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Disclosure of business relationships : two dates to remember


Aurélia Morvan

May 15, 2019 09:30

Photo : Javier Quesada (Unsplash)

By the end of the year, each brokerage firm in damage insurance will be required to disclose his business ties on his Web site, he make sales through the Internet or not.

As for the sale of traditional insurance, it will be mandatory for a representative in damage insurance to disclose his business ties if he sells a contract of insurance by the internet.

At what time will he need to do so, if asked the Log of the insurance ? TheAuthority of the financial markets has brought a light to our questioning.

At this time, the Regulation on the information to provide the consumer provides the terms and conditions of disclosure of business relationships in the context of a sale made through a representative in damage insurance.

Thus, the broker must make this disclosure verbally, at a request submission and to the renewal of a policy. They must also disclose their business relationships in writing, when sending the new font, and when sending the renewal thereof.

Mandatory disclosure, but how ?

The fact of the framing of the sale by Internet, new obligations regarding disclosure come into force in the course of this semester, indicates the Authority.

“The Act respecting the distribution of financial products and services (distribution ACT), which shall enter into force on June 13, 2019, provides that the firm offering an insurance product without the intervention of a physical person, for example via an internet website or a mobile application, must comply with the obligations applicable to a representative. The obligations regarding the disclosure of business ties are particularly referred to, ” said the Authority of the insurance Journal.

The regulator specifies that as of 13 June, the firms who will use a digital space to interact with customers and to conclude an insurance contract shall also comply with the requirements specified in the Regulation on alternative modes of distribution.

This draft regulation has been initiated by the Authority in order to clarify certain provisions of the ACT. In particular, it provides that ” the cabinet shall provide, through its digital space, the information required by some other regulations. This includes the obligations to disclosures of business relationships that provided in the Regulation on the information to be provided to the consumer “.

This regulation has not yet been made public, it is impossible to say more precisely how this disclosure should be made by dealers making sales on the Internet.

Later for web sites that are not transactional

“The firms that use a website strictly informational, so it does not allow the conclusion of a contract through a representative, will not have to comply with the Regulations on alternative modes of distribution,” says the Authority. In fact, the Web sites that are not transactional will not have to disclose their business relationships before 13 December 2019.

The Authority recalls that the Act aimed primarily to improve the supervision of the financial sector, the protection of the money deposits and the plan of operation of financial institutions, which resulted in the bill 141, ” provides for changes in insurance, including at the level of the written disclosures that must be made to consumers and to the Authority “.

These changes apply to all agencies and all offices of the brokerage in damage insurance, as these entities do Internet sales or not. It is thus provided that,” an agency of damage insurance or a brokerage firm in damage insurance will be required to disclose, on its website and in its written communications with clients, the names of the insurers for which it offers insurance products “.

Moreover, ” an agency must, in the same manner, disclose the name of any insurer with which it is linked by an exclusive contract and the goods covered by this contract.”

In the case of a brokerage firm, the court ” shall, in the same manner, disclose the following information :

  • The name of the financial institution, financial group or legal person that is bound, which holds an interest in shares issued by the firm representing more than 20 % of the equity value of this firm.
  • 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 “.

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