invitation to the Canadian insurance industry to form a committee to provide advice on the impacts of the LLQP and any operational concerns related to the LLQP.
• The Canadian Council of Insurance Regulators (CCIR) is an inter-jurisdictional association of regulators of insurance. Its mandate is to facilitate and promote an effective regulatory system in Canada to serve the public interest. CCIR works co-operatively with other financial services regulators to enhance consumer protection and to develop and harmonize insurance regulation across jurisdictions.
• The Canadian Insurance Services Regulatory Organizations (CISRO) is an organization of licensing and regulatory authorities for insurance intermediaries across Canada.
• Additional information on the LLQP is available on our web site at: www.gov.nl.ca/gsl/cca/ip/llqp

Media contact: Rick Callahan, Communications, (709) 729-4860.

2002 06 20                              12:10 p.m.