31 May 2019 14:30
Stephen Frank | Photo : Réjean Meloche
L’Association canadienne des compagnies d’assurances de personnes (CLHIA) announced that it was abandoning the guideline 19 (LD19) on the disclosure of the remuneration of advisers in the insurance and retirement group.
“This decision was taken after extensive discussions with market participants, including advisors and their associations, and a careful evaluation of the comments made,” says Stephen Frank, president and chief executive officer of the CPOMA, by way of a press release. Our industry has always advocated strongly the transparency of the market, and it intends to work closely with the regulatory authorities and other stakeholders on this issue. “
The withdrawal of the LD19 is effective today.
Thus, measures of disclosure relating to sales in group retirement due to come into force on July 1, 2019 for new contracts and January 1, 2020 for existing contracts will not go forward. Same scenario for the sales in group insurance, the provisions of which were to enter into force on 1 January 2020 for new contracts and January 1, 2021 for the existing contracts.
A guideline is controversial
The guideline has aroused the dissatisfaction of some advisors and brokers in these disciplines. A group had been formed comprising members and industry associations, Advocis, Conference for Advanced Life Underwriting (CALU), the Third Party Administrators Association of Canada (TPAAC) and the Canadian Group Insurance Brokers (CGIB).
The group accused including the CLHIA to act as a regulator so that it is not the mission of the organization. He also declared that the LD19 would prejudice the independent advisors, that it deemed to be particularly affected by the measures.
“The correct decision”
“We welcome the CLHIA made this decision, despite the obstacles that we have conducted so far. We believe that this is the right decision to take. It is important that consumers do not see this as a step backwards vis-à-vis the transparency or disclosure. We just think that this is not the role of the CLHIA to impose it, ” said Mike McClenahan, president of the TPAAC, the Journal of insurance.
He added that the group wants to let the dust fall back before starting to work on a solution to the industry involving the CLHIA, but also the regulators. “I don’t know what it will look like the next steps, but we want to collaborate on an approach to disclosure that will include all the stakeholders of the industry. “
“The commitment of the CLHIA and our member companies in regard to the disclosure of information remains. We have a lot of respect for the role of the advisors on the market of insurance of people. The participation of all stakeholders is essential if we are to develop and successfully implement practices for the management of conflicts of interest for the products of collective insurance and pension. “