Companies have policies in place for dealings with agents, adjusters: Alberta survey

A vast majority of Alberta’s insurers have policies in place to make sure they comply with laws governing their business with authorized insurance agents and insurance adjusters, a risk-based market conduct survey released by the Government of Alberta has found.
The survey also found a large majority of the province’s insurance companies have established screening procedures for agents and intermediaries, as well as protocols to avoid compensation payments to unauthorized insurance agents.
The Government of Alberta sent its first Risk Based Market Conduct Survey to all insurance companies licensed in Alberta and received 215 responses.
The survey’s findings indicate that 45% of insurance companies use independent agents or brokers for their method of distribution, 24% use restricted or captive company insurance agents and 15% use outsourced call centres.
“The survey results indicate that 93% of insurance companies who responded have policies and procedures in place to ensure they only do business with an insurance agent who holds a valid certificate of authority,” the survey found. “Seven per cent of insurance companies that responded indicat[ed] they do not have policies and procedures.”
The survey found that 55% of the respondent insurance companies had policies and procedures in place to ensure they only do business with insurance adjusters who hold valid certificates of authority. Eleven per cent of companies did not have such policies and procedures in place, and 34% of respondents said the situation did not apply to them because they were life insurers that did not use insurance adjusters.
The survey showed 77% of insurance companies had established and used screening procedures to determine the suitability of an individual to represent the company as an agent. Eighty-five per cent of insurance companies had policies in place to ensure they paid compensation only to authorized insurance agents.