Quebec brokers say proposed regulation to ensure transparent disclosure of billing for fees is redundant

The Regroupment des cabinets de courtage d’assurance du Québec (RCCAQ), a Quebec insurance broker association, says an amendment to regulations recently proposed by the province’s insurance regulator will simply duplicate existing standards governing transparent disclosure of billing for fees.
The Autorité des marchés financiers (AMF) is proposing to amend Section 8 of the regulations under the Act respecting the distribution of financial products and services. The proposed changes are to ensure transparency of the insurance brokers’ disclosure of fees for service.
The AMF proposes to change Section 8.2 to read as follows: “A representative in damage insurance must, in a document accompanying the policy, inform the client from whom he requires compensation, of the nature and scope of his mandate and the estimated time required to complete it. This document must be dated and signed by the representative in damage insurance.”
The amendment to Section 8.3 further spells out the contents of the proposed signed agreement between the broker and his or her client.
“The RCCAQ’s understanding of the changes being pursued by the regulator stems in part from a desire to ensure transparency in dealings with consumers, which is a legitimate goal,” the Quebec broker association says. “However, the RCCAQ takes the position that in the damage insurance field, the proposed change is inappropriate, inapplicable and counterproductive.”
The RCCAQ pointed out to the AMF that various standards already govern the disclosure of billing for fees.
“These include the Act respecting the distribution of financial products and services (section 17), the Code of ethics for insurance representatives, AMF Regulation 3 and AMF Regulation 9,” the RCCAQ says in a posting on its Web site outlining its position to the AMF. “As a result, the adoption of the proposed amendments would mean that as far as billing for fees is concerned, the practice would be governed by five different standards.
“To avoid duplication and red tape and to prevent confusion among consumers, the RCCAQ recommends that section 8.2 proposed by the AMF not apply to damage insurance brokers charging fees on behalf of a firm and for its benefit.”