Canadian Underwriter

Quebec brokers concerned about regulatory ‘vacuum’ on web sales

January 23, 2018   by Greg Meckbach

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Quebec brokers are pushing for a prohibition on buying property and casualty insurance over the Internet without some involvement from a broker or agent.

Under the province’s proposed Bill 141, the Act respecting the distribution of financial products and services would be changed to allow companies “to offer financial products and services by technological means,” the provinces states in an explanatory note on Bill 141.

Selling P&C insurance products online “without any involvement of a certified representative whatsoever will be authorized by Bill 141,” Patrice Pouliot, chairman-elect of the province’s brokers’ association, told Canadian Underwriter Monday.

“They leave it to the AMF (L’Autorité des marchés financiers)” to write regulations on Internet insurance sales on the part of carriers, brokers and agents, Pouliot added, noting that the province does not currently regulate insurance sales over the Internet. “It’s is kind of a vacuum.”

Regroupement des cabinets de courtage d’assurance du Québec (RCCAQ), the provincial broker association, lobbied for clarity about online sales during recent hearings on Bill 141. The hearings were held before the National Assembly Committee on Public Finance and wound up on Jan. 18.

If passed into law, Bill 141 would eliminate Chambre de l’assurance de dommages (ChAD), a provincial broker regulator with authority analogous to that of Registered Insurance Brokers of Ontario. Brokers would be overseen by the AMF, which unlike the ChAD, is not a professional self-regulatory body.

Regarding the online sale of insurance, Pouliot said the province’s brokers are concerned that some customers may not understand exactly what insurance companies mean in their wording on application forms, and the broker can help consumers understand those wordings in everyday language. Brokers are also concerned that consumers may have coverage gaps that they do not discover until they have a claim, at which point it is too late to buy adequate coverage.

When a consumer fills out an online application for P&C insurance, this, in RCCAQ’s view, “should be verified by a certified representative” and there should also be “an exchange of information between the client and the insurance broker” or agent, so that the customer is buying a product that fits the needs of the customer.

While consumers may want to buy insurance online in the same manner that they buy music, the consequences of buying inadequate insurance is “not the same as if you don’t like the song that you bought for 99 cents,” Pouliot noted.

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2 Comments » for Quebec brokers concerned about regulatory ‘vacuum’ on web sales
  1. Scott Meadwell says:

    I couldn’t agree more. A change in delivery should never equate to a removal of the need for professional advice. There are many aspects of insurance that vary wildly between insurers. Those differences are hard to detect and it takes a knowledgeable professional to help assess your needs and matching those needs to the offerings in the market. That is on the sales side but lets not forget the claims side. Often these online players are striving to streamline their services at low cost. Does that make you think that they will then turn around and pay top dollar for experienced claims adjusters? I don’t think so. Often the only buffer between the inexperienced adjuster or the adjuster who is just plain wrong, and the client’s denial letter is the broker.
    We mustn’t confuse the importance of regulating continuing support for the professionalism of our industry just because we have a new means of seeking insurance.

  2. Mica Cooper says:

    Lets label this bill: Quebec Brokers Pro Luddite

    Online is already “normal”, accepted, and legal. We see it with Travel insurance for flights, luggage, etc as well as products.

    This is really about protectionism, and protecting your sales channel because you lack the ability to compete, innovate, and MOST of all, provide value for your customers. Brokers that do these things have no issue with online sales and are themselves adopting this sales channel, because it is “Customer Centric”.

    See Luddite – a person opposed to increased industrialization or new technology.

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