TORONTO, Nov. 12, 2004 — The Insurance Bureau of Canada today revealed details of a plan to provide enhanced clarity and access to information in insurance sales and service. Components of the plan include a Code of Consumer Rights and Responsibilities, and an industry commitment to Web disclosure of details on distribution compensation and ownership links.
“We recognize the need for clarity to help consumers make informed and confident choices when they buy insurance,” said Stan Griffin, President and Chief Executive Officer, Insurance Bureau of Canada. “Regulators have always had the responsibility of collecting information on how insurance representatives are paid. Today’s initiatives will put this information directly into the hands of consumers.”
Insurers are also putting into place a plain-language Code of Consumer Rights and Responsibilities. The Code summarizes core rights that consumers enjoy when purchasing home, auto, and commercial insurance. “The Code describes key consumer rights such as the right to clear information about coverage and the claims settlement process, and the right to information about how their insurance sales representative is being paid,” Griffin added.
In addition, the industry is reminding consumers of their responsibilities under the insurance contract. “An informed consumer will be aware of their key duty to share pertinent and timely facts about their cars and properties to their insurers,” added Griffin. “The fact is that insurance is a contract, and both the insurer and the consumer share a responsibility to act in utmost good faith at all times in their dealings with each other,” said Griffin.
Companies will also commit to providing full disclosure on their Web sites by January 1, 2005, of information concerning the way in which their sales intermediaries — agents, brokers, and other company sales staff — are compensated. To complement parallel efforts by brokers, point-of-sale disclosure information will be provided by insurers who sell through dedicated agents or other intermediaries. It will indicate whether these intermediaries are paid a salary and list the range of potential contingent compensation available to intermediaries that work for a given insurer. Other information concerning company ownership links of brokerages and financing links will also be made public.
“We are announcing these initiatives in Ontario and we will be approaching all provincial ministers in charge of insurance to share with them the actions we have announced today,” said Griffin.
Insurance Bureau of Canada is the national trade association of the private property and casualty insurance industry. It represents more than 90% of the non-government home, car, and business insurance in Canada.