6 September 2019 09:30
Credit : Freepik
During his information session on the draft regulation on the brokerage, thefinancial markets Authority has introduced the concept of hybrid agency ; where a firm could appear as an agent in personal insurance and insurance broker companies.
This information session regarding the draft regulation on the brokerage in damage insurance, issued on 25 July last. Fifty people attended in person and about 150 through a webinar. A public consultation on the draft regulations runs until 23 September.
The specifics of the proposed regulations have been addressed in three parts : the definition of a brokerage firm and agency for property and casualty insurance, the distinction between a broker and an agent, as the information to be disclosed.
The notion that has attracted most attention is the one that specifies the paragraph 2 of the article in the draft regulation, where the Authority introduced the concept of the hybrid agency. It would be a firm that combines the activities of agency in personal lines insurance and brokerage firm in insurance companies. The hybrid agency should obtain a contract of exclusive distribution with a single insurer for the motor insurance and personal home, but could continue to deal with several insurers in insurance companies.
Sylvain Dubé, analyst organizations’autoréglementation of the Authority, has also suggested that two brokerage firms are forming a partnership in order to have access to a total of three insurers.
In addition, the regulator has reiterated that article 4 of the draft regulations : the double permit, or agent in personal insurance and insurance broker companies to a single representative physical, is prohibited.
This is in addition to the reminder that panelists have made that a broker may be defined as such if it complies with the principles offer a choice of different products of multiple insurers and it will be able to get quotes from at least three insurers financial groups that are different.
Finally, the Authority has clearly listed this as a dealer and a firm must disclose to a client, verbally and in writing. Both should indicate the name of the three major insurers personal insurance that they offer the products and the percentage of the volume of total premium for each. If the broker does business with a banner, the same principle applies with respect to the percentage of premium volume.
A period of questions tense
The period of questions that followed the information session proved to be tense. Those present took the opportunity to share their concerns and comments to face the possible consequences of the draft regulation of the Authority on their business.
Several have complained of “operational constraints” additional to the brokers in connection with the disclosure, they consider that the agents do not have. “We just create an imbalance operational, which generates significant costs “, claimed a dealer.
Another broker has also presented various concerns to disclose the distribution of its premium volume. “The Authority requires almost brokers to disclose their financial statements on their web site. “
Many have claimed that these changes affect particularly the brokers in the region, where the shortage of labour is particularly felt, testified a broker. She also talked about significant costs are driven by the attachment to a banner in order to retain the title of brokerage firm and broker, which would not necessarily be profitable.
That’s not a problem, and the representatives of the Authority have hammered out several times, the draft regulation is not cast in concrete, and the comments formulated in the framework of the public consultation could do with a change.
Why these additions?
The regulator wanted to clarify and elaborate on certain provisions, which could be a source of confusion, explained in the introduction, Louise Gauthier, senior director, policy supervision of the distribution to the Authority. “The draft regulation brings important changes that could upset the business models. We are aware that these are sensitive issues that are at the heart of the life of professional dealers. “
Ms. Gauthier was, however, keen to stress that some of these issues are directly included in the act, the Authority can not change, but that the regulator has the power to amend the provisions of its proposed regulations that clarify the law. His colleagues present throughout the information session, many times repeated this statement. “The Authority understands that, for brokers, the regulations and the law are one “, has all the same stated Ms. Gauthier.