The Canadian Council of Insurance Regulators (CCIR) has published its fifth Annual Statement on Market Conduct (ASMC). In it, the council notes that the independent distribution channels in both the life and health (L&H) and property and casualty (P&C) sectors have grown continuously over the three previous reporting periods.

They say the ASMC was introduced by the CCIR in 2017 to collect information from insurers across Canada related to their governance, practices, policies and treatment of customers. “By using a single window approach, insurers are able to report once annually through a unified process that serves all 13 participating regulators,” the CCIR states in an announcement about the annual report’s release.

Consistent and comparable data 

In addition to reducing regulatory burden, they say the effort also provides regulators with consistent and comparable data. The ASMC filing is mandatory. “Insurers are expected to consider their own results against those of their industry, particularly as it relates to FTC (fair treatment of customer) outcomes,” it states.

The report itself highlights any data point fluctuations of note which occur from year to year. “In particular, the findings provide insight on how insurers are integrating FTC into their operations which is an area that directly impacts consumer experiences in claims, sales and service,” they write.

In 2024, independent distribution contracts increased in both sectors: L&H contracts rose by 38,424 to a total of 481,052, while P&C distribution contracts rose by 31,448 to a total of 55,888.

In the L&H sector, they note that the volume of complaints related to business done through independent distribution channels has increased every year since 2022 – an increase noted alongside a proportional decrease in the number of complaints related to direct or exclusive channels.

Independent channel 

They report that 45 per cent of all L&H complaints were related to the independent channel in 2022, rising to 54 per cent in 2023 before jumping to 61 per cent in 2024. “This increase is taken almost directly from the direct channel which made up 47 per cent of complaints in 2022, down to 39 per cent in 2023 and finally 32 per cent in 2024,” they write. The total number of L&H complaints filed in 2024 overall decreased 19.6 per cent to 5,885.

“There is a notable difference in the proportion of reviews/audits done with a focus on FTC between the independent and direct/exclusive channels. CCIR continues to remind insurers of the importance of conducting assessments of business practices across all methods of distribution used,” they write. “Reliance on independent channels may create challenges for insurers in directly overseeing sales practices, making robust audit and review processes critical to ensure FTC compliance.” 

In P&C, applications declined by insurers have been steadily rising in all classes, a trend they say goes back to 2021.

Claims rejection ratio 

While the claims rejection ratio in both sectors remained stable, they say the average days to final payment also rose notably, increasing 20 days in the L&H accident and sickness (A&S) sector, 36 days in the P&C property sector and 27 days in the P&C A&S sector. The average time until final payment decreased 91 days for group A&S clients.

They add that P&C administration-related complaints increased by 195 per cent, year-over-year, making this the second most prevalent cause for complaint behind claims and settlement. In P&C the total number of complaints filed in 2024 rose 38 per cent to 8,537. Of these, 8,087 were personal policy complaints while 440 were related to commercial business. 

The report, intended for all stakeholders, provides background on how insurance is regulated in Canada, looks at customer satisfaction survey data, policy data, cancellations and non-renewals, internet sales, incentives (in some detail) and claims.

In 2024, 65 L&H insurers were required to file the ASMC, 54 of which were actively writing new business. In P&C, 213 insurers were required to file. Of these, 148 were actively writing new personal lines business.