The Canadian Association of Direct Relationship Insurers (CADRI) is warning that a proposal to create a new licensing regime for agencies and firms in Manitoba, as it is written today, could inadvertently and adversely affect direct relationship insurers with captive agencies.
“We suspect that the council (Insurance Council of Manitoba) may have overlooked the exclusive agency configuration and is aiming the rule at independent retail brokerages which sell multiple insurers’ products,” they write in the association’s submission to the council. “We urge the council to reconsider this obligation as it pertains to agencies that sell only insurance from an affiliated insurance company.”
Under the proposed new licensing regime, the association’s concerns are related to clauses which require its members to “operate in an office separate from a financial institution or insurance company and hold out publicly as an office of an agency (or) firm.” This, they say, “may unintentionally capture direct relationship insurers who co-locate their sales offices or other insurance company personnel.”
Separate offices
The submission warns that “the council’s proposal requiring separate offices for agencies and insurers would be problematic for these exclusive or captive insurance agencies that are affiliates of insurance companies. Should the council retain this rule, it may mean that these insurance agencies would have to move their staff to new office space or move their work out of the province. We are not clear about what harm this requirement is meant to prevent,” they write. “Nor are we aware of it being a condition in other provinces.”
The submission also warns that the additional costs of licensing would ultimately be borne by consumers.
