If you are an insolvent insurance broker in Ontario, a personal bankruptcy or consumer proposal filing will not necessarily have a negative impact on your registration with the Registered Insurance Brokers of Ontario (RIBO).
What happens when an Insurance Broker files insolvency in Ontario?
A licensed insurance broker is required to report your bankruptcy or consumer proposal filing to RIBO as soon as possible and include the following documentation:
- Form 69: Assignment of Bankruptcy
- A signed and dated statement with the specific reasons that led to your filing
- Discharge order, when available
Your information will be reviewed by the Qualification and Registration Committee at RIBO and they will decide on whether your filing will affect your licensing. Your bankruptcy or proposal information may also be subject to review at a later date should you apply for an Unrestricted registration or assume the responsibilities of Principal Broker of a firm.
If you are beginning your registration as an insurance broker with RIBO and have filed for bankruptcy or a consumer proposal in the past, your filing information must be received before your registration can be processed.
If you operate as a self-employed insurance broker, your income may be based on commissions or residuals earned on previous policies. Insurance policy residuals may be considered income or an asset depending on the terms of the contract. If an asset, residuals will be considered an asset in a bankruptcy. If income, residuals will factor into surplus income calculations. For this reason, a consumer proposal may be a better alternative for most insurance brokers.
For more information about how a bankruptcy or a consumer proposal will affect your RIBO membership, we suggest you contact RIBO directly.
If you are overwhelmed with unsecured debt, you can speak to a Hoyes Michalos Licensed Insolvency Trustee for a free and confidential review of all your debt relief options.
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