Non-active firm registrations are required for any corporations that have been set up for at least one of the following reasons:
- to receive commission income for tax purposes
- is a partner in a corporate partnership
- is an underlying corporation in a cluster or management agreement arrangement
Commissions
Non-active firms are registered in order to receive commissions. The sponsoring brokerage that holds the insurer contracts receives the full commission and distributes the commission accordingly. Any trust funds collected by a non active must be payable to the sponsoring brokerage and deposited into the sponsoring brokerage’s trust account. Non-actives cannot have any company contracts.
If your business does not fall into one of the approved categories, then it cannot be registered as a non-active member firm.
Please email licensing@ribo.com to register your non-active or for assistance to determine which registration class best suits your business.
IMPORTANT
The non-active member firm’s name must not be advertised on any signage, letterhead, business card, website, or any other form to the public.
If you are holding yourself out to the public, then you will need to change your registration to an active firm registration. Please email licensing@ribo.com for more information.
Please note that under this category of membership, a Non-Active Member Undertaking is required and must be signed by the sponsoring Principal Broker.
The Undertaking waives the requirement to maintain separate Fidelity Bond and Errors and Omissions coverage, file position reports, or maintain a separate trust account or minimum equity requirement, provided that the non-active firm is not identified in any way to the public.
How do I register a non-active member firm with RIBO?
Individuals interested in registering a non-active member firm with RIBO can submit an application package to RIBO. Once RIBO receives the application package we will send you a payment request for the registration fee.
Application requirements include signing and completing a Non-Active Member application form and Undertaking, and including copies of:
- Articles of Incorporation
- E&O policy or Certificate of Insurance from the active firm showing proof that the non-active firm has been added as an additional insured
Employment
It is a good practice to confirm whether a potential employee or producer has a non-active firm registered under their name prior to hiring. It is important for you to remind the potential employee or producer to provide RIBO an updated Non-Active Member Undertaking with your signature and proof that their firm is named under the firm’s Professional Errors and Omissions policy.
Audits
Consider reviewing internally whether any commission income is being paid to external corporations and confirm whether these are properly registered with RIBO.
Frequently Asked Questions – Information for Individuals
What happens if I am no longer paid commissions?
If you have a non-active member firm registration that you no longer use to collect commissions, please email licensing@ribo.com for information on how to deregister the firm’s RIBO license. Please note, you do not need to dissolve the legal corporation.
Are there other conditions for maintaining a non-active member firm registration?
The majority of equity and voting interest in a partnership must be held by licensed general insurance intermediaries. The shareholders of non-partnership non-actives can be corporate/holding companies or any other persons who do not hold a RIBO license.
Non-active member firms must also have an attended mailing address in Ontario, regardless of principal place of business.
The non-active firm must be added as an additional named insured under the active sponsoring firm’s Professional Errors & Omissions policy
A firm renewal must be completed each year.
Why do I need to renew a non-active member firm registration?
Similar to your individual registration, you are required to submit an annual renewal for your non-active firm registration and pay the applicable renewal fee. Individuals can complete a renewal for their registered non-active firm at the same time as completing their own renewal via the membership portal. Renewals may be completed beginning July 1st each year. Please note, all renewals must be completed by August 31 of each year otherwise the registration may become suspended, or the firm may be deregistered.
Do I need to update Non-Active Member Undertaking if I change employers?
Yes, you need to provide an updated Non-Active Member Undertaking if you change employers. You can email licensing@ribo.com an updated Non-Active Member Undertaking. Please note, you will also need to provide proof that the non-active firm has been added as an additional named insured under the active firm’s Professional Errors & Omissions policy.
Can a non-active member firm sponsor an individual’s RIBO license? Non-active firms cannot sponsor an individual’s RIBO license, Individuals may only be sponsored by a licensed retail brokerage or active firm.