Ethics in Canada

Table of Contents

Approved for 2 Ethic hours.

Defining Ethics                                                                                                           Page 1

Suitability                                                                                                                    Page 1

Conflicts of Interest                                                                                                    Page 1

Prioritizing the Needs of the Client                                                                            Page 1

Canadian Council of Insurance Regulators (CCIR)                                                   Page 2

Face-to-Face Presentations                                                                                         Page 2

Is the Product Suitable?                                                                                              Page 2

Adequate Communication Skills                                                                                Page 4

Choosing Wisely                                                                                                         Page 4

The Test of Time                                                                                                         Page 5

Finding the Right Products                                                                                        Page 6

Old Money; New Money                                                                                            Page 7

Four Annuity Participants                                                                                           Page 7

Types of Annuities                                                                                                      Page 7

Benefit Payment                                                                                                         Page 8

Immediate Annuities                                                                                      Page 8

Deferred Annuities                                                                                         Page 8

Payment Methods                                                                                                       Page 9

Single Premium Annuities                                                                              Page 9

Flexible Premium Annuities                                                                            Page 9

Annuity Type Based on Policyowner Risk                                                                 Page 9

Variable Annuities                                                                                          Page 10

Fixed Annuities                                                                                              Page 10

Declared Rate Fixed Annuities                                                                      Page 10

Indexed Fixed Annuities                                                                                Page 10

Fixed Rate Annuities                                                                                      Page 10

Equity Indexed Annuities                                                                              Page 10

Accumulation Phase                                                                           Page 14

Distribution Phase                                                                               Page 14

Variable Annuities                                                                                          Page 15

Annual Expenses                                                                                            Page 16

Financially Sound Insurers                                                                                         Page 17

Determining Suitability                                                                                               Page 18

Necessary questions to ask                                                                             Page 18

Sales Practices                                                                                                 Page 19

Product Placement                                                                                          Page 19

Full Disclosure                                                                                                            Page 20

Product Knowledge                                                                                                    Page 20

Identifying Suitability Issues                                                                                      Page 20

It is Not a Liquidity Issue but Rather a Suitability Issue                                           Page 21

Lock-Boxing                                                                                                               Page 21

A Comprehensive Financial Plan                                                                                Page 22

Terminology for Equity Indexed Annuity Products                                                  Page 23

General Contract Provisions                                                                                       Page 26

Entire Contract                                                                                               Page 26

Changes and/or Waivers                                                                                 Page 26

Misstatements                                                                                                 Page 26

Required Reporting                                                                                        Page 27

Other Contract Items                                                                                      Page 27

Recognizing and Addressing a Conflict of Interest                                                   Page 27

IPRC Examines Conflicts of Interest                                                                         Page 28

Three types of conflicts of interest                                                                 Page 28

Three principle-based recommendations                                                         Page 28

Disclosing Potential Conflicts                                                                                    Page 29

IPRC Suggestions in 2005                                                                              Page 30

Placing the Client’s Interests First                                                                              Page 30

Regular commission                                                                                        Page 31

Contingent commission                                                                                  Page 31

CCIR Considers Issues in the U.S.                                                                            Page 31

Recognizing Investment Risk                                                                                     Page 32

Financial Literacy                                                                                           Page 33

January 2015 “The Approach”                                                                                    Page 33

The Approach report specifically addressed product suitability                                Page 36

Principle and Supporting Elements                                                                 Page 36

Disclosure                                                                                                       Page 36

Client Expectations                                                                                         Page 37

Fact Finding                                                                                                    Page 37

Obtaining reasonable information                                                                               Page 37

Needs Assessment and the Resulting Recommendations                                          Page 38

Risk tolerance considers several factors                                                                     Page 39

Risk tolerance changes over time                                                                                Page 40

Product Information                                                                                                   Page 40

Complaints                                                                                                                  Page 40

What is the Difference?                                                                                              Page 41

Fact Finding and Needs Assessment (Analysis)                                                        Page 41

Advocis                                                                                                                       Page 42

How is Canada Doing?                                                                                               Page 42

September, 2014 Report                                                                                             Page 42

FSCO conducted a review                                                                                         Page 43

(Respondents were Ontario agents but it is likely that they are similar to agents in all provinces)

Thank you,

United Insurance Educators, Inc.

PO BOX 1030

Eatonville, WA  98328

(253) 846-1155