The Canadian Life and Health Insurance Association (CLHIA) has conducted a review of how individual insurance is sold, and it is recommending that all provinces adopt the kind of regulations that are already in force in Quebec.

On Feb. 26, the CLHIA released a report on insurance distribution in Canada. The association reviewed sales practices across the country and makes a number of recommendations on how they might be improved to better serve consumers. One suggestion is that all insurance advisors should be required to conduct a needs analysis before selling a product.

The report notes that while most advisors do consider the needs of the customer and provide a copy of the information that has been gathered to the client, this process is only formalized into regulation in Quebec.

"It is our view that the Quebec approach should be adopted across the country. A needs analysis demonstrates that the advisor has an understanding of the customer's circumstances and needs before recommending a product to meet those needs," concludes the CLHIA. "The duty to conduct a needs analysis and keep documentation of it would rest with the advisor, and a copy would be provided to the customer. Audits of advisors, whether they be undertaken by the regulator, insurer or distribution firm, would include looking for evidence of the needs analysis."