Regulators publish core principles for insurance intermediaries

The Canadian Insurance Services Regulatory Organizations (CISRO) has published a set of core principles for insurance intermediaries to ensure the fair treatment of customers in both the life and health and property and casualty insurance sectors. 

The principles include the development of minimum national regulatory conduct standards that are common across Canada. At the same time, the principles acknowledge that every jurisdiction has its own regulatory approach for conducting business. Intermediaries should conduct their business, following the relevant principles that apply, while ensuring compliance with all applicable laws, regulations and codes within all jurisdictions where they carry on business.

A consistent approach to consumer protection 

"CISRO members are committed to supporting a consistent approach to consumer protection through the regulation of insurance intermediaries,” said Eric Jacob, Chair of CISRO. “The principles will be a resource for consumers to better understand the conduct they should expect from insurance professionals.” 

The principles are in addition to the Canadian Council of Insurance Regulators (CCIR) / CISRO Fair Treatment of Customers (FTC) Guidance. They also align with insurance core principles of the International Association of Insurance Supervisors. 

Broad definition of intermediary 

CISRO acknowledges that the definition of intermediary is given broad meaning, but that they include adjusters, agents, brokers and representatives, as well as business entities that distribute insurance products and services, including managing general agencies and third-party administrators. It also applies to all distribution methods, including over the internet. 

The principles note that intermediaries are expected to identify, disclose and manage any actual or potential conflict of interest that is associated with a transaction or recommendation. They are expected to avoid entering into or pursuing agreements if conflicts of interest cannot be managed, or if they interfere with the fair treatment of customers.