25 July 2019 13:55
Photo : Freepik
As of December 19, 2019, a broker must prove that it can have access to the submissions from three insurers not belonging to the same financial group. Failing that, it will need to retain the information to ensure the evidence that it has made every effort to comply with this requirement.
At least that is what provides theAuthority for the financial markets industry. It has launched, today, the 25th of July, at 13 o’clock, a consultation on the definition of the insurance broker, which will last 60 days and will end on September 23. The application of this framework will take place by the end of the year, starting on 19 December.
What will change
The consultation document published by the Authority confirms that these provisions only apply in personal insurance for the automotive market and the home. The insurance companies is excluded.
The Authority also confirms that a brokerage firm will be able to deal with a banner to have access to three distinct markets. At the end of each year, the brokerage firms should also disclose their volume of business to the Authority to prove that it complies with the new framework.
Thus, a firm that wants to wear the title of broker will have to meet three conditions :
1) not to be an insurer;
2) That its capital is in accordance with section 150 of the Act respecting the distribution of financial products and services (distribution ACT), and that no financial institution, financial group or legal person who is bound does not hold :
- Or an interest enabling it to exercise more than 20 % of the voting rights attached to the shares issued by the firm;
- A participation representing more than 50 % of the equity value of the firm;
3) That its representatives are brokers who comply with article 6 and article 38 of the ACT where the products offered by these brokers are insurance products that belong to a category referred to or, if it is without the intermediary of a natural person (via Internet, for example), the firm itself complies with these two articles.
The firm that does not meet these criteria will be recorded as a agency of damage insurance.
New disclosure rules
As of December 19, 2019, the brokerage firms will be required to disclose to the Authority the percentage of the total volume of risks placed with the insurers with whom they deal. “The percentage disclosed should be that which has been reported to the Authority by the firm on the occasion of her continuation of registration via the form to this effect. This disclosure should be made to each client before the representative does enquière of his situation, to identify its needs and depending on the communication mode chosen. “
Also, in the case of significant changes in the business volumes during the current year, disclosures need to be adjusted after the occurrence of the change. The firm must also provide ” the name of any insurer to which are paid more than 60% of the premiums stipulated by the contracts entered into by the firm and belonging to the same category “.
The agencies also involved
The consultation document also comes to specify who may appear as agency damage insurance. The Authority introduced the obligation for these agencies to hold an exclusive contract with the insurer to which it sells the products.