You may have heard how lucrative and fulfilling the career of an insurance broker in Canada can be, and that is no exaggeration. For instance, auto insurance is mandatory. With millions of motorists in Canada, you will not lack for a steady income if you become a broker for this type of insurance.
Other personal or commercial lines of insurance can contribute to a profitable and enduring career if you offer them too. But aspiring insurance brokers in Canada should know that before they can launch their careers, they must be licensed.
The essential starting point is the Level 1 insurance licence. In other provinces it can be called other names like the Entry-Level Broker licence, Level 1 competency licence, or Entry-level licence.
In this article, Insurance Business delves into this prerequisite for insurance brokers in Canada. We’ll get into questions like:
The Level 1 insurance licence is a legal requirement that allows individuals to sell and advise clients on general insurance products like home, auto, and business insurance. This licence is highly regulated, and the requirements to obtain it can vary from province to province.
The Level 1 insurance license allows individuals to work in many different positions in an insurance brokerage, like handling personal lines transactions. It’s important to note, however, that Level 1 licensees can only work under the supervision of a more senior insurance broker.
Before embarking on the path to become an insurance broker in Canada, candidates should meet basic eligibility requirements:
Obtaining the Level 1 insurance license typically involves meeting certain educational requirements, taking courses, passing exams, and accumulating relevant work experience. While the exact qualifications vary by province, these are the general steps you must follow:
Before pursuing the entry-level licence, you must be at least 18 years old (19 in BC and New Brunswick). In most provinces, you only need a high school diploma or GED equivalent – but BC is the exception.
In BC, you need to earn a college degree first. Almost all provinces require that you pass a criminal background check. Prepare the necessary documentation for all this beforehand.
If you want to know the specific steps on how to get your insurance broker licence in British Columbia, check out this guide.
With the eligibility requirements met, you can take pre-licensing courses. The most popular course providers are:
These courses cover essential topics to prepare you for the Level 1 licensing exams, including insurance regulations, ethics, and industry practices. Most course providers offer in-person classes or online classes with study kits. You can check with the course provider to find out their full range of options.
Once you’ve completed the pre-licensing courses, take the Level 1 licensing exams. Keep in mind that the exam schedules and dates vary by province, and the exams can be in-person or online.
The exams may have different names and are overseen by different regulatory authorities of each province. For example, the Insurance Brokers Association of Manitoba oversees the Canadian Accredited Insurance Broker 1 or FOI exams. Here’s a list of the different exams and their administrative bodies:
|
Province/territory |
Required exams |
Exam administrator |
|---|---|---|
|
Alberta |
Level 1 exams |
Alberta Insurance Council (AIC) |
|
British Columbia |
Fundamentals of Insurance or CAIB1 exam |
Insurance Council of BC (ICBC) |
|
Manitoba |
Fundamentals of Insurance or CAIB1 exam |
Insurance Council of Manitoba (ICM) |
|
New Brunswick |
Fundamentals of Insurance |
Financial and Consumer Services Commission |
|
Newfoundland and Labrador |
CAIB1 exam |
Service NL |
|
Northwest Territories |
General Insurance Examination from the Insurance Institute of Canada |
Superintendent of Insurance |
|
Nunavut |
Foundational exam for insurance brokers |
Office of the Superintendent of Insurance (OSI) |
|
Ontario |
Level 1 exam |
Insurance Brokers Association of Ontario (IBAO) Insurance Institute of Canada (IIC) |
|
Prince Edward Island |
Insurance Brokers Association of Canada’s Fundamentals of Insurance course /Insurance Institute of Canada’s C11 or C81 |
Office of the Superintendent of Insurance, Department of Justice and Public Safety |
|
Québec |
AMF licensing exams |
Autorité des Marchés Financiers (AMF) |
|
Saskatchewan |
General Insurance Council Bylaw examination and General Insurance Council Bylaw Examination, along with the CAIB1 exam or Fundamentals of Insurance Exams |
Insurance Councils of Saskatchewan |
|
Yukon |
Parts 1&2 of the Insurance Institute of Canada's General Insurance Essentials (C81 and C82) |
Office of the Superintendent of Insurance licenses |
Candidates typically need to get a grade of at least 70 percent to pass the exams, although this can vary across the different provinces and territories. You can check our extensive guide on which courses and exams you need to take to get an insurance broker licence in your jurisdiction.
Securing employment at a registered insurance brokerage is mandatory after passing the Level 1 exams. Most provincial regulatory authorities mandate that aspiring brokers can only apply for the licence when they are employed in the industry.
Candidates are also required to accumulate practical work experience within a year of passing the licensing exams. Be sure to have all the necessary documents ready. These include certificates of course completion and other proofs of education, employment confirmation, and completed criminal background check.
Once you’ve been hired at a registered insurance brokerage, your employer will sponsor and submit your application with the required documentation. In general, your employer may pay for the licensing or exam fees. After applying for the Level 1 insurance licence, it can take several business days for the relevant regulatory authority to review your application.
Most regulatory bodies require insurance brokers to maintain their licences by taking additional courses. To ensure that your level 1 insurance licence stays active and up-to-date, you must take continuing education (CE) courses and accumulate CE credits.
This ensures that insurance brokers also remain updated on any changes to regulations and industry standards and keep up with insurance trends. In most cases, level 1 licensees are required to complete a certain number of CE credits every two years.
Because of the different fee structures and requirements across provinces and territories, the cost of getting the Level 1 insurance licence can vary. Expect to pay fees like course enrollment, exam fees, and the license application.
Course enrollment can cost around $250, while exam fees can range from $50 to $400, depending on the number of exams the province and regulatory authority requires.
As for the license application fee, this can cost between $100 and $400. All told, candidates may have to spend between $400 and $1,000 for courses, exams, and the license itself.
As you continue to practice and ply your trade as an insurance broker, you may want to advance your career at some point and establish your own brokerage firm. Or you may want to branch out to other related fields like banking or finance.
To help you achieve career goals like these, it’s advisable to gain more experience in the industry and couple this with earning more credentials that can expand your knowledge, skills, and credibility.
There are a few important reasons why the Level 1 or entry-level insurance licence is critical for insurance brokers in Canada. These key reasons include:
The Level 1 insurance licence is a basic and vital requirement of provincial regulatory bodies. Insurance brokers must obtain their licence from insurance authorities in their respective jurisdictions. Any individual in Canada starting a career as an insurance broker needs this licence to practice.
With this licensing system, each jurisdiction can ensure those who become insurance brokers are eligible and meet specific educational requirements and ethical standards before they service clients. When the industry is populated with licensed, competent professionals, consumers feel reassured and are more open to purchasing insurance policies. This leads to a sustainable, thriving industry.
Requiring insurance brokers to have this licence can also protect consumers. Such a requirement can ensure that only those who commit to the successful completion of licensing courses and exams move on to become competent insurance brokers. Requiring a licence weeds out those who may not be competent, skilled, or serious enough about working in the interests of their clients.
A licence that brokers can lose due to negligence or willful acts of fraud can ensure a degree of accountability. If brokers didn’t need a licence to earn their income, there would be no incentive for them to be responsible for their actions.
The entry-level licence is evidence that the licence holder is knowledgeable in insurance brokering and can navigate the nuances of insurance brokering for clients. The licence also signifies that the broker agrees to operate within a standard of ethical behaviour.
For instance, the Registered Insurance Brokers of Ontario (RIBO) require membership in their organization and mandates that members strictly adhere to their code of conduct. In effect, the Level 1 insurance licence ensures brokers act in the interests of their clients and generally transact business in good faith.
For the individual who is serious about starting an insurance broker career, yes, this licence is worth it. This is the springboard not only for becoming a broker, but it’s a necessity for getting the more advanced licences for running an insurance brokerage firm of your own – if that’s your objective.
And remember, the level 1 insurance licence is also called the entry-level licence for a reason – there are still level 2 and level 3 insurance licences you can earn to advance your career.
Knowing about the Level 1 insurance licence, will you go ahead and pursue an insurance broker career? Share your thoughts in the comments
