Ontario Regulation 991, Section 10, outlines a broker’s obligations when placing coverage with an unlicensed insurer.
Brokers must inform consumers of the risks associated with unlicensed insurers, including potential difficulties in claims payment and that they are not subject to the Insurance Act..
To protect both parties, brokers must obtain written consent from the consumer and confirm that comparable coverage cannot be obtained from a licensed insurer.
Conducting thorough research into licensed insurers is crucial to avoid potential issues with unlicensed insurers. Brokers working with wholesalers must also verify whether the business is placed with licensed insurers.
RIBO requires brokers to complete an Unlicensed Insurance Client Consent and Acknowledgement of Risk Form when advising consumers on placing coverage with an unlicensed insurer.