Purpose

Insurance Depot Ltd. is committed to the highest standards of ethics in the conduct of its business and so complying with all laws and regulations. Insurance Depot Ltd. will always deal with integrity in regard to our customers.

This Code of Conduct sets out the standards to which we expect our distribution partners and producers to adhere in their dealings with clients and in their representation of Insurance Depot Ltd. It is intended to supplement existing codes of ethics or conduct developed and published by the Canadian Association of Insurance and Financial Advisors (CAIFA), as well as the codes of ethics issued by provincial regulatory bodies. Parts of these codes may be the subject of provisions or regulations of the Insurance Acts of the provinces and as such are enforceable as law.

Many of the areas covered by this code of ethics are subject to the CLHIA Guidelines on Reporting Unsuitable Activities by Producers. Under these guidelines, all life insurance companies are required, following an investigation by the company, to report to the provincial regulator any activity by producers that it reasonably believes to be unsuitable. Serious misconduct could be as a result of a single incident or occur more than once and therefore be considered part of the producer's regular method of conducting business.

This code is intended to supplement the applicable Insurance Depot Ltd. contract under which an individual or corporation operates. It applies to conduct and activities with respect to all products and services offered by Insurance Depot Ltd.

Responsibilities for the Broker

The interest of clients and prospective clients should be placed before the interests of the broker at all times during the sales and service process. Recommendations must be for the appropriate amount of coverage and product that best meets the client's circumstances. The broker is to provide service, advice or information only where he/she is licensed and where their knowledge makes them competent to do so. Brokers should not offer legal or other professional advice outside the scope of their knowledge or professional standing.

Needs of Client

It is expected that brokers will base their recommendations only on the assessed needs of the client or potencial client, after gathering facts on which to base such recommendations, and considering the client's financial situation and tolerance for risk.

Obligations of the Broker

1. Legal Obligations

   Sound business conduct implies compliance with the laws and regulations that apply directly to the life insurance industry. Brokers must be aware of these laws and regulations and be familiar with their legal obligations.

2. Ethical Obligations

   The life insurance industry is a business of trust. Brokers are expected to earn that trust through a set of high ethical values in dealing with their clients and Insurance Depot Ltd.

Making Representations

Producers are required to make representations to clients and prospective clients that contain clear, relevant, honest, complete and factual information. They will sell the products of the companies that they represent on their merits and will refrain from discrediting or defaming competitors' products and services.

When presenting the terms and conditions of the company products, they will do so accurately, fully explaining both the guaranteed and non-guaranteed values and features.

Holding Out

The term "holding out" refers to how an agent presents him/herself to the general public. That is, brokers' business cards, stationery, advertising and marketing materials must be reviewed to ensure that they do not intentionally mislead the consumer, with regards to credentials or designations, or the ability to provide advice or service.

Producers should use only company approved marketing materials. Personally produced materials including direct mail letters, sales aids, web sites, newspaper and radio ads, seminar presentations or presentations using PowerPoint or similar software, that include the company's name or corporate logo or that present the company's products, must comply with the standards and be approved by the individual companies that they represent.

Sales Illustrations

Brokers must comply with the CLHIA Guidelines for Individual Life Insurance Illustrations and should use only approved illustration software to illustrate the products of the companies they represent to clients and prospective clients.

Producers must submit illustration, signed by themselves and the applicant, with all applications submitted to the company. The illustration must match the sale that was made, details of which are contained in the submitted application.

Signing Documents

A broker must not sign his/her client's name to a document even if authorized to do so by the client. It is imperative that all documents only be signed by the owner of the policy, and where necessary the beneficiary, and that these be authentic. Any attempt by anyone to sign a document on behalf of the policy owner or beneficiary, even where permission to do so has been received, constitutes a forgery and a criminal act.

Similarly, a broker must not sign as witness to a signature he/she has not actually witnessed, nor to a signature known to be forged. Nor must a broker obtain a client's or prospective client's signature on a blank form.

Payments

Brokers shall not pay any premium without first being paid the amount thereof by a person entitled at law to make such payment.

Brokers must not remit, on behalf of clients, payment for premiums or other transactions using a personal cheque or a cheque issued by the broker's company. Any such payment will be not be accepted.

Brokers must not accept cheques or money orders from clients made payable to "cash" or to the broker. All cheques or money orders must be made payable to the life insurance company.

Insurance Depot Ltd. will not accept cash from brokers or clients.

Replacements

All provinces in Canada have regulations under their respective Insurance Acts dealing with replacements. Brokers are expected to be familiar with these regulations and to carry out their requirements, particularly in regard to disclosure and disclosure statements and notification to other companies.

These apply to both internal and external replacements. Replacements are not by themselves evidence of unsuitable conduct; however they should only be undertaken when they are in the best interests of the client.

Twisting

Brokers must not engage in "twisting" which is the unethical act of persuading a policyholder to drop a policy solely for the purpose of selling another policy, without regard to possible disadvantages to the policyholder. It can also involve using policy values, either through loans or the redirection of dividends, of one policy to purchase another.

Rebating and Money Laundering

Money laundering is the act of transferring proceeds, generated by criminal activity, into the marketplace with the intention of concealing its illegal origin. Under federal rules, it is mandatory to report suspicious transactions where you or employees suspect that the transaction is related to a money laundering offence. Such suspicious transactions must be reported to the Financial Transactions and Report Analysis Centre of Canada (FINTRAC). These rules not only extend to administrative staff but also to life insurance brokers.

Under no circumstances must brokers rebate premiums to clients or engage in any activity that could be interpreted as rebating. Rebating is the making of an agreement as to the premium to be paid for a policy that is lower than that set forth in the policy. It also includes paying or rebating whole or part of the premium or any consideration or thing of value intended to be in the form of a premium rebate.

Records and Documentation

Records should be maintained on every account that passes through your office.

Segregated Funds

Segregated funds are generally considered to be long term investments. Excessive trading in units of these funds, with the object of realizing short term gains, may not only harm the fund's performance but may also affect the value of other investors' holdings in the fund. Brokers should refrain from excessive trading on behalf of a client, bearing in mind the negative impact this may have on the fund's performance and that of their other clients who may have holdings in the fund. In particular, brokers must not engage in daytime trading.

Brokers who act for clients on transactions permitted under the terms of a Limited Power of Attorney (LPOA) may only act after discussing and securing the agreement of the client. The only acceptable LPOA for this purpose is one approved for use by the life insurance company.

Compensation or Payments to Third Parties

Brokers shall not pay or share compensation from the sale of insurance with any third party(ies) who does not hold an applicable insurance licence or equivalent certificate. This includes gifts of value or monetary payments.

Gifts or payments from a referral may expose the broker to a charge under the Insurance Act for sharing compensation with a person who does not hold an insurance license. If the person receiving the gift or payment was found to have been in a position to influence the purchase, a charge of rebating may also apply.

“Know Your Client” Rule/Product-Client Suitability

Brokers must make every effort to ensure they have made a diligent and business-like effort to analyze their client's needs, objectives and financial circumstances in order to determine the appropriateness of the produce and/or other recommendations being made.

Suitability of Recommendations should be documented through use of fact finders or other appropriate means.

Tied Selling/Inducements

It is an offence to make the purchase of product A conditional upon the purchase of product B. Brokers must refrain from any attempt to impose this or other conditions on any client.

Brokers must also not make any payment or provide any gift, or any offer to pay or give, directly or indirectly, any money or thing of value as an inducement to convince any prospective purchaser to buy insurance.

Privacy & Confidentiality

Brokers have a duty to maintain complete privacy of all information concerning a client. A broker shall:

• Use only lawful means to collect personal information.
• Inform the client what information must be disclosed in order to conduct business on the client's behalf.
• Obtain confidential information regarding a client's personal or business affairs only directly from, or with the permission of the client.
• Not disclose information concerning the client to any third party without the client's written authority to do so.
• Disclose information when it is required by order of lawful authority
• Protect all personal information about a client with appropriate security safeguards.

In addition, brokers must not make photocopies of applications or medical reports required by life insurance companies in the normal course of business. Conflict of Interest

The activities a broker is involved in, other than the practice of insurance, must not compromise or discredit the industry. A broker shall:

• Disclose to a client all conflicts of interest or potential conflicts of interest associated with a recommendation.
• Disclose if a conflict of interest exists.

Complaint Handling & Reporting

If a producer is alleged to have acted inappropriately, an investigation must be performed in good faith to determine the circumstances surrounding the activity.

The GA reports findings to the insurance company for whose products the representative solicits applications as well as, to the insurance company (if applicable) that sponsors the producer's license. Such findings will include information concerning the investigation conducted, and about the disciplinary action taken.

If the complaint has been forwarded to a third party or a broker for handling, the GA will follow up with the broker or third party to ensure that the complaint has been resolved satisfactorily and an update to a complaint log should be made.

Complaint Log

The existence of a simple, yet comprehensive complaint log is important. Having the main details of any complaint in one format ensures that all parties involved are informed and that, should a client wish to be apprised of what action has been taken to follow-up, the broker will be able to provide this information on a moment's notice.

The complaint log is also an indispensable reporting tool that will assist you in the event of an audit or regulatory investigation. If all complaints are summarized in one format, they are easily viewed and exhibit an impression of organization and structure.

At a minimum, the complaint log should summarize the following:

• Client name
• Policy or document number
• Broker name
• Date of complaint, (written or verbal)
• Recipient of complaint
• Individual handling the complaint
• Summary of complaint (details should include whether a regulatory body is involved.)
• Steps towards resolution
• Statement of resolution
• Date of resolution