Canada’s insurance industry broadly supporting principles around managing conflicts: CCIR

Canada’s insurance industry is broadly supporting three principles for managing conflicts of interest proposed by the country’s insurance market conduct regulator in 2006, a survey has found.
These principles include ensuring:
•    the priority of a client’s interest;
•    disclosure of conflicts or potential conflicts of interest; and
•    product suitability.
The principles were designed to promote consumer confidence in the industry following a U.S. regulatory investigation into insurance bid-rigging in New York in 2004.
The Canadian Council of Insurance Regulators (CCIR) in 2006 called on Canadian insurers and brokers to demonstrate in their policies and their governance practices that they were adhering to the three principles outlined above.
In its final report on the adoption of the principles, released in December 2008, the CCIR survey of property and casualty and life insurers and intermediaries across Canada found that 85% of intermediaries answered “Always or most of the times” when asked if they had implemented activities and practices that supported the principles at the point of sale. 
But there is still work to do, the CCIR noted. Among other things, it recommends that:
•    “Associations and insurance companies should increase their efforts to support intermediaries to improve the quality of their disclosure to consumers.”
•    “Where companies have policies, procedures or practices that might result in conflicts of interest, they should be disclosed by the company, not only at the point of sale.”
•    “Efforts should be made to ensure that all companies have a system of corporate governance for management of conflicts of interest.”
•    “Complaints resolution processes should be prominently displayed on all companies’ Web sites to facilitate intermediaries providing this information to clients.”