New Brunswick Proposes Restricted Insurance Agent Licensing Regime

The Financial and Consumer Services Commission of New Brunswick recently published a Consultation Paper titled Incidental Selling of Insurance Restricted Insurance Licensing Regime. A complete copy of the Consultation Paper is available here.
In the Consultation Paper the Commission has indicated that it proposes to regulate the incidental selling of insurance through a restricted insurance licensing regime similar to regimes previously adopted in Alberta, Saskatchewan and Manitoba.
The Commission has proposed to define an “incidental seller of insurance” to mean:
“a person that, in the course of selling or providing goods or services to the person’s customers or clients, solicits, negotiates, sells or arranges insurance, or offers to sell, negotiate or arrange insurance, that relates to those goods or services.”
The types of businesses that would be eligible to obtain a restricted agent licence would be:
• A deposit-taking institution – a bank, credit union, caisse populaire, or loan or trust company;
• A sales finance company – a corporation, other than a financial institution, that provides consumer loans, or provides or arranges for credit;
• A transportation company that provides transportation service for goods;
• An automobile dealership, a watercraft dealership, a recreational vehicle dealership, a farm implement dealership or a construction equipment dealership;
• A mortgage brokerage licensed under the Mortgage Brokers Act;
• A customs brokerage;
• A freight forwarding business;
• A vehicle rental business (incl. construction equipment rentals);
• A portable electronics vendor – a business that sells or leases portable electronic devices or provides the devices in connection with a transaction between the business and a consumer;
• A business engaged by one of these businesses to solicit, negotiate, sell or arrange insurance on its behalf.
The Commission is proposing to allow restricted insurance licence holders and their employees to solicit, negotiate, sell or arrange the following classes or types of insurance:
• Cargo insurance;
• Creditor’s critical illness insurance
• Creditor’s disability insurance
• Creditor’s life insurance
• Creditor’s loss of employment insurance
• Creditor’s vehicle inventory insurance
• Export credit insurance
• Guaranteed asset protection insurance
• Mortgage insurance
• Portable electronics insurance
• Rented-vehicle accidental injury or death insurance
• Rented-vehicle contents insurance
• Rented-vehicle liability insurance
The Commission has indicted that it does not intend to include travel insurance, funeral insurance and equipment warranty insurance within the restricted insurance licensing regimes as some other provinces have done.
With respect to equipment warranty insurance, the Commission confirmed that it does not consider warranties or extended warranties to be insurance where the warranty is sold incidentally to the product and is sold by the “distributor” of the product or an affiliate of the distributor with a non-arm’s length relationship.
Among other requirements, each business that wishes to apply for a restricted insurance licence would be required to be sponsored by an insurer licensed in New Brunswick and to maintain errors and omissions insurance in minimum specified amounts.
The Commission has invited feedback on a number of questions posed in the Consultation Paper. The comment period for providing written submissions ends on January 31, 2020.