CLHIA-ACCAP

2 • Prohibit unfair and deceptive practices • Require the licensing of insurance advisors • Require that advisors be screened and monitored for suitability, and that unsuitable activities be reported • Require insurers to belong to an independent third-party dispute resolution service • Require that customers be provided with material facts about the contract • Require that claims be paid promptly These regulatory approaches are reinforced by the work of the Canadian Council of Insurance Regulators (CCIR) and the Canadian Insurance Services Regulatory Organizations (CISRO), to which insurance superintendents and/or insurance councils belong. CCIR sets out a number of expectations about industry behaviour through the following: • Principles for Consumer Protection, which set out standards for disclosure, educated and ethical intermediaries, consumer education, consumer remedies and effective regulators • The National Complaint Reporting System, which requires insurers to report escalated complaints to regulators • Risk-based Market Conduct Regulation, which promotes the benefits of risk-based regulation and sets out regulatory principles for this approach • Managing Conflicts of Interest, which sets out principles that the customer's interest take precedence over the advisor's, that the advisor disclose conflicts or potential conflicts of interest, and that the product sold is suitable for the needs of the customer • Strengthening the Life MGA Distribution Channel, which makes recommendations to improve processes and clarity around insurer and MGA roles The life insurance market in Canada is highly competitive, a fact that contributes to a customer-focused approach. Simply put, a customer-focused approach is critical to insurers if they are to continue attracting and retaining customers. Life and health insurers are members of the CLHIA, and adhere to a number of industry guidelines focused on good disclosure about products, screening and monitoring advisors, and managing conflicts of interest. A list of CLHIA Guidelines is attached as Annex A. APPROACH OF THIS PAPER This paper is organized around what the industry believes are the key building blocks that contribute to a robust, customer-focused system. Under each, we explore the objective and the current practices that support that objective. And, where appropriate, we consider alternate practices that could be used to improve or enhance the system. A number of these recommendations would require appropriate transition periods and discussions between regulators and industry to fine-tune the details.

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