Canadian property and casualty insurance brokers are making a pitch to the Canadian Council of Insurance Regulators (CCIR) to ensure intermediaries play an important role in the online purchase of insurance.
At a minimum, brokers are calling on the CCIR to require that an insurance intermediary be accessible to consumers at all times during the online process for purchasing insurance. Some broker associations go further, suggesting that consultation with a broker be a required as part of the online insurance sale transaction.
Brokers are participating in a public consultation conducted by the CCIR, which presented three options in its January 2012 issues paper on the regulation of online insurance purchases. The range of options turns on whether of not an intermediary’s role should be a regulatory requirement in the purchase of insurance online.
The CCIR’s first option is to have a company’s online information play the role of providing advice to the consumer. The second would require that consumers have access to an intermediary such as a broker at all times during the online purchase, while the third is to require that online transactions include consultation with an intermediary.
The council posted industry stakeholder input on its website on June 14. No decision has been made.
At a minimum, broker associations note, consumers should have access to professional advice from a licensed insurance broker at all times during an insurance purchase online. This notion is endorsed by all insurance broker submissions, including that of the Insurance Brokers Association of B.C. (IBABC).
“Consumers should have access to additional information/advice from a licensed intermediary by means of an opt-out function, whereby they can contact an intermediary or salesperson by phone or email,” the IBABC submission reads.
Online conversations about insurance should adhere to the same principles as face-to-face discussions, IBABC’s the submission continues, including that “the customer has access to a knowledgeable, unbiased intermediary who carries E&O insurance.”
It is one thing to require access to a broker at all times, but some broker associations would prefer to ensure an intermediary be consulted before the online transaction is completed.
The Insurance Brokers Association of Canada (IBAC), for example, notes in its submission that the Internet is not a new insurance distribution channel in and of itself, but rather a new form of communication. In terms of insurance sales, the same rules that apply in the non-virtual world should apply to the virtual world.
Discussing consumer protection, IBAC’s submission states: “We have long advocated the following consumer protection pillar, and this indeed is the current best practice adopted by our members, that no coverage binding or amendment can be effected via an insurer site or other electronic tool without a licensed insurance professional’s direct personal involvement. We believe this principle is crucial and hope the CCIR will keep this in mind when adopting principles/recommendations for their members.”