June 6, 2023 by David Gambrill
B.C.’s broker regulator, the Insurance Council of B.C., is now consulting on a proposed new restricted licensing framework to regulate the sale of incidental insurance, the council announced in late May.
The regulator’s initiative follows the province’s Bill 37, which in 2019 enabled a restricted licence regime that allows businesses to sell insurance products incidental to their ordinary business.
The council is currently meeting with P&C insurance industry stakeholders to determine performance requirements for selling incidental insurance products. A consultation paper published by the B.C. Finance Ministry in late 2022 suggests the “performance requirements” would include the following considerations:
“The council will…consult on and publish rules regarding but not necessarily limited to initial licensee qualifications, ongoing licence requirements, licensee conduct, fees, licence cancellation, and remuneration of licensees.”
The council said the B.C. Ministry of Finance is still considering the specific insurance products and services to be included in the restricted licensing regime. They will be confirmed when the province publishes the regulations for Bill 37.
Background: Canadian regulators examine sales of “incidental” insurance
In the government’s consultation paper, the B.C. government notes restricted licences for selling incidental insurance are already available in three other provinces — Alberta, Saskatchewan, and Manitoba. Like B.C., New Brunswick is also in the midst of developing a restricted licence regime.
The other provinces’ regimes offer restricted licence to sell the following types of insurance: cargo, travel, credit protection, funeral, Guaranteed Asset Protection (GAP), rented vehicles, portable electronics, and equipment warranty.
Basically, a licence to sell incidental insurance goes to a business, which allows its agents and representatives to sell insurance related to the main products the company sells.
The consultation document lists many businesses in other provinces that are eligible to receive a restricted insurance licence. It further states: “consistency between provinces may be beneficial and [the province] is considering allowing similar businesses to obtain restricted insurance agent licences in B.C.”
The “similar” businesses listed in the B.C. Finance Ministry’s consultation document include:
The consultation document says B.C.’s provincial government “is willing to differ from the approach taken in other provinces,” and would consider restricted licences to be offered to the following kinds of businesses as well:
Feature image courtesy of iStock.com/skynesher