Banks banned from promoting unauthorized insurance on Web sites
Canada’s new regulations prohibiting banks from promoting unauthorized insurance products and services on their Web sites are now official.
The regulations came into force with very few amendments to the pre-published draft of regulations posted for public comment on Feb. 12, 2011.
The only changes were to clarify that the new regulations apply to the banks’ “business in Canada.” Also, the ban on Web site insurance promotion does not apply if the banks are promoting insurers that deal “only” in authorized types of insurance (as defined by statute).
Under the section ‘Web Promotion,’ the regulations state:
“[A] bank shall not, on a bank Web page, provide access to a Web page – directly or through another Web page -through which there is a promotion of a) an insurance company, agent or broker that does not deal only in authorized types of insurance; or b) an insurance policy of an insurance company, agent or broker, or a service in respect of a policy, that is not of only an authorized type of insurance.”
Proposed changes to Nova Scotia auto insurance could increase premium by $6 to $7.50 per driver
A proposal to increase Nova Scotia’s standard accident benefits package up to the higher limits contained in a Section 48 endorsement would result in an average premium increase of between $6 and $7.50 per driver.
The Nova Scotia Utility and Review Board made the estimate in response to specific questions posed by the province’s finance minister. The minister asked the board to calculate the costs of various proposals to raise the limits, as outlined in the CFN Consultants (Atlantic) Inc.’s Final Report Addressing: The Nova Scotia Automobile Insurance Review.
OSFI advises against early adoption of some IFRS amendments
Canada’s financial solvency regulator has advised against early adoption of some new or amended International Financial Reporting Standards (IFRS) issued in May and June 2011, including the IFRS 13 Fair Value Measurement.
The Office of the Superintendent of Financial Institutions (OSFI) sent a letter to all federally regulated financial companies dated Oct. 31, 2011. The letter itemizes eight financial standards and says federally regulated entities (FREs) “should not early adopt the new or amended IFRSs outlined in this letter.”
The standards listed in the letter are:
•Consolidation and related standards; • IFRS 10 Consolidated Financial Statements; • IFRS 11 Joint Arrangements; • IFRS 12 Disclosure of Interests in Other Entities; • IAS 27 Separate Financial Statements; • IAS 28 Investments in Associates and Joint Ventures; • IFRS 13 Fair Value Measurement; • Amendment to IAS 19 Employee Benefits; and • Amendment to IAS 1 Presentation of Items of Other Comprehensive Income.
Instead, OSFI says, “FREs should adhere to the mandatory effective dates as stated in each of the respective IFRSs.”
IBC holds up its voluntary code on credit scoring as the basis for potential regulatory framework
Insurance Bureau of Canada (IBC) is holding up its voluntary Code of Conduct for Insurers’ Use of Credit Information as the basis for a possible regulatory framework on credit scoring. Such a framework would be an alternative to banning the use of credit scoring outright.
IBC made the suggestion in a submission responding to an issues paper issued by the Canadian Council of Insurance Regulators (CCIR) in June 2011. The CCIR’s paper calls for industry and consumer feedback on seven potential risks to consumers related to insurers’ use of credit scoring.
In its submission, IBC says its voluntary code of conduct addresses each of the seven potential risks to consumers of credit scoring outlined in the CCIR issues paper. It also notes companies representing 85% of the personal lines market share of IBC and Canadian Association of Direct Response Insurers (CADRI) members have made a formal commitment to adhere to the code.
Canada amends privacy act to allow insurers to share information related to potential insurance fraud
Intended to help insurers suppress fraud, Bill C-29 amends Canada’s Personal Information Protection and Electronic Documents Act (PIPEDA) to allow disclosure of personal information without a person’s consent under certain circumstances.
PIPEDA generally prohibits companies from releasing a person’s private information without his or her consent.
Clauses 6 to 8 of the proposed bill, which has passed first reading in the House of Commons, outline a number of exceptions to consent requirements.
One new exception is if the personal information is contained in a witness statement and is needed to assess, process or settle an insurance claim.
A second new exception would allow insurers to exchange a person’s personal information with other companies or government bodies “when an organization has reasonable grounds to believe that a contravention of the laws of Canada, a province or a foreign country is being, has been, or is about to be committed.”
Insurers underestimate the risk of cloudbursts: Swiss Re
Insurers underestimating the risk of cloudbursts, particularly in urban areas, are putting themselves at risk, Swiss Re cautioned in a release.
A cloudburst is a sudden, very heavy rainfall.
In a posting on its Web site, The ripples of heavy cloudbursts, Swiss Re notes that Hull, United Kingdom endured rainfall levels of between 100 mm to 135 mm over a three-day period in June 2007. Istanbul saw levels of up to 130 mm in a two-day period in September 2009, and in July 2011, a heavy cloudburst dumped about 160 mm over Copenhagen in less than 24 hours.
The Hull flooding resulted in $270 million in insured losses. Istanbul losses were $430 million and Copenhagen could cost more than $800 million.
“Cities are especially vulnerable to heavy cloudbursts,” the Swiss Re post says. “One factor is high concentration of buildings and other assets. Average claim size for residential structures is typically low, but substantial for commercial and industrial businesses.”