Replacement of Life Insurance Contracts, O. Reg. 516/10

• Jurisdiction: Ontario

ontario regulation 516/10

made under the

insurance act

Made: December 15, 2010
Filed: December 17, 2010
Published on e-Laws: December 20, 2010
Printed in The Ontario Gazette: January 1, 2011

Amending Reg. 674 of R.R.O. 1990

(Replacement of Life Insurance Contracts)

1. Section 2 of Regulation 674 of the Revised Regulations of Ontario, 1990 is revoked and the following substituted:

Duties of Agent

2. (1) As part of an application for a contract of insurance, an agent for an insurer shall obtain from each applicant a statement, signed by the applicant, that indicates whether replacement of a contract of life insurance is intended.

(2) If replacement of a contract of life insurance is intended, the agent has the following duties before accepting an application for a contract of insurance:

1. The agent shall obtain from the applicant a list of all life insurance contracts intended to be replaced.

2. The agent shall complete and sign the following documents:

i. A life insurance replacement declaration in a form approved by the Superintendent.

ii. A written explanation of the advantages and disadvantages of replacing the contract of life insurance.

3. The agent shall review the completed life insurance replacement declaration and written explanation with the applicant and leave them with the applicant.

4. The agent shall obtain the applicant’s signature on a copy of the completed life insurance replacement declaration, attesting to the receipt of the completed declaration from the agent.

5. The agent shall obtain the applicant’s signature on a copy of the written explanation, attesting to the receipt of the written explanation from the agent.

6. If the applicant is not the life insured, the agent shall obtain the signature of the life insured on a copy of the written explanation, attesting to the receipt of the written explanation from the agent.

(3) Within three working days after receiving an application for a contract of insurance, the agent shall forward a copy of each completed life insurance replacement declaration, as reviewed with the applicant by the agent and signed by the applicant, to every insurer whose life insurance contract is intended to be replaced.

(4) If the transaction involves borrowing on an existing contract of insurance, the agent shall caution the applicant that it is not usually advisable to borrow against policy loan values beyond the applicant’s expected ability or intention to repay.

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