FSCO to review industry’s adoption of CCIR principles

The Financial Services Commission of Ontario (FSCO) has served notice of its intention in 2007 to “review the use” by insurers, agents and brokers of CCIR [Canadian Council of Insurance Regulators] principles related to the disclosure of potential conflicts of interest.
“To ensure consumers are protected, conflicts of interest between insurers and agents must be managed effectively,” FSCO’s superintendent of financial services Bob Christie wrote in a letter recently posted on FSCO’s Web site.
“Regulators, working with the industry, have agreed on three principles as best practices in managing actual or potential conflicts of interest.
“The principles promote consumer confidence in the insurance industry by outlining best practices for managing these situations when they arise.
“We hope you will put them to good use.”
Arising from various regulatory actions in the United States concerning broker commissions, CCIR began to review industry practices in Canada with respect to contingent profits or commissions.
As a result of its review, CCIR adopted three principles with the intent to promote broker disclosure of potential conflicts of interest. Those principles are:
Client’s interests come first: Agents must put the interests of policyholders and purchasers ahead of their own;
Make clear any conflicts or potential conflicts of interest: Consumers must receive disclosure of any actual or potential conflict of interest that is associated with a transaction or recommendation; and
Ensure products are the right fit: Products recommended must meet the needs of the consumer.