A career as an insurance broker can be fulfilling, since this is mainly about helping people find the right insurance company to meet their needs. Becoming an insurance broker means that you get to work with different clients like individuals, organizations, or even entire communities.
But before you embark on this career path, you need to get your insurance broker license. Whether you’re a fresh graduate joining the workforce, an experienced professional making a career change, or even an immigrant finding your place in a new community, this is an exciting and worthy endeavour.
Getting an insurance license is not only the first step to a long and fulfilling career. This is also a good credential to have if you want to set up your own agency or progress into managerial roles within the industry.
No doubt you will have many questions about becoming an insurance broker: how do you get your insurance broker license? What do you need to do to maintain your license? How much does it cost to become a licensed insurance broker? Insurance Business sheds light on these questions and more in this guide.
This is a legal requirement that enables individual license holders to work as insurance brokers in their respective provinces or locales. The insurance broker licensing process requires specific education in the field of insurance brokerage, along with training and examinations.
Licensed insurance brokers must adhere to the regulatory compliance standards set by their province’s insurance authorities. In most cases, insurance brokers must also have membership in their respective province’s insurance brokers association and stick to their code of ethics.
There are important reasons why you need to have an insurance broker license. Having the license signifies that you have successfully completed specific courses on the essentials and complexities of insurance and that you know how to navigate them.
Apart from serving as certification that you are knowledgeable and competent in delivering insurance broker services, an insurance broker’s license is useful for these purposes:
Insurance brokers in Canada must obtain their license from insurance authorities in their respective provinces. This licensing system is a way of ensuring that those who apply for the license are eligible and meet the specific educational requirements and ethical standards before they service clients.
The insurance broker license is proof that the license holder is and can be held responsible for their actions, as they are held to a code of conduct set by the insurance authority in their province.
For instance, insurance brokers in Ontario must be members of the Registered Insurance Brokers of Ontario (RIBO) and agree to comply with its code of conduct. A license also signifies that the broker is expected to act in the interests of their clients, be transparent in their dealings, and make transactions with courtesy and in good faith.
Requiring an insurance broker to get a license serves to protect the consumers as well. Having a license means that these professionals are well-educated and well-equipped to help their clients avoid any potential pitfalls. It also signals to potential clients that the insurance broker is well-versed in industry trends, laws, market conditions, and insurance products. Simply put, an insurance broker license is the best sign clients have that they are in good hands.
Insurance brokers need to maintain their licenses by earning continuing education (CE) credits. This is to ensure that they remain updated on industry trends, developments, and changes in insurance regulations. For instance, without the CE requirement, not many insurance brokers or agents would know about satellite insurance and how to act as intermediaries to tech startups.
Thanks to CE, clients have greater reassurance that insurance brokers stay competent and competitive, consistently delivering high-calibre services. The insurance broker license and its CE requirements ensure that the Canadian insurance sector continually adapts to the ever-evolving insurance environment.
CE can help insurance brokers keep in step with industry developments, like meeting the rising demand for insurance that protects against cyberattacks.
To obtain your insurance broker license in Canada you will need to take several steps:
At the minimum, you must have a high school diploma or complete an equivalent GED course. You are not required to have a college degree, although pursuing one can give you an edge by getting more familiar with insurance terms and concepts.
Apart from a high school diploma or GED, there is no other educational prerequisite for this license.
However, a college degree that has courses related to insurance, including economics, accounting, law, marketing, and business, can give you an edge.
Once you have the prerequisite education, you can proceed to take courses on insurance brokering. There are many different course providers that allow you to have in-person or online classes and supply you with study kits. Courses for obtaining an insurance broker license should teach you the essentials like insurance ethics, regulations, and industry practices. You can get courses offered by the Insurance Brokers Association of Ontario (IBAO) or other similar institutions.
After completing the courses, you must take and pass the insurance broker licensing exams. Keep in mind that different regions and provinces have different exam dates and procedures. These can be in-person or online exams. The licensing fee can vary, usually costing about $250 to $300, depending on your location.
After you pass the licensing exam, you need to get employment with a registered insurance brokerage. This is essential, since insurance broker candidates are required to gain practical work experience within a year after taking the exam. In some instances, the insurance brokerage may help pay for your exams if they think you are a good fit for the role and the company.
Note that passing the exam is not a guarantee that you will obtain an insurance broker license.
Insurance broker candidates can apply for their license via the regulatory authority in their province.
Make sure to prepare the necessary documents, such as your proof of education, employment confirmation, and a background check confirming that you do not have any criminal record.
After you’ve successfully completed the exams and application process, you must maintain your status as an insurance broker by completing continuing education (CE) credits.
The main purpose of these credits is to ensure that insurance brokers stay up to date with any regulatory changes, industry standards, and insurance trends. You will need to complete a certain number of credits every two years to maintain your insurance license.
As insurance broker licensing can vary by province or territory, check with your local insurance council and regulations to ensure that you comply and have all the necessary qualifications. Insurance brokers must remain faithful to ethical practices and maintain the necessary insurance, such as errors & omissions coverage, for state compliance.
As you take courses for your insurance broker license, you may notice there are different levels of exams. There are three levels, each covering different areas of insurance, with specific functions, requirements, and implications for your insurance career.
The level 1 exam is the starting point for those breaking into an insurance broker career. This exam level covers fundamentals like:
To pass, candidates must score an overall grade of 75% and score no less than 60% in each of the sections. After passing and getting their license, insurance brokers who took the level 1 exam can work but only under the supervision of level 2 or level 3 brokers.
To give you an idea of what the level 1 exam is like, here are some of the questions that may come up in the exam:
At level 2, insurance brokers can do their trade without the supervision of a higher-level broker. Level 2 brokers can interact with clients and have the authority to sign insurance contracts independently.
To get to level 2, insurance brokers must have completed the level 1 exams and other exams like Canadian Accredited Insurance Broker 2 (CAIB2) and CAIB3.
The level 2 exam goes deeper into the technical and commercial aspects of insurance. The intention is to impart brokers with the skills necessary to operate independently in the insurance industry. As with the level 1 exams, the passing grade is an overall score of 75%, but with specific passing rates for each section.
This exam is meant for insurance brokers who want to take on managerial or ownership roles. Level 3 is the highest exam tier and requires candidates to pass the level 2 and CAIB4 exams.
This exam level also requires at least two years of relevant work experience within the last five years. Exam level 3 includes advanced insurance brokerage topics like:
Once an insurance broker passes the level 3 exams, they can effectively manage or supervise brokerages and should have the essential knowledge and skills to ensure compliance with insurance regulations.
The fees for getting an insurance broker license in Canada can vary depending on the insurance regulator in each province or territory. The Insurance Council of Manitoba, for example, charges these fees for their broker licenses and other insurance licenses:
|
Type of license |
Price |
|
General Insurance Agent Broker License |
$185 (For all levels, 1, 2, 3) |
|
Insurance Adjusters License |
$90.00 - Assistant Adjuster License $200.00 - Adjuster License |
|
Life Insurance Agent License |
$150.00 |
|
Accident & Sickness Insurance Agent License |
$90.00 |
All insurance companies or brokerages in Canada have to follow the rules and regulations set by the province or territory where they conduct their business. If any of these insurance companies commit any violations, they are held accountable by provincial and territorial insurance regulators. Insurance fraud is taken very seriously, and brokers who commit these offenses can expect heavy penalties.
These regulators enforce consumer protection laws and oversee the licenses and conduct of insurance agents and brokers in their respective province or territory.
The process of becoming an insurance broker starts with your high school diploma or GED and obtaining a college degree that can teach you basic knowledge about insurance, but this is optional. Getting your insurance broker license is relatively simple, since only a few prelicensing courses are required.
You will start on the level 1 exam, then you can take the level 2 and 3 exams later as you progress in your career. If you’re looking for industry leaders to model your career from, our Best in Insurance Special Reports page is the place to go. Recently, we unveiled our five-star winners of The Best Young Insurance Professionals Under 35 in Canada. Find out how these professionals rose through the ranks to become among the industry’s respected leaders in this special report.
Now that you know how to get your insurance broker license, is this a career path you will consider? Let us know your thoughts in the comments.
