Filing for personal bankruptcy as a life insurance agent in Ontario does not necessarily mean your license with the Financial Services Commission of Ontario (FSCO) will be terminated, nor does it mean you cannot become a life insurance agent.
What are the effects of filing bankruptcy as an insurance agent?
A life insurance agent in Ontario is required to report a personal bankruptcy filing to the FSCO immediately. You will also need to provide a copy of the following forms:
- A signed and dated statement including the specific reasons that led to your filing
- Form 69: Assignment of Bankruptcy
- Form 79: Statement of Assets, Liabilities
The FSCO reviews bankruptcy filings on a case-by-case basis and will decide on the future of your licensing based on your reason for filing, your creditors, and financial situation.
Can I become an insurance agent if I have filed for bankruptcy?
A bankruptcy filing will not prevent you from applying to become a life insurance agent. When you fill out the Life Insurance Agent Application, you will need to declare in Part C: Level I Application and All Renewals whether you have:
“Ever been declared bankrupt or made a voluntary assignment in bankruptcy, or you are currently an undischarged bankrupt.”
If you have gone bankrupt, you will need to include your trustee’s name and address, location of bankruptcy filing, Assignment of Bankruptcy, Statement of Affairs, an explanation as to the reason for the bankruptcy, and provide the date of discharge.
Insurance agents in Ontario may want to file a consumer proposal as an alternative
While a personal bankruptcy filing requires a review of your case by FSCO, a consumer proposal will have less of an impact on your license as an insurance agent. FSCO does encourage you to report a proposal filing, but a consumer proposal does not bring your license up for review.
A consumer proposal is also a better option if your income is commission based and may trigger potential surplus income payments in a bankruptcy.
For more information regarding your specific situation and the potential impact of a bankruptcy filing on your license as an insurance agent in Ontario, we recommend contacting the Financial Services Commission of Ontario directly.
If you are an insurance agent and are struggling to repay your debts, contact a Hoyes Michalos Licensed Insolvency Trustee for a free consultation to review all your debt relief options.
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