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Quebec brokerage association welcomes Bill 188 review process, calls for greater efficiency and fairness


September 30, 2015   by Canadian Underwriter


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Quebec’s brokerage association is welcoming the provincial finance ministry’s efforts to update financial legislation, but is calling for “greater efficiency and fairness in how the rules are applied.”

Regarding online insurance sales, the RCCAQ believes that the same legal requirements should apply to all parties, including price comparison website and those operated by insurance companies and certified brokers

The Regroupement des cabinets de courtage d’assurance du Québec (RCCAQ) recently submitted a French-language brief on the review process for Bill 188, which regulates the distribution of financial products and services, the brokerage association said in a statement on Wednesday.

Bill 188 was initially adopted in 2000 and technological advances and changes to insurance products over the past 15 years underscore the importance of this legislative review. RCCAQ chair Vincent Gaudreau said that “Quebec brokerage firms are calling for the implementation of an adequate regulatory framework, one that is both clear and consistent with a view to protecting the public, as well as more efficient for all insurance industry stakeholders.”

With regard to online insurance sales, the RCCAQ said that it is their view that the same legal requirements should apply to all parties, including price comparison websites and those operated by insurance companies and certified insurance brokers. “Standardizing these requirements would be fairer for all industry stakeholders,” the association said, adding that due to the complex nature of insurance products and the dramatic consequences often associated with insufficient coverage, it is essential that certified insurance representatives take part in online transactions.

The RCCAQ also maintains that insurance products should not be distributed without the participation of certified representatives. It adds that all distributors, in particular auto dealerships, should register as insurance brokerage firms, and employees tasked with selling insurance products should be registered as AMF (Autorité des marchés financiers)-certified representatives. The AMF is Quebec’s financial markets regulator.

“All persons distributing insurance products, regardless of their industry sector, should be subject to a single legislative framework,” Gaudreau argued in the statement. “That way, consumers will be protected uniformly, regardless of whom they do business with.”

Regarding the oversight process for certified representatives, the RCCAQ maintains that regulatory duplication for certified representatives should be eliminated. The association also “questions the wisdom of having the Chambre de l’assurance de dommages (CHAD) and the [AMF] both take part in the oversight process. Regulatory duplication places an undue burden on the oversight process and creates multiple points of confusion in the minds of consumers and industry representatives,” the brief said. RCCAQ proposes the merger of investigative and legal services currently provided by CHAD and AMF.

“As a result, the AMF’s status as the exclusive channel for complaints would be confirmed; it would also become the most effective organization for addressing breaches of professional ethics,” the statement said. “Due to the closeness of its membership ties, a sector-specific association (such as the RCCAQ) that has in-depth knowledge of industry training requirements would be in the best position to ensure that the necessary skills are maintained while assuming responsibility for its members’ professional development.”

The brief also address compensation for consumers affected by fraud, with the RCCAQ questioning the need to modify the current formula for compensating consumers affected by fraud. “Quebec’s financial services compensation fund is currently managed in the same way as other sector-specific funds designed to assist victims of fraud committed by certain designated professionals,” the statement said. “Since the overarching goal is to maintain consumers’ trust in the insurance industry, this goal will not be achieved if consumers are compensated for actions that certain professionals were not authorized to engage in the first place.”