Filing Bankruptcy or Consumer Proposal as an Insurance Broker in Ontario
Can an Insurance Broker in Ontario Go Bankrupt or Make a Consumer Proposal?
In a situation where you are brokering insolvency insurance in the province of Ontario, there is some good news in terms of bankruptcy and consumer proposals.
Generally speaking, filing for these financial statuses will not preclude you from practicing nor will it damage your registration status with the registration board (Registered Insurance Brokers of Ontario).
When Filing Insolvency
In the event that a licensed insurance broker decides to file either a consumer proposal or for bankruptcy, they must inform RIBO (the insurance board) of the filing as soon as possible.
In informing them, you must supply some essential information such as:
- Dated and signed document relaying the exact causes for your filing;
- Assignment of Bankruptcy: Form 69.
Once your bankruptcy comes to a close, you must also provide a discharge order to RIBO as soon as possible.
There is a committee dedicated to reviewing your information, namely the Qualification and Registration Committee.
It is up to those professionals to determine whether your license will be affected by the bankruptcy.
Bear in mind that if you apply for an unrestricted registration or are promoted to the top broker at a firm, the bankruptcy will also be placed under consideration.
Issues With Self-Employment
In the event that you are working as a stand-alone insurance broker and earn residual income or commission, it may be seen as an asset in terms of bankruptcy filing.
In this case, they may be considered in calculating your surplus income.
Because of this, many brokers opt for consumer proposals in lieu of a bankruptcy filing.
To learn more about how RIBO will view your bankruptcy or consumer proposal, reach out to them directly.
Speak with a Licensed Insolvency Trustee to discuss how a consumer proposal may help you get back on track.