Beginner's Guide: How to Become an Insurance Broker, Canada

Beginner’s Guide: How to Become an Insurance Broker in Canada

How to become an insurance broker

Being an insurance broker is a great profession– there are high demands of jobs, there is room for growth and to do different things, the industry is diverse, and it’s just challenging enough that you’ll never get bored. But unlike most jobs, there are requirements you have to meet first. This is a guide on how to become an insurance broker in Alberta, Ontario, Manitoba, British Columbia (B.C.) and Quebec. It also contains resources on the necessary qualifications required on how to become an insurance broker or an insurance agent.

Table Of Contents

There are various means of buying insurance. However, most people understand that an insurance broker’s expertise in helping clients to make well-informed decisions about personal and business insurance cannot be overemphasized. In this article, we will discuss how to become an insurance broker anywhere in Canada. 

Who Is an Insurance Broker?

Insurance brokers are independent financial professionals who advise individuals, families, and businesses while selecting the insurance coverage that is best for them. The broker manages all phases of the insurance transaction: determining the client’s needs, recommending and advising the appropriate policy, making payment arrangements and facilitating claims.

Depending on the brokerage or the position, brokers may specialize in one or more areas of insurance (such as home, auto, commercial, farm, life, accident & sickness, travel, or specialty lines). Those new to the industry usually start in personal lines (insurance for private individuals).

Again, depending on the brokerage’s requirements, brokers may also hold one of several different positions (e.g., customer-service representatives/CSRs, producers who generate new sales, account executives, etc.) or may represent all these positions at the same time. Many brokerages will advertise for a particular type of broker licence (levels 1, 2, or 3) that testify to the broker’s expertise and provide the regulatory authority required to act as an insurance broker. Now you can find out how to become an insurance broker depending on your location.

How to Become an Insurance Broker(Alberta)

Insurance Brokers Have Flexibility and Job Security

The role is perfect for those who like lots of variety – every day is different. It pays well, offers great job security and opportunity for growth and advancement. The hours are flexible—you can work full-time or part-time, fitting your career around your schedule. You can own a brokerage or work for one. You can continue your education and be a lifelong learner.

Insurance Brokers Make a Difference in the World

What could be more rewarding than helping individuals and business protect their property and their livelihood? Keeping people insured is also good for the economy. When businesses keep running and individuals keep working, the economy continues to provide, both for those that have and for those that have not. Insurance makes it possible for businesses to produce, governments to run, and for individuals to obtain and protect what they need.

Make a Difference in Alberta

Just what do insurance brokers contribute to Alberta?

  • Own over 300 small businesses located in over 500 locations
  • Support 11,726 employees
  • Contribute almost $1.52b in total GDP
  • Spend and contribute $589m in consumer spending
  • 80 cents of every dollar of premium collected is spent in Alberta

(Statistics taken from Insureconomy, produced by the Insurance Bureau of Canada, December 2014)

Becoming an Insurance Broker in Alberta

First, you’re required to pass a licensing exam. IBAA offers a variety of study options and preparation, from a one-week immersion course to self-study. Some post-secondary institutions in Alberta also offer degrees and diplomas in business, majoring in insurance.

Once you have passed your exam, you can work for any brokerage in Alberta. Whether you want a big city or small community life, you will find a brokerage that suits you. Your new employer will sponsor you to write business with one or more of the companies they represent. You are on your way!

How to Become an Insurance Broker in Ontario

Roles

  • Customer Service Representative and Account Manager
  • Technical Service Representative / Administrative Assistant
  • Account Executive / Producer 
  • Management / Principal Broker
  • Claims Specialist

Benefits

  • Claims Specialist
  • Creating Meaningful Relationships
  • Making an Impact
  • Contributing to Local Communities
  • Promoting Diversity & Inclusion

STEP 1

Choose an IBAO(Insurance Brokers Association Ontario) Course to Prepare for RIBO’s Level I Exam

STEP 2

  • Employment or sponsorship is not required to write the exam
  • Pass the exam. it is mandatory to become an Ontario broker

STEP 3

Find a Job Within a Year of Passing the Exam

Requirements to Become a Licensed General Insurance Agent(Ontario)

To obtain a licence, an applicant must meet the following requirements:

  • Complete a General Insurance Agent application
  • Be conversant with the laws of Ontario pertaining to the licensing of general insurance agents.
  • Be sponsored by a licensed insurer.
  • Be of good behaviour and reputation.
  • Be a suitable individual and meet all the licensing requirements.
  • Possess the adequate educational background.
  • Provide FSCO (Financial Services Commission of Ontario) with an Ontario mailing address suitable to permit service by registered mail. 

How to Become an Insurance Broker in Manitoba

The governing organization charged with the licensing and discipline of insurance brokers, agents and adjusters for Manitoba is The Insurance Council of Manitoba (ICM) 

As an Insurance broker learning how to become an insurance broker, you will be required to obey all their licensing code of conduct, rules, regulations and as well as The Insurance Act of Manitoba.

First Steps and Certification

Before you can begin your journey on how to become an insurance broker, you will likely need to make a background check if you’re a first-time applicant. 

Next, you will need to find a certified educational institution where you’ll complete the necessary coursework to become an accredited insurance broker.

Licensing and Levels

The following are some insurance certification providers you might consider:

Licensing and levels

There are three levels of licensing open to insurance brokers. They are:

Insurance license – Level 1

Level 1 Brokers License need to achieve one of the following:

  • General Insurance Essentials: C81 Part 1 and C82 Part 2
  • Property and Casualty Insurance Certificate program from Red River College (including successful completion of the IIC exams)
  • Fundamentals of Insurance course
  • ILS Level 1 General and Adjuster Insurance license Program (ILS L1)
  • Canadian Accredited Insurance Brokers course (CAIB 1)
  • C11 Principles and Practice of Insurance and C130 Essential Skills for the Insurance Broker and Agent
  • You can also take up the brokers level 1 exam through the Insurance Council of Manitoba’s program called Council’s Challenge Level 1 Examination.
  • Following the successful completion of your courses and after you have earned your level 1 license, you’ll be able to start working. However, level 1 brokers are:
  • It is only certified that are allowed to work under the surveillance of at least a level 2 insurance broker.
  • They are prohibited from selling except in the office of a certified insurance agency
  • They are only allowed to sign insurance policies.

Insurance license – Level 2

To acquire your Level 2 Insurance Brokers License of Manitoba province, you will have to finish one of the following in the least:

  • Canadian Accredited Insurance Brokers course 2 ( CAIB 2) and (CAIB 3)
  • Advanced Skills for the Insurance Broker and Agents (C131)
  • Essential Skills for Insurance Broker and Agents (C130) 
  • Or you can as well take the exam through the Council’s Level 2 Challenge Examination.

Also, ICM will consider you eligible to become a Level 2 licensed insurance broker if you possess one of the following designations:

  • Canadian Institute of Bookkeeping
  • Chartered Insurance Professional
  • Fellow of the Insurance Institute of Canada
  • Associate of the Insurance Institute of Canada
  • Fellow Chartered Insurance Professional
  • Canadian Risk Management
  • Canadian Accredited Insurance Broker

When you have completed your courses and examination, you will be ready to commence working as a Level 2 insurance broker.

As a level 2 insurance broker, you will be qualified to:

  • Sign insurance policies
  • Supervise level 1 brokers
  • Sell within or without a general insurance office.

Insurance license – Level 3

To apply for level 3 Insurance Broker Certification, you will be required to have secured your level two brokers license for two years in the least.

After that, you will be required to finish one of the following:

  • Practical Issues in Broker Management Course (C132)
  • Canadian Accredited Insurance Brokers Course (CAIB 4)
  • Obtain a designation that the council considers eligible
  • Or you can as well challenge the exam through ICM’s level 3 challenge examination.

After completing your level 3 courses and succeeding in all the examination, you will become a full-fledged insurance broker.

Obtaining your level 3 license means you can start up your own insurance agency.

As a level 3 insurance broker, you will be prepared to:

  • Sell policies inside or outside an office or general insurance agency.
  • Manage an insurance agency office
  • Sign insurance policies

Now that you know how to become an insurance broker, it is time to start your career.

Launching Your (Possibly Solo) Career

Once you have acquired your level 3 brokers license, you have several options open to you. This includes setting up your own insurance office. 

You don’t necessarily need to rent office space to become an insurance broker because you can do this job from home. However, you will need a plan on how to become an insurance broker business.

The following are steps to starting up an insurance business in Manitoba:

  • Construct a business plan
  • Determine the legal structure of your business
  • Register your company name
  • Apply and receive a Tax ID number
  • Purchase errors and omissions insurance for your business
  • Get the business permits and licenses required by Manitoba
  • Acquire a client management system to manage your clients
  • Engage in networking to get your first client. Many brokers find it useful to join relevant groups on social media networks and answer any questions about insurance. Such “soft” sell tactics tend to be far more successful than cold-calling or other hard-sell approaches.

How to Become an Insurance Broker in British Columbia(BC)

For Students And Licensees(BC)

Become An Insurance Broker in British Columbia (B.C.)

Acquire Your Licence

Level 1: General Insurance Salesperson’s Licence

To be eligible to become an insurance broker in B.C., you must be licensed. In order to be eligible for a licence, you must have passed one of the approved pre-licensing exams offered exclusively by Insurance Brokers Association of British Columbia (IBABC) – Fundamentals of Insurance or the Canadian Accredited Insurance Broker (CAIB) 1

You can pre-licensing courses without being employed in the industry; however, only those employed by an insurance brokerage can take licensing courses. In most cases, employers enroll their new employees for license applications.

Once you are licensed, if you leave or lose your work, your licence will be deactivated, although you will retain your licensable status for about one to three years (based on the level of license you acquired and how you were eligible for it).

New Broker Essential Skills Certificate Program

Long-term career success just became easier for newcomers to the insurance brokerage business, all thanks to a certificate program introduced by the Insurance Brokers Association of B.C. (IBABC) in 2010. The New Broker Essential Skills Certificate Program is a three-level program that provides a framework in both the technical know-how and soft skills required to achieve success as a property and casualty (P&C) insurance broker. New brokers can begin the program as soon as an insurance brokerage employs them. The IBABC is the educator for licensing and continuing education for the Property Casualty brokerage industry in B.C.

The insurance broker position requires various skills, from technical knowledge about insurance contracts to customer service and people skills. A key element of the program is that the trainee works with a mentor – a skilled broker who can render guidance and direction.

The certificate program takes about eighteen months to achieve. It combines some of the Canadian Accredited Insurance Broker (CAIB) courses. In conclusion, students are well on their way to receiving the CAIB designation – the one most recognized and acknowledged for insurance brokers in Canada.

Level 2: General Insurance Agent’s Licence

As earlier mentioned, Level 1 licensees wishing to proceed to a Level 2 license are mandated to pass the CAIB 2 and CAIB 3 exams.

 Level 3: General Insurance Agent’s Licence

A Level 3 license enables you to manage a brokerage.

To obtain a Level 3 licence, alongside having satisfied the educational qualifications for a Level 2 licence, you must:

Pass the CAIB 4 exam, and

Have used a general insurance licence for five out of the previous seven years, with at least three of those years working as a Level 2 licensee

To achieve your CAIB mark of professional recognition for clients and employers, you must complete all four CIAB exams (1,2,3,4)

There are other designation programs also available through IBABC for completion, including the Canadian Professional Insurance Broker program and the Canadian Certified Insurance Broker (CCIB) program. The CPIB enables you to apply for credits from some post-secondary courses for the completion of the program.

Maintain Your Licence

All licenses assigned by the Insurance Council of B.C. are perpetual; they do not expire, but licensees are expected to file by June 1 each year to confirm that they have met licensing requirements. Licensees are still likely to transfer licenses within employers and to revise licenses.

In order to sustain your General Insurance license, you must satisfy the council’s current Continuing Education (C.E.) requirements below:

For all license years, or portion thereof:

If you have an accredited designation* you must have four qualified hours of advancing education; OR

If one has been licensed as a general insurance agent or salesperson for at least five out of the last seven years in a Canadian province, and you don’t have an approved designation, you must maintain six qualified hours of continuing education; OR

Suppose you haven’t been licensed as a general insurance agent or salesperson agent for at least five out of the last seven years in a Canadian province, and you do not have an authorized designation. In that case, you must use eight qualified hours of continuing education.

*Approved Designations: CIB, CIP (formerly AIIC), CCIB, CAIB, FCIP and CRM. If you have a designation from other countries, it will be considered where it is proved to the council that they are similar to one of the recommended Canadian designations.

Are You Moving to B.C. for Insurance Broker Employment?

The Pre-licensing and licensing courses, including the Canadian Accredited Insurance Broker (CAIB) program and Fundamentals of Insurance, are mostly standard across Canada, with some regional content attached to reflect differences in provincial regulations and insurance products. Brokers with an active license from a different Canadian province are usually qualified to transfer their licenses as long as they have gained employment at a brokerage in B.C.

For Employers

IBABC member brokerages have access to employee recruitment, retention and training resources that give them a competitive edge.

How to Become an Insurance Broker in Quebec

Regroupement des cabinets de courtage d’assurance du Québec (RCCAQ) is the provincial association that designates brokers in the province. It is a major stakeholder in broker training.

 The Broker 101 (personal P/C insurance) and Broker 102 (commercial P/C insurance) self-controlled online courses offered by RCCAQ assist interested individuals in preparing for the Autorité des marchés financiers (AMF) examination while planning to become an insurance broker.

To sell financial products and services in Québec, you must have the right to practice issued by the AMF via a representative’s certificate in damage insurance. To be fit for examinations, candidates have to successfully finish specialized training through the education options described by the AMF for damage insurance, for instance, holding a Diploma of Collegial Studies from Québec or having a more generic bachelor’s, masters or doctoral degree from a Canadian university. However, there are numerous options to choose from.

Hence the educational component is concluded, future insurance professionals must pass examinations depending on the sector or sector class where they want to practice, including personal lines damage insurance, damage insurance, or commercial lines damage insurance.

Following the successful passing of the exams, the candidate must begin a probationary period, during which they can commence the insurance workforce under the surveillance of a licensed representative. They must complete 28 hours of work every week in this capacity throughout the 12 weeks period for a sector or six weeks for a sector class. Following the completion of this requirement, the individual must apply to the AMF to obtain a representative’s certificate before the validity of the examination expires.

Requirements for candidates who want to sell life insurance (insurance of persons) are:

Step 1: Satisfy the minimum qualifications.

Such minimum qualifications include but are not limited to a diploma of collegial studies from Quebec, Diploma of Collegial Studies (DCS) in Insurance and Financial Advisory Services, University-level certificate in insurance of persons acknowledged in an agreement to that effect within the AMF and a university, and so on.

Step 2: Pass the AMF examinations

The AMF requires future professionals to pass their examinations in order to ensure they have the necessary skills to advise clients appropriately.

Step 3: Complete a probationary period

Once you have succeeded in all the required examinations, you must finish a 12-week probationary period where you will apply real life the knowledge and skills necessary to practice your profession under a supervised setting. Trainees must work at least 28 hours a week. All completed exams must be valid when starting the probationary period.

Step 4: Apply for certification

You must tender an application to the AMF before the validity period of your examinations expires. If the validity terminates during your probationary period, you have thirty days from the end of this period to apply.

While the AMF is processing your application and on receipt of a notification to this effect from the AMF, the probationary certificate will continue in effect for a maximum of 45 days as of the expiration of the probationary period.

Requirements for Candidates Who Want to Sell Accident and Sickness Insurance are:

  • Step 1: Satisfy the minimum qualifications
  • Step 2: Pass the AMF examinations
  • Step 3: Complete a probationary period
  • Step 4: Apply for a representative’s certificate

What Will an Insurance Agent Sell? 

Life agents sell life insurance policies, disability insurance, health insurance policies, business life, group insurance, and disability insurance. They also sell two types of investments: segregated funds and annuities.

Life insurance policies fall under two broad categories: Insurance for a period of time (term insurance) and insurance until death (called permanent insurance). 

What Is Needed to Maintain a License after Acquiring It?

To maintain your license, you must renew it yearly and pay the required fee, and you must have fulfilled the continuing education requirement for the province to which you are applying.  

What Other Accreditations Are Open to Those Who Sell Life Insurance and Financial Products?

Life insurance agents who already own their licenses often pursue extra studies to enhance their knowledge and worth to customers. These include the:

Certified Financial Planner® (CFP®): This is a universally recognized designation provided in Canada by the Financial Planning Standards Council (FPSC). For more information, see www.fpsc.ca.

Chartered Life Underwriter® (CLU®): Awarded by Advocis, the CLU is defined as Canada’s premier wealth transfer and estate planning specification: check www.advocis.ca/education/CLU.html.

Registered Health Underwriter (RHU): The Institute for Advanced Financial Education grants this designation. This designation is being superseded by the Certified Health Insurance Specialist (CHS) designation from September 1, 2011. This new designation is meant for advisors hoping to specialize in the field of living benefits: see www.iafe.ca.

Fellow of Canadian Securities Institute (FCSI): FCSI designation deals with every facet of financial services – see www.fcsi.ca.

Registered Financial Planner™ (R.F.P. ®): provided by The Institute of Advanced Financial Planners: see www.iafp.ca.

Chartered Financial Analyst (CFA): see www.cfainstitute.org.

Fellow, Institute of Canadian Bankers (FICB): check

www.csi.ca/student/en_ca/designations/pbp.xhtml. for more information.

Fellow, Life Management Institute (FLMI): LOMA, an international organization, represents the FLMI. It promotes expertise in the processes, products and management of life and health insurance companies. See www.loma.org.

The Canadian Securities Institute and its affiliate the Canadian Bankers’ Association also offer the following designations:

The Chartered Strategic Wealth Professional (CSWP™):www.csi.ca/student/en_ca/designations/cswp.xhtml

Personal Financial Planner (PFP®):www.csi.ca/student/en_ca/designations/pfp.xhtml

Canadian Investment Manager (CIM):www.csi.ca/student/en_ca/designations/cim.xhtml

Member, Trust Institute (MTI®):www.csi.ca/student/en_ca/designations/mti.xhtml

What Do You Need to Do to Become an Insurance Broker?

Insurance brokers can work with a high school diploma, though a bachelor’s degree in insurance, finance or economics is helpful. A state license is required, and an insurance broker must hold multiple licenses if they deal with more than one type of insurance.

Should I Become an Insurance Broker?

One of the most comforting aspects of being an insurance broker is the satisfaction you get by assisting others in finding the right Health Insurance policy at the right cost. Your work can differentiate whether a client can get coverage and protect their future health and financial security.

What Is the Most Profitable Insurance to Sell?

It should not come as a huge surprise that auto insurance is the best selling and most profitable insurance product. 
Property or home insurance basically covers anything that can pose a risk to your clients’ property like theft, flood, fire, and inclement weather.

What Exactly Does an Insurance Broker Do?

An insurance broker is an insurance professional whose job is to represent consumers in their quest for the best insurance policy for their needs. They work hand in hand with their clients to search for conditions, coverage, terms, and prices then recommend the insurance policy that best suits the bill.

What is the difference between insurance agents and brokers?

In a nutshell, the cardinal difference between an insurance agent and a broker is that an insurance agent represents the insurance company. In contrast, the insurance broker represents the insurance buyer, an individual or business.

What Type of Insurance Broker Makes the Most Money?

The sales commission life insurance agents might earn in the first year if they are on a commission-only salary; that’s the highest commission for any type of insurance.

What Is the Best Type of Insurance to Sell?

1. Auto Insurance: It is one of the best selling insurance products.
2. Home Insurance: This is a sort of property insurance that covers any loss or damage to someone’s house.
3. Life Insurance: Life insurance is well because many want to leave their family members in a good state in case they pass away.
4. Health Insurance: This type of insurance is intended to cater to one’s full or partial medical costs if they fall ill.
5. Product Liability Insurance: Manufacturers may endanger different people through their products. This type of insurance is vital to them because they are protected from bankruptcy if they are slapped with a lawsuit.

How Do I Succeed in Insurance Sales?

Ten tips for new insurance agents
1. Dress for success. You are addressed by the way you dress.
2. Find a full crew of people to support you.
3. Learn how to market yourself.
4. Brush up on your customer service skills.
5. Relate to your prospect or client. 
6. You are in sales; never forget that.
7. Transparency is necessary during the sales process and after.
8. Proofread all written communication. 

How Do You Sell Insurance Effectively?

Here Are Ten Tips Every Insurance Agent Should Know to Close More Deals on Sales.
1. Listen More, Talk Less.
2. Don’t Sell Products, Provide Solutions.
3. Highlight Benefits over Features.
4. Leave Something to Remember You By.
5. Set Goals and Deadlines.
6. Take Advantage of Networking Opportunities.
7. Ask for Referrals.
8. Learn Something New Each Day.

How Do Insurance Agents Get Clients?

Five ways to get more clients for your insurance business
1. Network in your community. You already know that networking is crucial for bringing in new clients.
2. Find your niche.
4. Prospect every day.
5. Partner with other professionals.
6. Nurture your leads.

How to Become an Insurance Broker in a Nutshell

Now you have knowledge of how to become an insurance broker by:

  • Acquiring the required education
  • Obtaining the necessary license
  • Get employed by an agency or start your own company depending on your level.

A career as an insurance broker affords you a line-up of possibilities and privileges that you could not have otherwise attained. If you love meeting people, creating your own business and work environment and working in a profession where you can assist people, then a career as an insurance broker might be just what you need! 

Related post: How to become an auto insurance appraiser

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