January 1, 1999 by Sean van Zyl, Editor
The last six years have seen dramatic change in the structure and method of business of the property and casualty insurance industry. These “winds of change” sweeping through the industry are primarily a result of the unprecedented consolidation activity and the ever increasing level of competition, notes Richard Gardner, the outgoing president of the Registered Insurance Brokers of Ontario (RIBO) at the regulatory body’s recently held annual general meeting.
As a member of the RIBO board of directors for the past six years, Gardner observes, “I have watched as our industry, like so many others, witnesses unprecedented consolidation and increased competition. RIBO recognizes that change is inevitable and traditional business practices are a way of the past.”
Gardner’s comments refer not only to the broad changes occurring mainly at the distribution point of the p&c business, but of the future role of industry bodies and associations in the evolving Canadian financial services sector. Specifically, the mandate of RIBO as a self-regulatory body of Ontario’s brokers could be significantly impacted by the Ontario government’s new Financial Services Commission of Ontario (FSCO) plan for regulating the distribution of financial service products in the province.
Furthermore, insurance regulators across the country have expressed keen interest in developments of FSCO’s review plan as a possible blueprint for a standardized regulatory environment. FSCO’s prime focus is increased consumer protection while at the same time opening up competition in the selling of financial service products across the various sectors. RIBO’s future role as a regulator of insurance brokers hinges on the final decisions taken by the Ontario government, conclusion of which is expected in the spring.
As such, Gardner says, “as an industry we have proven that self-regulation is both effective and beneficial from a brokerage and consumer standpoint. We must now revisit why it has been effective and beneficial and look for ways to improve our performance.”
During the past year of discussions between industry bodies and the Ontario government concerning FSCO’s future legislative framework, RIBO has been an extremely active participant in the process, notes Gardner. In that light, and through the ongoing talks, RIBO has to apply caution not to make decisions that could unduly restrict the ability of brokers to compete or reduce in any way the protection currently afforded to the public, he states. “In keeping with our mandate, RIBO must enhance the professionalism of insurance brokers in Ontario while at the same time making sure that the public is more than adequately protected.”
In so doing, RIBO is pushing ahead with new communication initiatives and the evaluation of education programs. “We continue to see an increase in the number of courses offered across the province and the number of providers who have interesting courses,” Gardner comments. He also called on brokers to keep RIBO informed of whether the education programs evaluated by RIBO meet their expectations, “this way, RIBO will be able to monitor the caliber of courses made available”.
Lorie Guthrie Phair, the newly elected president of RIBO, says the prime objective in coming months will be to ensure the independent broker message is heard and taken into account in FSCO’s review process.
She notes that the consultation period allowed for industry comment concerning the FSCO discussion paper recently concluded. However, through this process RIBO was able to press home several key broker standpoint issues to the new regulator, says Guthrie Phair. “The government has listened to what we had to say and I believe we will see a positive reaction.”
Although some of RIBO’s past responsibilities may change under the proposed regulatory framework, the organization will remain intact, she predicts. “I see RIBO continuing on as a strong example of self-regulation.” In particular, she notes, RIBO has created an environment where brokers are willing to communicate freely their views and concerns. “We have opened up a channel for brokers to gain information without feeling like they are dealing with a police-style watchdog,” Guthrie Phair says.