User:Jason R Watt/LLQP

LLQP (Life License Qualification Program) is part of the Canada regime under which those employed in the financial services sector obtain a certificate allowing the sale of life insurance products. The LLQP is valid in all provinces and territories except Quebec, which uses a separate system altogether.

This is an entry level program. In order to work for many companies, such as Freedom 55 and Sun Life, a candidate must first complete the LLQP. Upon completion of the LLQP, it is possible for the candidate to apply to write the provincial certification exam, successful completion of which will allow the candidate to apply for a certificate (often known as a license) to sell life insurance and related products, such as annuities and segregated funds.

The LLQP does not provide a designation, nor a post-nominal.

Technically, most provincial insurance acts[1] only prohibit somebody from acting as an agent if that person does not carry a certificate to sell life insurance. Agent is defined as one who is financially rewarded for conducting said business.

History

Canadian Insurers experienced some financial difficulties through the late 1980s, continuing on into the 1990s. This was largely the result of declining interest rates on safe, income-producing investments such as bond (finance) and treasury bill, though this was not the only problem. This lead to a wave of consolidation and demutualization amongst Canadian insurers, in an effort to raise capital and cut costs. Internally, many insurers, in an effort to cut costs, chose to eliminate their in-house sales forces. Almost all 'career shops' ceased to exist during this time. There are a few major career shops remaining today, such as those run by Sun Life, Freedom 55, and IGM Financial.

When the career shop was the entry point of choice into the insurance industry, it was normal for new agents to undertake an intensive training program, usually involving a combination of in-house training, field training, and head office training. With the cost-cutting measures so prevalent through this period, it was still necessary for insurers to find ways to distribute their products. Many insurers switched to the insurance broker system. Under the brokerage system, a Managing General Agent(MGA) takes on most of the responsibilities that once fell to the career shops. The difference, as far as the insurers were concerned, was in cost management. Instead of insurers tying up resources dealing with training and human resources management, this burden was now passed directly to the agents, through their MGAs.

For Canadian regulators, this led to some concerns. The Canadian Council of Insurance Regulators (CCIR) and the Canadian Insurance Services Regulatory Organization(CISRO), together in 1997, determined that the decline of career shops and the subsequent move to the MGA system would hurt consumers. The problem that would arise would be that the process that was then in place that would allow a certificate to sell life insurance to be issued was expected to be complemented by an intensive training program. Most MGAs had neither the interest nor the resources to carry out such a program. As a result, CCIR and CISRO announced that there would be a more rigorous examination and study process for those entering into the life insurance industry. The feeling was that by enforcing higher eduational standards at the beginning, new agents would enter into the industry better prepared.

CCIR and CISRO entered into a consultation period, during which time they enlisted the services of education professionals, industry input, and input from other regulatory bodies. They end result was the LLQP Design Document which listed specific educational objectives. The expectation is that every new life insurance agent should know these educational objectives. The educational ojectives are based on [Bloom's Taxonomy|Taxonomy of Educational Objectives].

Once the Design Document was in place, the regulators created exams that students would have to pass in order to be able to apply for certification to sell insurance. The exam originally was a 140 question five-answer multiple choice exam, with a heavy orientation towards case-study style multiple choice questions. Students would be given three hours to complete this exam.

Concurrently, the regulators determined that they wanted to avoid a scenario which had happened in the days prior to the LLQP. Under previous regimes, candidates would sometimes write an exam, fail it, write the next week, and so forth, until they had learned the proper answers to all the questions in the exam. There are anecdotal stories of candidates writing the exam twelve or more times before succeeding. This is not a valid educational process; this candidate has learned the answers to the exam questions, but does not likely understand the underlying material. In order to prevent this, it was determined that, prior to challenging the provincial certification exam, any candidate would have to first be certified by an authorized education provider. Several existing education providers, such as the Canadian Securities Institute (now known as CSI Global Education), the Investment Funds Institute of Canada, and Business Career College were approached to develop textbooks, seminars, and exam processes to validate students in preparation for the certification exam. The intent was to guarantee that any student writing the provincial exam would be well-prepared.

Starting January 1st, 2003, anybody wishing to work as an insurance agent in the common law provinces had to write their certification exam. (There are exceptions, but these are so rarely applied that they should not even be considered.) Since that time, there have been some changes to the LLQP process, but it has largely stayed intact as originally envisioned.

Exam Process

The LLQP Exam Process today incorporates a 140 question, multiple choice exam. Writers are given four hours to complete the exam. In most jurisdictions, exam writers complete a scantron sheet. There are regular exam writes hosted in major Canadian centres, and smaller centres generally have writes on a less frequent, or as-needed basis. For example, there are exam writes every second day in Toronto, while Calgary has a write every Monday.

While the exam is based on identical content in all jurisdictions, there are some differences in how the exam is conducted from jurisdiction to jurisdiction. In Saskatchewan, for example, it is necessary for a prospective agent to complete a bylaws exam concurrently with the certification exam. In most jurisdictions, a prospective agent can schedule an exam write either at any time - this is the case in [British Columbia] and [Ontario] - or upon completion of the exam offered by an LLQP provider, as is the case in [Alberta]. In [Manitoba], though, a prospective agent must have sponsorship from an insurer in place prior to being permitted to write the exam.

Upon completion of the exam, results are normally available very quickly, often the next day. The passing grade in all jurisdictions is 60%. A successful writer will be permitted to go on and apply for a life insurance certificate. An unsuccessful writer will be given two more attempts, for a total of three, and then required to wait six months before writing again. If that further attempt is unsuccessful, then the candidate must wait another six months, and so on.

Feedback from an unsuccessful write is generally not available. The insurance councils do not release old exam questions, nor do they indicate to candidates which questions were answered correctly and incorrectly. In some jurisdictions, it is possible to obtain a breakdown indicating, by topic, which areas a student was strong in, and where a student needs to improve.

Upon completion of the exam, there is no designation granted. Completion of this process simply allows somebody to apply for a certificate to work as an insurance agent. Application is done through the licensing regulatory body for the specific province. A complete list of these is available here.

Results of the LLQP Process

The LLQP process initially came under, and sometimes is still subject to, criticism. It was criticized for making entry into the insurance industry too challenging, and there was a fear that recruiting by insurers and managing general agents would suffer. While there are some who are still critical of the LLQP, statistics maintained by provincial insurance regulators indicate that renewal rates for licenses sit at approximately 94% year over year, a significant improvement as compared to the pre-LLQP era, when renewal rates were typically around 85% year over year.

LLQP Providers

The Canadian Council of Insurance Regulators maintains a list of LLQP regulators. There are two distinct categories of LLQP providers. The first group represents insurers who hold a license to provide the LLQP. These insurers provide LLQP services only for their own employees and potential agents. This group includes:

-Combined Insurance
-Freedom 55
-Primerica
-Sun Life

The second group offers the LLQP to anybody who might be entering the insurance industry, or working in the industry, with somebody besides those listed in the first list. This group includes:

-Advocis
-Business Career College Corp.
-CSI Global Education Inc.
-IFSE/Peel Institute
-ILS
-Insurance Institute of Canada
-Oliver's Learning
-Seneca College