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President´s Message
Art Langley I thank you for the opportunity to serve as President for the last year. I have enjoyed the responsibility and feel confident that RIBO Council fulfils its mission to protect the public and regulate the profession. I'd also like to thank my fellow Council members for the support and guidance I received throughout this year. By now you should have received an important package from RIBO containing: election material, a copy of the Annual Report and a Notice of Meeting for the Annual General Meeting in November. If you have not received this package, please contact Susan MacKenzie at the RIBO office. The Annual Report provides RIBO Council and staff with the opportunity to brief you on the events and highlights of the previous year and explain our financial situation. The pages summarize the work of a dedicated Council and staff in our mission to protect the public and regulate the profession. If after reading the Report you have any questions or comments, please feel free to contact any Council or staff members. In the next few months there will be two excellent opportunities to do just that: at our booth at the IBAO Annual Convention (October 29-30) and at RIBO's Annual Meeting on November 6. If you can attend either event, please do come by and say hello. I also encourage you to read through the election material very carefully to ensure that your ballot is properly completed. Ballots incorrectly filled out cannot be counted. Please exercise your right to vote by returning your ballot no later than November 3, 2003 at 4:00 p.m. Thank you again for your support. Yours truly, Art Langley 
 WARNING
RIBO has received a notice from Lloyd's regarding an entity operating as a wholesaler in Quebec. This entity is NOT registered by RIBO and should not be confused with the entities with similar names that are registered with RIBO. Please see the "News and Updates" section of the RIBO website (http://www.ribo.com/newsitem.asp?id=67) for details.
Qualification and Registration Report
Rod FinlaysonChairperson How quickly the year goes by. This will be my last report to you as the Qualification & Registration Chair. Please allow me to take this opportunity to update you on a few important items. Privacy Packages By now the Principal Broker of each brokerage should have received a "Privacy Package" with information on the steps each office must undertake in order to ensure compliance with the Federal Personal Information Protection and Electronic Documents Act (PIPEDA) which takes effect January 1, 2004. If you have not received the package, please contact the RIBO office. Continuing Education Certificates Exam Passing Letter Effective October 1, 2003, all requests for a duplicate copy of the passing letter for the RIBO examination must be accompanied by a $10.00 money order. Reminder of Inactive List In March 2002, the Qualification and Registration Committee approved a motion to develop a listing of "inactive" individuals to be accessed only by Principal Brokers upon written request. This listing is not to be distributed or released under any circumstances. The sole purpose of this listing is to provide Principal Brokers with the names, city/town and telephone numbers of "inactive" individuals available for employment. Principal Brokers considering any of the individuals for employment must contact the individual directly. All individuals on the listing have provided their consent to be included on this listing and have also provided authorization to discuss the contents of their personal registration record for employment purposes. New Award The new Donald W. Lambie Award was established in recognition of Mr. Lambie's commitment to self-regulation and his outstanding contribution to the broker profession. This award will be presented to the individual with the highest mark in the initial RIBO qualification examination. Mr. Lambie was one of RIBO's founding fathers and also acted as the first President. The first presentation of the Donald W. Lambie Award will be presented at the Annual Meeting on Thursday, November 6 following the presentation of the Chris Ward Memorial Award. Council and staff would like to congratulate all our award winners. Continuing Education The deadline for completing your continuing education credits was September 30, 2003. Those who did not comply will have their license suspended and their names published in the winter edition of the Continuing Education Summary. If you have any questions concerning continuing education, please consult the Continuing Education Summary, or contact Vivian Lee. Over the last three months we've had 39 requests for secondary business exemptions. All were granted. The exemption breakdown was as follows: 7 individuals were granted exemptions to sell financial products, 32 individuals were granted other secondary business exemptions. There were no requests to waive the Level I or Level II exams. I have enjoyed my experience as Chairperson of the Qualification and Registration Committee. Thank you for providing me with the opportunity to represent my peers on Council. Yours truly, Rod Finlayson
AWARDS
Chris Ward Memorial Award This award is presented in memory of RIBO's late president Christopher J. Ward, to the individual who receives the highest mark on the first attempt at both sections of the Level II examinations. This year I'm happy to announce that two individuals have tied to win the award. Mary Anne Christie of Cleaver-Auld Limited and Gregory Bryan Bettger of Thames Valley Insurance Brokers Limited are the recipients of this year's award. Donald W. Lambie Award This is award was established in recognition of Mr. Lambie's commitment to self regulation and his outstanding contribution to the broker profession. Mr. Lambie was one of RIBO's founding fathers and also acted as the first President. This award is presented to the individual with the highest mark in the initial RIBO qualification examination. We are pleased to announce that Geoffrey W. Carter is the first recipient of this award. Council and staff would like to congratulate all our award winners. A formal presentation of this award will be made at the Annual Meeting on Thursday, November 6.
ELECTION REMINDER
November 3, 2003 is Election Day. Every member in good standing is entitled to vote for up to three candidates. You have received a nomination book, including information about each candidate up for election. Please follow the instructions outlined on the back of the return envelope. All ballots must be received at the RIBO office by 4:00 p.m. on November 3, 2003. EXERCISE YOUR RIGHT TO VOTE!!
Maintaining Continuing Education Certificates
Our Financial Investigators continue to have difficulty obtaining continuing education certificates for individuals who have changed brokerages within the five-year spot-check period. Although it is the individual's responsibility to keep these records, firms that also maintain the certificate must provide the individual with copies to ensure their own file is current for RIBO purposes.
ANNUAL GENERAL MEETING
Thursday, November 6, 2003 MARK YOUR CALENDAR The Twenty-first Annual General Meeting of the membership of the Registered Insurance Brokers of Ontario will take place on Thursday, November 6, 2003, starting at 2:00 p.m. at Toronto's Grand Hotel. A formal notice of meeting, annual report and proxy form has been mailed to each registrant in good standing. Besides the usual business covered at every Annual Meeting, you will have an opportunity to meet and talk with this year's Council members, incoming members, senior management and many other valuable members of the RIBO staff. All registrants in good standing are eligible to attend and to vote on matters brought before the meeting. A list of members who are qualified to vote will be available for review in the RIBO office during business hours. Any member unable to attend the meeting is encouraged to submit a proxy to register their vote on questions that may be raised at the meeting.
IMPORTANT INFORMATION REGARDING REFERRAL FEES
Due to some recent requests from brokers for information regarding RIBO's policy on referral fees, below is a reprint of an excerpt from RIBO's Spring 2001 Revised Guidelines on Marketing Practices*: REFERRAL FEES TO/FROM OTHER FINANCIAL SERVICE SECTORS Brokers may pay or receive referral fees from other intermediaries in the following financial services: life agents/brokers, mutual funds, financial planners, investment dealers, mortgage brokers, and real estate brokers, premium financing organizations and organizations that deal with products that reduce insurance risk (e.g. alarm systems). They are subject to the following conditions: There must be full disclosure and receipt of written consent from a client in advance of the referral (see enclosed sample client consent form). The broker does not give advice or participate in any sale of a product unless properly licensed to do so. Any permission necessary has been received from all appropriate regulatory organizations (e.g. Financial Services Commission, etc.). Note: Referral fees to non-financial industry parties are not permitted. *A complete version of the Spring 2001 Revised Guidelines on Marketing Practices is available on the RIBO Website
THREE-STEP APPROACH COMMISSION TRANSFER - MANAGEMENT TOOL
Reprinted at the request of brokers from the 2000 Summer Bulletin. Please note this approach is intended to be used as a management tool to help brokers determine commission transfer payments. Several instances have come to RIBO's attention where commissions owing to a brokerage are being transferred from the trust account to the general account prior to the brokerage collecting the premium from the client. This practice is against the regulations for the proper handling of trust funds. Accordingly, RIBO has developed a three-step approach, which incorporates the regulations in this regard, in order to avoid this problem. The three-step approach is as follows:
The broker's net trust position is comprised of two elements. Firstly, monies in the broker's bank account or "in trust" investments that represent funds that have been received and not yet transferred to the general account. These balances represent funds that could be transferred to the general account. Secondly, commission receivable element from premium receivable balances that are 0 to 90 days old. These balances represent amounts that are not transferable to the general account, as the funds have not yet been received. The three-step approach uses information from the broker's own systems, whether automated or not. It can be used as a means to manage the trust assets and liabilities of the brokerage or as a monitoring tool for the broker to determine that his/her method of commission transfer is in full compliance with the regulations. We should point out that this is not a new rule or a change in regulatory direction by RIBO. It has always been against the regulations to transfer commission before the premium has been collected. We have just seen an increase in this practice lately. Accordingly, RIBO will be specifically monitoring this situation over the next couple of years. EXAMPLE Using the following example let us show you how this would work: Brokers XYZ has:
Assume the broker has an average commission of 15% and an average retail sales tax rate of 6%. Step 1. Calculation of the net trust position.
Step 2. Calculation of the commission receivable element of the net trust position. Using the allowable premium receivable balances (0-90 day balances), remove the retail sales tax on those balances by dividing it by the average retail sales tax rate. This resulting balance is then multiplied by the average commission factor. 175,000 divided by 1.06 = 165,094 Multiply by 15% = 24,764 (assuming the average commission is 15 %) Please note prepaid premiums and refunds owed should be reclassified as trust liabilities when making this calculation. Step 3. Compare steps 1&2 and act accordingly. This broker needs only to maintain $24,764 to be in full compliance with RIBO Reg. S.16, as this amount represents the commission receivable element of the net trust position. The approach is sensitive to the cycles of the brokerage's invoicing and to the changing make up of the broker's book.
Addition & Deletions from the RIBO Register
May 23, 2003 - September 22, 2003
Members of Council - Registered Insurance Brokers of Ontario
Member Assistance Directory
RIBO Office: (416) 365-1900 or 1-800-265-3097 Fax: (416) 365-7664
P.O. Box 45, 401 Bay Street, Suite 1200, Simpson Tower, Toronto, ON M5H 2Y4 Receptionist - Madeline Ross General Manager - Jeff Bear (jeff@ribo.com) Secretary - Lise Clements (lise@ribo.com) ADMINISTRATION & FINANCE Manager - George Martin (george@ribo.com) Accounting & Data Supervisor Registration/Data Entry - Irene Chung (irene@ribo.com), Erica Lo (erica@ribo.com), Karla Poirier (karla@ribo.com), Valrie Bailey (valrie@ribo.com) COMPLAINTS & INVESTIGATIONS Manager - Tim Goff (tim@ribo.com) Complaints Officer - Sharon Bentley (sharon@ribo.com) Senior Investigators - Nadine Austin (nadine@ribo.com), Crystal Skyvington (crystal@ribo.com) Secretary - Angela Daley (angela@ribo.com) Co-ordinator - Diana Campoli (diana@ribo.com) Financial Investigators - Michael Buck (michael@ribo.com), Filomena Scampoli (filomena@ribo.com) CORPORATION LEGAL SERVICES In-house Legal Counsel - Bradley Nairn (bradley@ribo.com) Secretary - Angela Daley (angela@ribo.com) MARKETING & COMMUNICATIONS Communications Co-ordinator - Susan MacKenzie (susan@ribo.com) QUALIFICATION & REGISTRATION Manager - Lilian Croucher (lilian@ribo.com) Assistant - Vivian Lee (vivian@ribo.com) Secretary - Sonia Lyew Garcia (sonia@ribo.com) Clerk - Laurie Reynolds (laurie@ribo.com)
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