CCIR and CSIR Consultation Paper “Relationships Between Insurers and Sales Intermediaries” Released

June 3, 2005 — The Canadian Council of Insurance Regulators (CCIR) and the Canadian Insurance Services Regulatory Organizations (CISRO) are pleased to release a consultation paper entitled Relationships Between Insurers and Sales Intermediaries. The consultation paper is being released today for review and comment by all stakeholders and other interested parties.

The consultation paper was prepared by the CCIR / CISRO Industry Practices Review Committee (IPRC). The IPRC was formed in October of 2004 to ensure a coordinated national approach to the regulators� review of insurance practices regarding the relationship between intermediaries and insurance companies. For the first phase of its review, the IPRC developed a risk-based market conduct assessment questionnaire to obtain information from insurers about their relationships with brokers, agents, and other sales intermediaries in Canada. The consultation paper has been developed from the responses to these questionnaires that were sent to property and casualty (P&C) and life and health (L&H) companies in November and December 2004 respectively. Summaries of the responses to both the P&C questionnaire and the L&H questionnaire are included in the consultation paper.

As part of the review, the IPRC has been considering the impact various aspects of the insurer and sales intermediary relationship may have on consumer confidence. It is also exploring possible policy options for additional regulatory measures that may be required to enhance consumer protection.

The next phase in the review involves soliciting stakeholder comments on the issues discussed in the consultation paper. It is important to note, however, that none of the approaches outlined in the consultation paper should be construed as the official position of any provincial, territorial or federal government or agency. The IPRC welcomes the comments, suggestions and ideas of consumers, insurance industry stakeholders and any other interested parties regarding the issues described in the consultation paper. A copy of the consultation paper can be found on the CCIR website ( The IPRC looks forward to receiving your submissions by August 3, 2005.

Electronic submissions would be preferred. Please note that CCIR and CISRO intend to publicly release all submissions received pursuant to this consultation process by posting them on the CCIR web site.

An Executive Summary of the Consultation Paper is available at This document (5 pages) describes the issue that is being addressed. Some general findings:

  • Most insurers have written policies and procedures in place governing compensation to brokers, agents, and other sales intermediaries.

  • No evidence of any illegal insurance related activity was found. Regulators continue to monitor the marketplace and will take any action necessary if illegal activity is alleged or detected.

  • The IPRC believes that some current business practices may contribute to a perception of or actual conflicts of interest in the marketplace. At issue is the
    appearance to a reasonable, informed, third party that bias exists in the course of
    providing advice to consumers due to a conflict of interest or potential conflict of
    interest. This may have a negative impact on consumer confidence in the insurance

In addition specific findings to Property and Casualty and to Life and Health are also noted.

From these some policy options have been developed:

  1. Codify the priority of the client�s interest;

  2. Restrict performance-linked benefits offered to intermediaries; and

  3. Enhance transparency of compensation, ownership and other financial interests.

As a conclusion, the overview describes the next steps likely to be taken.

Finally the entire Consultation Paper (48 pages) is posted at


The Canadian Council of Insurance Regulators (CCIR) is an inter-jurisdictional association of regulators of insurance. Its mandate is to facilitate and promote an effective regulatory system in Canada to serve the public interest. CCIR works cooperatively with other financial services regulators to enhance consumer protection and to develop and harmonize insurance policy and regulation across jurisdictions. Visit