What’s New: In Brief (November 12, 2007)

Spot checks by the Registered Insurance Brokers Association (RIBO) regarding the degree to which Ontario brokers are in compliance with insurance regulators new marketplace principles have resulted in a Good Housekeeping seal of approval.
The Canadian Council of Insurance Regulators (CCIR) and the Canadian Council of Insurance Services Regulatory Organizations (CISRO) developed three new marketplace conduct principles published in Spring 2006.
In the wake of debate in 2005-06 surrounding contingent commissions in the United States, Canadian insurance regulators called on the nations brokers to adhere to three general principles. They include:
Priority of clients interest
Disclosure of conflicts of Interest or potential conflicts of interest, and
Product suitability
Thus far, all indicators are that brokers are applying these principles in their day-to-day operations, Bonnie Warder, RIBOs president, announced in a speech presented at the regulators 2007 annual general meeting.

Willis Group Holdings, a global insurance broker, has released an alert from its financial institutions (FI) practice that outlines some possible long-term effects of the meltdown in the U.S. sub-prime mortgage marketplace.
The alert says D&O insurers and errors and omissions insurers in the United States have already seen a number of claims arising from the sub-prime issue, although it has been estimated that this is just the tip of a huge iceberg.
According to the alert, a worst-case loss scenario for directors and officers (D&O) insurers could be in the realm of US$3 billion.
The alert goes on to provide background on the situation, an explanation of what went wrong, an examination of the impact on other outside industries and a review on how the U.S. insurance marketplace has reacted.