Duties to the Public and Market Integrity
The public interest dimension
Life insurance depends on public trust. Duties to the public include fair dealing, honest marketing, preventing fraud and money laundering, and refusing to participate in arrangements that harm consumers or the market. Agents must not misrepresent policy features, must not use high-pressure or scare tactics, and must not sell to clients who cannot afford the product. Market integrity also requires accurate record-keeping and cooperation with regulators.
Anti-money laundering and fraud
Agents are front-line observers under Canada's anti-money-laundering regime. Red flags include unusual payment methods, reluctance to provide identification, policies inconsistent with the client's known circumstances, and requests to assign or surrender policies shortly after issue. The duty is to know your client, verify identity, keep records, and report suspicious transactions internally. Agents are not investigators; they escalate.
Traps to watch
- Treating AML as a back-office function rather than a front-line obligation.
- Assuming a client's wealth justifies skipping identification or source-of-funds questions.
- Ignoring "twisting" or churning as merely aggressive sales rather than a market-integrity issue.
- Failing to recognize that misleading advertising harms the whole market, not just one client.
Rule of thumb
If a transaction feels designed to hide something from the insurer or the regulator, it is a market-integrity issue. Document the red flags, escalate internally, and never help structure a transaction to avoid scrutiny.