CCIR posts issues paper about online insurance sales

The Canadian Council of Insurance Regulators (CCIR) has circulated an issues paper that discusses issues raised by insurance sales on the Internet.
In particular, the paper identifies the absence of a regulatory framework specific to the distribution of online financial or insurance products. In addition, it lists seven desired consumer protection goals related to the online sale of insurance.
The paper does not address the role of social media in the online distribution of insurance, although stakeholders are invited to comment on this.
The deadline to submit comments to the CCIR about the issues paper is Apr. 27.
The first part of the paper is dedicated to regulatory issues, including the inability in Canada to terminate an insurance contract electronically.
“While there is legislation in all Canadian jurisdictions governing electronic commerce in Canada, none applies specifically to financial products, unlike the European Union and the United Kingdom where there are regulations designed specifically for the distance marketing of financial services and general insurance, respectively,” the paper says. “As well, much of the insurance legislation currently in place in Canada was developed long before electronic transactions were contemplated and specify that certain transactions must be performed by mail, such as termination of a policy.
“Both of these circumstances have been cited by some industry participants as factors in inhibiting the growth of electronic commerce for insurance products.”
The paper goes on to list seven consumer protection goals to be addressed by any future approach to the online distribution of insurance.
They are: 1) consumers should have access to additional information or advice from an intermediary; 2) consumers should know they are dealing with a licensed intermediary; 3) consumers should have and understand necessary information about the products; 4) consumers should be able to review the accuracy of the information they provide; 5) consumers should be aware of the terms and conditions; 6) consumers should be able to rely on the transactions; and 7) consumers’ personal information should be secure.
The full issues paper can be found at:
http://www.ccir-ccrra.org/en/init/Elec_Commerce/ECC%20issues%20paper%20EN.pdf