Creditor and Travel Insurance Print Version 2017 Internal use only 1/16

Creditor and Travel Insurance Print Version 2017 Internal use only 1/16

Creditor and Travel Insurance Objectives... 3 The Bank Act... 4 Authorized products... 4 Unauthorized products... 5 Guidelines for conversations... 5 CBA Code of Conduct... 7 CBA 6 principles... 7 Training... 8 Disclosure... 9 Timing and location... 9 Summary list... 9 Additional disclosures by province... 10 Negative Option Billing Regulations... 11 Obtain Express Consent... 11 Promotion Practices... 12 Do the right thing... 12 Tied Selling... 12 Capturing health information... 12 Privacy and Personal Information... 13 Continuity of Coverage... 14 Refinancing... 14 Complaint Procedures... 15 Creditor and Travel Insurance Acknowledgement Form... 16 2/16

Objectives We go above and beyond for our customers. Federal and provincial legislation regulates the sale and promotion of insurance products. In this course, you ll learn what s legally required when it comes to insurance products and how to inform customers about purchasing insurance so they feel comfortable with their choices. 3/16

The Bank Act Authorized products Did you know that banks can only offer certain insurance products? Based on the Bank Act you can offer authorized products. Authorized Products Unauthorized Products Creditor Insurance Products Mortgage, Loan and Line of Credit Insurance Offers balance and payment protection for your customer s personal mortgage loan, or line of credit in case of: Loss of life, critical illness, disability and job loss. Credit Card Balance Protection Offers credit card balance protection in case of: Loss of life, critical illness, disability, job loss, hospitalization and terminal illness caregiving. Commercial Loan Insurance Plan (CLIP) Offers balance protection for commercial loan customers in case of: Loss of life, accidental dismemberment and specific loss. All other insurance products Travel Insurance Products BMO Travel Insurance (stand-alone travel coverage for BMO customers) Provides coverage for travelling BMO customers in case they encounter out-of-province/country emergency medical needs, trip cancellations, interruptions or flight delays and lost luggage. BMO MasterCard Travel Insurance (embedded in card and/or optional) Provides coverage for travelling BMO MasterCard customers in case they encounter emergency medical and dental needs, trip cancellations, interruptions or flight delays, lost luggage, collision damage for car rentals, common carrier accidental death and dismemberment, and roadside assistance. You can t sell unauthorized products. 4/16

Unauthorized products Be careful with unauthorized products. As a bank representative you can t do the following; Discuss and/or offer unauthorized insurance. (e.g., life insurance not tied to a mortgage, loan, or credit card) Refer a customer to a particular insurance agent, broker or insurance company, including BMO Life Assurance Doing so could have legal implications and expose BMO to fines and reputational risk. For more information refer to the Policies and Procedures website (Section 130-25). Guidelines for conversations How to answer questions for unauthorized products. A customer asks Do you sell insurance? What do you say? Response Feedback Yes we do. That s a good start but there s a better answer. Yes, we offer Creditor and Travel Insurance in the branch. Excellent! Good job! If the customer requests more information on an unauthorized insurance product (e.g. life insurance): If you would like more information, please use the contact information on this card. (Provide the customer with the BMO Insurance Contact Card.) We sell all kinds of insurance, mortgage, travel, life, etc." Prohibited! Sorry, government regulations only allow banks to sell Creditor and Travel insurance products. 5/16

A customer asks Where can I get information on life insurance? Can I buy it here? What do you say? Response Feedback No, we do not sell life insurance. That s a good start but there s a better answer. Sure, one of our advisors would be happy to help you. Thank you so much for asking. BMO Life Assurance offers life, accident and illness insurance products. Unfortunately we are not permitted to sell these products in the branch. Prohibited! Sorry, government regulations only allow banks to sell Creditor and Travel insurance products. Excellent! Good job! If the customer requests more information: If you would like more information, please use the contact information on this card. (Provide the customer with the BMO Insurance Contact Card) For more examples see the Unauthorized Insurance Conversation Guide. 6/16

CBA Code of Conduct Our customers deserve fair treatment. BMO follows the Canadian Banking Association s Code of Conduct for Authorized Insurance Activities. Doing this ensures that our customers have the right tools to make informed decisions. CBA 6 principles The CBA Code of Conduct has 6 principles. 1. Training ensures BMO employees are knowledgeable about insurance products. 2. Disclosure lists key pieces of information that you must tell a customer before selling an insurance product. 3. Promotion Practices looks at best practices for selling. 4. Privacy of Personal Information explains the proper handling of customer health information. 5. Continuity of Coverage examines how coverage is impacted when re-financing loans. 6. Complaint Procedures makes sure customers know how to file a complaint. 7/16

Training The key to building trust is knowledge. Our customers trust you to guide them in understanding our offerings so they can determine the solution that is right for them. The more you know about our products, the better you ll be at delivering a great customer experience. Build your BMO product knowledge. 1. Stay up-to-date on training and seek coaching opportunities. Available training includes onboarding modules, annual compliance training (ELCT), and a variety of My Learning courses. 2. Familiarize yourself with our Policy & Procedure site, and key documents like the Certificate of Insurance. 3. Ask questions when you have them. Consult the Creditor Insurance Support document for a list of key contacts. Contact Distribution Channel Operations (DCO) for: Policy and procedure clarification Product Questions Contact BMO Insurance Service Centre (BISC) for: General and application errors Claims status and escalations 8/16

Disclosure Treating customers fairly means keeping them informed. Put yourself in your customer s shoes what do you want to know before purchasing an insurance product? Disclosure speaks to highlighting information that matters most to customers in a straightforward manner. Timing and location Give the right info at the right time. You must make the customer aware of the disclosures specified in federal and provincial legislation, Canadian Bankers Association Code of Conduct, and industry guidelines before they consent to purchase. Disclosures are found on the insurance application form and in the Certificate of Insurance. For BMO Credit Card Balance Protection, disclosures are also included in the Your Guide to Selecting a BMO Credit Card brochure. Summary list You must tell your customers the following before they decide to buy insurance. This information can be found on the insurance application form, and in the Certificate of Insurance. 1. Optional Make sure your customer understands that buying insurance is optional. 2. Description Explain the product and its key benefits. 3. Start Date & End Date Tell them when the insurance coverage begins and when it ends. 4. Cancellation Customers can cancel their insurance at any time. Show them how to do so. 5. Refund Inform your customer they can cancel their insurance within 30 days from the start date and will be refunded any premiums paid. Note that BMO Travel Insurance refund policy is different. 6. Amount of Premium Explain the premium amount, how it s calculated, and how it will be paid. 7. Coverage Describe the certificate details and requirements for approval. All eligibility requirements must be stated at the time of application Health information may be used to evaluate the application. Inform the customer of any further steps they must take to complete the Insurer s requirements. Tell them the Insurer will let them know if their application is approved or declined. 8. Terms & Conditions Show them the time limits for making a claim and where the limits or exclusions of coverage are located. 9. Insurer Be sure to tell them who the insurer is and how to contact them. BMO is not the insurer. 9/16

Additional disclosures by province Some provinces have additional disclosures. You must inform the customer of the following in Alberta, Saskatchewan,,Manitoba and Quebec The bank receives compensation from the Insurer for offering this product. The Certificate of Insurance must be sent to the customer within 30 days if not provided at the time of application. Procedures and deadline for making a claim. If applicable mention: o The duration of the insurance is less than the term of the loan. o The amount insured is less than the customer s total debt. You must also inform the customer of the following in Quebec Provide the customer with a Distribution Guide for their review before they enroll in any creditor or travel insurance. Call Centre employees must tell customers they will receive one in the mail and explain where to find it online. Let them know that other insurance products offering similar coverage are available in the market. Ask them if they re already covered by such an insurance product. If they are unsure, encourage them to look into the matter. Tell them how long the insurer has to pay their claim, and explain that they can appeal if the claim is refused. Consult the Policy and Procedures for more information on additional disclosures. 10/16

Negative Option Billing Regulations Obtain Express Consent Disclosures are now complete. What comes next? Before going ahead with the purchase you must obtain the customer s express consent. This means confirming with the customer that they want the insurance before they sign the application. When they say Yes, have the customer sign the application immediately and provide them a copy. The disclosures and the effective dates of coverage can be found in the Certificate of Insurance, Coverage Summary and/or application form which must be provided to the customer within 30 days. 11/16

Promotion Practices Do the right thing Listen to your customer and offer the product appropriate for the needs expressed by the customer. Tied Selling Focus on building a trusting relationship. Do not participate in any coercive tied selling activities. Here s an example of tied selling. A mortgage specialist tells a customer that they qualify for a home mortgage. However, they are also told that the bank will approve the mortgage only if they take the bank s mortgage insurance. The customer wants the mortgage, but does not want the insurance. If a customer qualifies for a product, a banking representative is not allowed to unduly pressure them to buy another unwanted product or service as a condition of obtaining the product they want. Make sure the insurance coverage you are offering fits the needs expressed by your customer. And make sure your customer knows they have the right to decline insurance. Capturing health information If a customer is unsure about how to respond to health questions, you should tell them that they should respond Yes. The Insurer will contact them to clarify the question. Replying No in error on the application could result in the denial of their claim. 12/16

Privacy and Personal Information We value privacy. Customers may give us health related information as part of the insurance application process. Canadian privacy legislation sets out rules on how to protect their personal information. For Creditor Insurance products, the Insurer may require the customer to complete health questions. If so, these questions are part of the application process. It s important for you and your customers to understand that this information is collected exclusively for the Insurer, and cannot be used by the bank, its subsidiaries or affiliates to help assess loan applications or market other products. 13/16

Continuity of Coverage Now we will look at Continuity of Coverage and the implications when a customer refinances. Refinancing When a customer is interested in making a change or terminating their mortgage or loan with us, they may not realize the impact it may have on their existing insurance coverage. It is imperative that you explain to the customer the possible outcomes before they decide to make any changes. Terminating a mortgage or loan means reapplying for insurance coverage. The customer may no longer be eligible for their current coverage at the current price due to their age or health changes. Premiums may go up. Their insurance coverage may change. Be sure to highlight any differences. If there s been a change in health, customers may need to be medically underwritten. In this case, let the customer know their insurance application may be declined. It s not all doom and gloom. Your customer may qualify for Recognition of Prior Coverage (ROPC) which is available for some products. ROPC allows the customer to maintain the same amount of coverage they had on their original loan plan prior to re-applying. You ll need to explain how it works to your customer. Refer to Policy 130-2121. 14/16

Complaint Procedures Let s look at Complaint Procedures next. Sometimes a customer may be unhappy with their insurance experience. Use your judgement to identify if the customer s concern is an inquiry or a complaint. Try to assist the customer in order to determine who would be best suited to assist your customer. You may want to refer the issue to your manager if it remains unresolved. You must also inform your customer of BMO s complaint handling procedures by providing them with the We re here to help Resolving Customer Complaints brochure or direct them to the website for Resolving Complaint in the About BMO section. 15/16

Creditor and Travel Insurance Acknowledgement Form When you have finished reading this training summary, print this form and complete it. Return a signed copy to your manager and retain a copy for your records. I, (print name), affirm that I have reviewed this Creditor and Travel Insurance Summary, understand its contents and will act in accordance with the guidelines. I have been given opportunity to have any or all questions relating to Creditor and Travel Insurance addressed. (Signature of employee) (Date) 16/16