A letter from the Independent Financial Brokers of Canada (IFB) addresses the licensing fee hikes proposed by the Insurance Council of British Columbia (ICoBC) in March 2023.
At that time, the council put out a call for consultation on a new rate increase. The ICoBC is proposing $425 as the new fee for individual licences (up from $275 in 2021) and $1,000 for agency/firm licences (up from $800 in 2021). The council is also seeking amendments to Rule 5, which deals with council fees, to permit a fee to be applied to licence upgrades.
However, the IFB says higher fees for life insurance licensees could result in negative unintended consequences to the industry.
The brokers group says the change to fees, which are already higher than those in most other provinces and territories, could discourage individual agents from obtaining and renewing licences. The letter says that as independent business owners, agents are cost-sensitive and lack means to absorb fees.
Related: ICoBC fines life agent, imposes licensing conditions
Related: Positive messaging may help your clients save more
The IFB says the consultation paper that forms the basis of the fee increase does not provide any evidentiary support for the changes.
“Council has not provided evidence that it is currently underfunded, and if it is, if this shortfall is across all licensing categories or specific to a particular segment of its regulated entities (e.g., life insurance, general insurance, etc.),” says the letter.
The IFB also says that in recent years the council has introduced new revenue generation streams, such as the mandatory council rules course, which should support ICoBC operational costs, reducing the need to increase fees.
“We would like to better understand the underlying rationale for the proposed fee thresholds, how future increases will be managed to promote industry confidence and how these decisions align with Council’s operating budget/expenses,” says the IFB letter.
