It's unacceptable and unethical for you to become the owner of a life insurance policy on a client when you do not have an insurable interest in the life insured (you must have something to lose if the risk occurs). You may not accept an assignment of a policy or the benefits of a policy from a client. This applies whether or not you paid the client for the assignment. Similarly, you must not knowingly allow a client to appoint you as a beneficiary unless the client is a family member or close personal friend.
The Sun Life Financial Advisor Code of Conduct makes specific reference to conflicts of interest.
Personal and professional integrity is the cornerstone of your business. Integrity requires honesty, reliability and ethical behaviour at all times to maintain the trust and confidence of your clients. You must remain impartial to provide services and products suitable for your clients. To act fairly and maintain client trust, you must avoid conflicts of interest or the appearance of a conflict of interest. Where a conflict of interest exists or has the potential to exist, disclose it promptly to the client.
What can happen if you violate these ethical standards?
- You may be guilty of illegal trafficking or trading in life insurance policies, fined or sent to jail.
- The assignment could be considered null and void and any claim denied.
- The client or their family could sue you.
- Your licence as a life insurance advisor could be in jeopardy and your contract could be terminated.
If you are currently involved in a situation that might violate these ethical standards, bring it to our attention immediately by contacting Qualbus.