B.C. to Review Financial Services Legislation

By Andrew Rickard | June 12 2015 01:02PM

British Columbia has announced plans to review its financial services legislation. Insurance licensing exemptions for banks and car dealers, the structure of the BC Insurance Council, and rebating are just some of the issues that are being considered.

Michael de JongOn June 2, BC Minister of Finance Michael de Jong announced plans to conduct a review of the province's Financial Institutions Act and Credit Union Incorporation Act. The initial public consultation paper tackles a number of issues that could affect life insurance advisors.

In British Columbia, travel agents are able to sell travel insurance if they have met certain education requirements. The government points out that in Alberta, Saskatchewan and Manitoba, car dealers and financial institutions are also able to obtain a restricted licence which allows them to sell insurance where it is sold incidentally to their ordinary business. “Should the restricted insurance agent model used by some other provinces, and applicable to travel agencies in BC, be looked at with respect to the sale of other types of incidental insurance such as credit insurance and/or product and vehicle warranties?” asks the paper. “If so, which types?”

The consultation paper also raises questions about the provincial Insurance Council, which has the power to conduct investigations and to discipline licensees when warranted. One question is whether some or all members of the Council should be elected. Another question asks if the Council has the right regulatory tools and structure for its role. "Are any improvements needed to enhance coordination between the supervisory and intermediary regulatory authorities?" reads the document. "Is the current oversight framework, including appeals to the Financial Services Tribunal, effective?”

Another issue that the paper considers is the practice of rebating. At the moment, B.C. legislation allows rebating up to a prescribed maximum of 25% of the annual premium. "Is the threshold of 25% of the premium appropriate? Would a different level be more appropriate, and if so, what level?" asks the paper. "Are the current disclosure rules on referral payments adequate to protect consumers? Should agents also be required to disclose the amount of any referral payment?"

The government is seeking comments from both industry stakeholders and members of the public, with a submission deadline of Sept. 15, 2015. The consultation paper can be downloaded from the BC Ministry of Finance web site.