Insurance regulators finally are waking up to the need for policies that aim to ensure insurance industry firms treat clients fairly. Now, securities regulators must follow through on their own initiatives that would push firms to put clients first. Most important, the financial services sector must embrace these efforts.

On the insurance side, the Canadian Council of Insurance Regulators (CCIR) and the Canadian Insurance Services Regulatory Organizations (CISRO) recently published joint guidance on treating clients fairly. Since then, the Financial Services Commission of Ontario has published its own guidance on the subject.

This emphasis on good conduct in the insurance industry is welcome because that industry often lags the securities industry in guiding firms’ dealings with clients. Yet, insurance products often are more complex and, from the consumer’s perspective, require decisions that could be tougher.

At the same time, the Canadian Securities Administrators (CSA) just wrapped up the comment period on its so-called “client-focused reforms,” which would require investment industry firms and financial advisors to put clients’ interests ahead of their own when dealing with conflicts of interest, “know your client” issues and suitability.

Now that the CSA’s initial consultation period has closed, the CSA must finalize its reforms and move ahead with implementation. This is particularly important, given the newly erratic approach to regulatory policy in Ontario, an approach that has imperilled another consumer-friendly reform initiative and may undermine investor confidence.

The underlying objective of all these efforts is laudable: to raise standards in the financial services sector and improve outcomes for clients. But what’s critical is that the sector embrace the spirit of the regulators’ work and commit to treating clients fairly. To that end, the CCIR/CISRO guidance is particularly welcome because it calls on the insurance industry to consider the fair treatment of clients, from the product-design stage and the sales/advice process all the way through to the process of resolving client complaints and disputes.