Consumers Association to file complaint against insurance industry

The Consumers’ Association of Canada says it will be filing an official complaint with the Federal Competition Bureau, alleging anti-competitive and anti-consumer activities by the insurance industry in Canada.
“This industry continues to portray conflicts of interest, secret commissions, and steering of customers as being good for consumers,” Bruce Cran, the president of the Consumers’ Association of Canada, says in a press release. “These activities are not in the interest of consumers and as a result we have decided to launch a complaint with the Competition Bureau, asking that they initiate a formal investigation of industry practises.”
Mr. Chan says his association will also be asking the Bureau to “crack open the misleading use of the term ‘independent broker.'” He says it is clear that some brokers are not independent, yet they are representing themselves this way to consumers.
“When an insurance company owns or has a financial relationship in brokerage offices who represent themselves as being independent, and the broker only sells policies from that one insurer, this is misleading,” Mr. Cran says. “We have watched in amazement that a major segment of the financial industry in Canada has yet to agree on a simple code of practise that would require them to put the interests of consumers ahead of sales commissions and
corporate profits.
“The role of the Competition Act is to oversee actions that harm consumer interests and we are asking that the Bureau now investigate the insurance industry and its practises.”
Mr. Cran says his association is finalizing its evidence package for the Bureau and will be submitting the entire complaint sometime between Oct. 7 and Oct. 14.
Earlier this year, the Insurance Brokers Association of Ontario (IBAO), the Toronto Insurance Conference and the self-regulatory body for Ontario insurers the Registered Insurance Brokers of Ontario (RIBO) developed and implemented the Insurer’s Consumer Code of Conduct and Responsibility, as well as the Ontario Broker Disclosure Protocol.
The code and the protocol require brokers to disclose potential conflicts of interest to clients and to put the interests of clients ahead of remuneration considerations. Both IBAO and RIBO say the disclosure protocol in Ontario is working well and there is no need for further regulation.