To advance their careers, most insurance brokers with the Level 1 insurance licence look to getting more insurance certifications. But sometimes, career advancement may simply involve progressing to the next tier of their insurance licence – the Level 2 insurance licence.
The Level 2 licence is indeed a step up from the Level 1 licence. With the Level 2, insurance brokers in Canada gain the skills, knowledge, and authority to act without the supervision of a senior broker.
Whereas for insurance agents, the Level 2 insurance licence similarly equips them with the knowledge and skills to act as a General Insurance Agent for all personal and commercial lines of insurance.
Because of the importance of the Level 2 licence for furthering insurance broker and insurance agent careers, Insurance Business discusses relevant topics about this licence. Here's everything you need to know.
The Level 2 licence is a certification that allows the licence holder to work independently of a senior broker and handle more complex insurance matters. This licence is applicable to both insurance brokers and insurance agents.
Generally, a Level 2 license allows brokers to operate independently without supervision. Once they obtain this licence, they can interact with clients and sign insurance contracts on their own. Level 2 brokers can also handle more complex commercial insurance policies and offer specialized advice.
Some provinces offer more autonomy with the Level 2 licence. In BC, for example, brokers can complete policies outside of the office without direct supervision and they get to supervise Level 1 brokers.
Meanwhile, for insurance agents, this licence enables them to act as a General Insurance Agent for all personal and commercial lines of insurance. There may be a few variations of how the Level 2 licence applies in some provinces.
In New Brunswick, for instance, an insurance agent who has contracts with multiple insurers is considered a "broker," and must have the General Insurance Agent licence to operate.
In Canada, some provinces and territories require that both insurance brokers and agents have the Level 2 licence. Insurance brokers must obtain the licence but only if they want to operate independently and offer more complex insurance products.
Having this licence indicates that an insurance professional can work without direct supervision and is authorized to sign insurance contracts. So, how do you obtain it? Here are the general steps for getting the Level 2 insurance licence:
For most Canadian provinces and territories, the only formal education required is a high school diploma or GED equivalent. The only exception is British Columbia.
In BC, the minimum educational requirement is for aspiring insurance professionals to have a college degree.
The most critical prerequisite for the Level 2 insurance licence is the Level 1 licence, at least in most provinces. The Level 1 license is the foundational requirement and ensures that individuals have a basic understanding of insurance principles and practices. Most provincial regulatory authorities require the Level 1 before they can work independently or pursue more advanced roles with the Level 2 licence.
While the standard route involves progressing sequentially from Level 1 to Level 2, there may be exceptions or alternative pathways in certain provinces. Some of them may allow professionals with specific designations or qualifications to bypass the Level 1 licence requirement.
For instance, having the Chartered Insurance Professional (CIP) designation or its equivalent qualifications can potentially allow an individual to skip the Level 1 and directly apply for the Level 2 insurance licence. Check with your provincial insurance regulator if they offer any exemptions like these.
Check out this guide if you want to learn more about the top insurance designations to help advance your career.
After meeting the basic education requirements, the next step is to take specific licensing courses. These courses can be taken as in-person classes or online, typically cover topics like insurance ethics, regulations, and industry practices.
The course providers vary across provinces and can have different administering organizations like the Insurance Brokers Association of Ontario (IBAO) and similar institutions.
Candidates must pass the Level 2 licensing exam after completing the licensing courses. Typically, this is administered by the provincial regulatory authority or a designated testing provider. In most cases, the passing grade is 60 percent.
Once a candidate passes the licensing exam, it does not immediately follow them getting the licence. The requisite education and experience of working at a registered insurance brokerage are essential for acquiring the Level 2 insurance licence. In general, aspiring Level 2 licence holders are required to gain relevant work experience within a year of passing the licensing exams.
Their employer must also sponsor their licence application. Some employers may even pay for the licensing fees and application fee, but usually they provide proof of employment and assistance with the necessary documentation.
Keep in mind that some regulatory authorities do not issue the Level 2 licence without the candidate first having the Level 1 licence for at least a year. Most provincial authorities will not approve licence applications if the candidate does not have employment and practical work experience.
Some regulatory authorities may also do a thorough background check for criminal activity, unethical practices, or potential conflict of interest before considering their application.
To maintain the licence, it’s often required of insurance professionals to take CE courses from accredited providers. Completing a certain number of credits within two years is usually required of Level 2 insurance licence holders. However, this can vary depending on the province and their regulatory bodies. Here are some examples:
Ontario – the Registered Insurance Brokers of Ontario (RIBO) requires brokers to earn CE credits every year
Alberta – the Alberta Insurance Council (AIC) requires 15 hours of CE credits every year for licence renewal
British Columbia – Life and/or Accident & Sickness Insurance Agents must earn 15 CE credits, while General Insurance Salespersons and Agents and Insurance Adjusters require eight CE credits
CE requirements can ensure that brokers stay updated on regulatory changes, industry standards, and any recent trends or developments.
Almost all the provinces use a three-tier licensing structure. The only exception to this practice is Québec. Instead of the Levels 1, 2, and 3 insurance licences, Québec requires insurance brokers and agents to take specialized courses from the Autorité des Marchés Financiers (AMF).
There are various fees involved in obtaining this licence, such as course fees, licensing fees, exam fees, and application fees. Due to the location, market conditions, cost of living and other factors, the fee schedules can vary widely across the provinces and territories.
Licensing fees can range between $250 and $300. In Alberta, the exam fee for General Level 2 is $50. Meanwhile in British Columbia, the exam fee is $395 for each of the CAIB 2 and CAIB 3 exams, and the cost of applying or re-applying for the licence ranges from $225 to $250.
In New Brunswick, exam preparation courses cost $449, and the application fee is $125, with a renewal fee of $250. It’s advisable to check with the provincial insurance regulator to find out the exact fees and costs of getting the Level 2 licence there.
Having only the Level 2 licence or progressing onto the Level 3 insurance licence depends on the individual and their career goals. While the Level 3 licence offers more autonomy and greater potential for career advancement, it also requires more education, experience, and responsibility.
“In 2024 RIBO changed their licensing structure to add level 3 management, previously both technical and management components were included in level 2," explained John McClelland, partner of McClelland Insurance, a brokerage firm in Ontario. "Obtaining your level 2 is certainly a good career move, especially for commercial brokers.”
But should insurance professionals be content with the Level 2?
“Anyone who's interested in being a principal broker, designated individual, or supervisor, should obtain their level 3,” McClelland added.
Getting the Level 2 does take some effort, but it is manageable for as long as candidates devote ample time for study.
“The Level 2 license is challenging, especially for those who go straight to the technical exam without preparation,” McClelland warned.
“While it’s possible to take the exam directly, most brokers choose to complete an equivalency course, such as the Canadian Accredited Insurance Broker (CAIB). These courses make it easier to digest the complex technical knowledge required.”
Due to the complex and challenging nature of the Level 2 licence, learners are advised to maximize all available study resources. Here are a few suggestions:
“I would tell those working towards this to commit a few years to taking an equivalency program like CAIB,” McClelland advised. “It can be a lot of work, and taking longer is ok if that allows you to focus on successfully completing each of the four modules.”
“Most people I've met who struggle with level 2 don't have realistic expectations about the time commitment on top of their already busy work and personal lives. Most importantly, start. Our lives and careers only get more busy.”
There are several educational programs and courses that can prepare students for the Level 2 licensing exams. Here are some of the most popular and recognized:
The Canadian Accredited Insurance Broker (CAIB) program enhances competence and confidence and is recognized nationally. Taking CAIB 2 and CAIB 3 are usually required for the Level 2.
Courses for insurance broker certification offered by the Insurance Institute of Canada (IIC) can serve as a good path to Level 2.
Get to know more about the insurance broker courses across Canada in this guide.
“CAIB is the best approach I've found for getting your level 2," McClelland said. "It's broken down into four modules, which make it manageable to take over several years if necessary. Other programs like the Chartered Insurance Professional (CIP) are valuable, but CAIB is my top recommendation because of its direct relevance to a broker's role."
Get to know leaders in the insurance industry who have reached the highest levels of success in our Best in Insurance Special Reports page.
Did you find this guide on getting the Level 2 insurance licence helpful for your career decisions?
Let us know your thoughts in the comments
