March 2015

 New forms  New questions  BridgeForce Compliance website  BridgeForce Contracting issues

 Screening Confirmation Request ◦ Designed by insurers to allow MGAs to ask about advisors moving MGAs

 1. Status of the contractual relationship between insurer and advisor?  2. Any unresolved debts with the insurer? Efforts to repay?  3. If contract was terminated, would insurer consider re-contracting?  Has company investigated or reviewed a concern/complaint related to market conduct?

 Advisor Screening Questionnaire (ASQ) ◦ Looks like the old CLHIA application for contract ◦ Now asks you if you have  Documented AML program  Written privacy program  Written disclosure statement  Needs-based selling practices

 You need to have all of these – these are old requirements ◦ AML Compliance Regime – since 2008 ◦ Privacy Program – since 2004 ◦ Written disclosure statement – since 2004 ◦ Needs-based selling practices – since the dawn of time (or 2005 when CCIR endorsed the CLHIA Approach)

 Having asked the questions, there may be legal exposure in doing nothing.  Advisors have 3 months from being contracted to get everything in place.

When you apply for a contract with an insurer through us, you will be asked to sign the Code and certify either that ◦ 1. You are compliant OR ◦ 2. You have gaps you have identified and you will repair them within 3 months. ◦ At the end of 3 months, you will be asked again to certify that you are compliant. If you cannot, we contact the insurer for instructions.

liance/ liance/ - It’s all there for you – - Anti-Money Laundering Tools - Privacy Tools - Point of Sale Disclosure - Needs Analyses and KYC And plenty more than that!

 MGAs are expected to engage in risk-based monitoring of advisors.  Where necessary, we may have to review your business.  You are expected to cooperate and produce records and files.

 Regulators say insurers are responsible for the conduct of their agents – even independent agents.  Insurers delegate some of the responsibility to MGAs, who act on behalf of the insurers.  This is the regulatory framework we now all operate under.

 New screening documents are already being used.  Behind the scenes monitoring has always gone on.

 BridgeForce does not intend to institute formal “audits” but will do some reviews and sampling in agent files to satisfy itself, insurers and regulators that  1. It knows its advisors  2. It takes reasonable efforts to detect and prevent fraud and unacceptable sales practices.  3. It complies with Anti-Money Laundering and Anti-Terrorist Financing regulations.

 Most will be based on random selection  We hope to provide something in return, including pointers, sample material, templates to use.

 Reviews can assist you in improving your practices and protecting you from unpleasant surprises.  BridgeForce has committed itself to helping advisors get compliant.

 Please take part in the AML workshop this afternoon.