The Canadian Council of Insurance Regulators (CCIR) and the Canadian Insurance Services Regulatory Organizations (CISRO) have released final guidance that sets out their overarching expectations for how insurers and intermediaries conduct insurance business and ensure the fair treatment of customers, the two organization announced Thursday.
The joint guidance details regulators’ expectations for both insurers and intermediaries, such as managing general agencies, agents, brokers and reps.
The principles-based guidance covers a wide variety of issues, ranging from how firms should deal with conflicts of interest, to product design, disclosure, the provision of advice and resolving client complaints and disputes. It also covers areas such as outsourcing, governance and protecting customer information.
“Our mandate as insurance regulators is to ensure that all market participants have a focus on treating customers fairly. This guidance document outlines the key principles that we expect those market participants to engrain into their daily practices,” Ron Fullan, CISRO chairman, says in a statement..
The joint guidance is designed to be flexible so that firms have the ability to determine how to meet regulators’ expectations, depending on the nature, size and complexity of their businesses.
Among other things, regulators’ expectations include firms to achieve outcomes such as “developing, marketing and selling products in a way that puts customers’ interests ahead of their own,” providing effective disclosure “before, during and after the point of sale, ”and minimizing the risk of mis-selling.
The regulators published draft guidance, modelled on international standards, for public comment in May. CCIR and CISRO have also consulted with other regulators and industry stakeholders. The publication of joint guidance reflects increasing co-operation among Canadian insurance regulators, the organizations say.
“Fair treatment of customers is a key focus of financial services regulatory authorities in Canada and abroad. This joint guidance confirms that regulatory partners and industry stakeholders can work collaboratively to achieve common goals in the insurance sector,” Patrick Déry, CCIR chairman, says in a statement.