Ontario Life Broker E&O Insurance
First Durham’s Canadian Life Broker plan is underwritten on an INDIVIDUAL basis and is not a group sponsored certificate plan. On the surface the two may not seem all that different, however, we believe that individual options better serve the interests of agents, especially in a volatile market. This is not to say that we discourage strong relationships with your carriers or playing an active role within your professional associations. In fact we believe that both are important to be successful.
What you may not recognize is that Association or Company sponsored plans are master programs where
You are simply a certificate holder. Oftentimes the holder of the master policy (The Association or Company Sponsor) have negotiated terms and conditions which may protect their interests.
However, in the event of a claim, it is critical that you have your own representation, whose priority is protecting you. We have seen all too often agents whose certificates have been cancelled without their knowledge only to find out after a claim, or claims where Agents find themselves in an adversarial situation with an insurance carrier.
Here are a few points about individually underwritten policies that you should consider when deciding whether or not to buy E&O coverage independently and decide what best suits your needs:
Competitive Coverage at a Competitive Price
In the past group plans were underwritten on a mass basis and were often less expensive. Today this is not necessarily the case. Our policy continues to be among the most competitive in the marketplace, and with no annual dues, it is often far less expensive than many group programs. The premise of a group certificate program is that more members means more premiums and greater profits. However, if losses increase and results are unprofitable due to a deterioration in the quality of the group, (this can happen when underwriting is lax), there can be a rapid increase in premiums or as we have seen in past years, the departure of Insurer’s from the marketplace. This is not to say that individually underwritten plans are not adverse to loss, but controlled underwriting in the past has helped to stabilize results.
NO Association Dues or Volume Commitment Required
Most group plans may require membership in an association and/or a minimum sales volume commitment in order to qualify for coverage. If your membership ceases or you fail to maintain sufficient sales volume you may run the risk of having your coverage terminated.
Your Policy - Your Limits
This is an INDIVIDUAL policy held and owned by YOU. Under a group plan the sponsoring entity owns the policy. In some circumstances these plans carry an aggregate limit for all Certificate Holders. This means that the plan may have a cap for the total value of claims that can be made in a given year. If this aggregate limit is breached, there may not be enough policy limit available to pay claims for other certificate holders.
Mandatory Timely Notice of Renewal
The past few years of market instability has resulted in short notice of non-renewals or steep premium increases. Some receive only a few days notice with virtually no time to seek alternatives. In contrast, owners of an individual policy, such as the Canadian Life Broker Plan are given at least 30 days notice of renewal terms allowing for adequate time to consider all options. Timely notice also allows the renewal application to be expedited allowing us to place policy documents in a Life Broker’s hands prior to the expiry of their existing term.
Controlled Underwriting Allows for Stable Coverage Options
Group programs sometimes have looser underwriting guidelines. There may be a higher incidence of accepting agents with a higher claims frequency into these group plans. This can lead to unprofitable results, higher and less stable premiums, and sometimes the departure of the Insurer from a market.
With an individual plan each application is reviewed by the underwriter and assessed on it’s own merit. Controlled and disciplined underwriting leads to a better risk pool resulting in more stable rates and coverage.
We are confident that the coverage available with the Canadian Life Broker Plan provides Life, Mutual Fund Agents and Financial Planners competitive options with a stable market and competitive pricing. To view more details please see our Summary of Coverage, Rates and a list of Frequently Asked Questions.