The property and casualty insurance industry has unveiled a plan to provide consumers with enhanced clarity and access to information in insurance sales and service.

The plan, detailed at a news conference in Toronto on Friday, is intended to ensure consumers enjoy the highest level of transparency and confidence in their dealings with the industry.

“We’re not drastically changing what we do,” says Mark Yakabuski, VP of the Ontario branch of the Insurance Bureau of Canada, the national trade association for private property and casualty insurance companies. “We’re sharing what we do.”

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, IBC. “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.

Companies will also commit to providing full disclosure on their web sites by January 1, 2005 of information concerning the way in which 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.

In tandem with the IBC, Insurance Brokers Association of Ontario also released its point-of-sale set of rules for disclosure of broker commissions.

“With this document, we will be advising our clients at the point-of-sale how we are compensated, and any other financial terms that we have with insurers without the client needing to ask,” said Bob Carter, CEO, IBAO.

“We have been working for some time with our regulator, the Registered Insurance Brokers of Ontario, to develop a disclosure protocol, and we are happy to be able to release it today,” Carter adds.

The cost of disclosure will be born by the industry, says Carter. It will not be passed on to the customer, he adds.

Brokers will also be facing new conflict of interest guidelines based on the commitment made today by insurers and brokers. Those who breach the guidelines will be punished, says Carter. They could be suspended or have their license taken away.

IBAO says it will be conducting information sessions for brokers across the province to ensure they are fully aware of the disclosure rules.

In addition, the P&C industry is reminding consumers of their responsibilities under the insurance contract.