October 19, 2006 by Canadian Underwriter
Insurance brokerages controlled by “financial institutions” such as insurance companies, credit unions, trust companies or banks have now been excluded from voting membership in the Insurance Brokers Association of Ontario (IBAO), according to a bylaw the association passed at its annual general meeting in Niagara Falls.
The bylaw amendment defines “control” by a financial institution as a situation in which “the shares of a voting corporation carrying more than 50% of the votes for the election of directors of the corporation are held, other than by way of security only, by or for the benefit of a financial institution.”
According to the bylaw amendments, financial institutions include:
Trust and loan companies
Co-operative credit associations
Any trust, loan or insurance companies created through government legislation
Any co-operative credit society incorporated or regulated by government
A caisse populaire
One unique feature of the IBAO bylaw change is that its definition of a controlling financial institution includes “insurance companies” as a category for voting membership exclusion.
If a brokerage is controlled by any of the financial institutions listed above, it may qualify for non-voting membership in the IBAO through what is called an “Affinity membership.”
IBAO chief operating officer Randy Carroll said a total of 12 Ontario brokerages would fall under the above classifications for being controlled by a financial institution. He added that not all of these 12 brokerages are now members of the IBAO.