Brokers should heed FSCO reminder: RIBO

Ontario’s broker regulator has issued a bulletin to the province’s brokers, saying that although the rules prohibiting credit scoring for the purpose of underwriting insurance are primarily aimed at insurance companies, the issue nevertheless affects the day-to-day business activities of brokers.
The Registered Insurance Brokers of Ontario (RIBO) addressed the credit-scoring issue in a bulletin that follows closely on the heels of a Financial Services Commission of Ontario (FSCO) bulletin on the same issue.
FSCO recently reminded the province’s insurance companies that credit scoring is not allowed for the purpose of automobile insurance quoting and underwriting practices.
RIBO noted that the collection of a client’s credit information is covered by RIBO’s rules governing the province’s brokers.
Information acquired over the course of a professional relationship concerning the business and affairs of a client must be kept in strict confidence by brokers, according to section 14.5 of the RIBO Code of Conduct.
Section 14.5 also notes that, “the member shall not divulge any such information unless authorized by the client to do so, required by law to do so or required to do so in conducting negotiations with underwriters or insurers on behalf of the client.”
Canadian privacy legislation establishes a framework for the collection, use and sharing of personal information, RIBO cautions.
“By way of example, an individual must receive clear and meaningful disclosure of the purpose for which the information is being collected, with whom it will be shared and how long it may be required,” the member notice reads. “Further, the individual must give their consent to the collection, use and sharing of that information in accordance with that disclosure. Given the sensitive nature of credit information, the individual’s express consent must be obtained.”
RIBO further notes that it has advised FSCO it will monitor this issue and report allegations, if any, of actions that do not conform with the principles set out in the bulletin.
Any broker with concerns regarding such activity is encouraged to contact RIBO.