British Columbia

  • 2021 - Insurance Council for British Columbia - Guidelines for Managing General Agents Role and Responsibilities in the Distribution of Life Insurance in British Columbia - DRAFT FOR CONSULTATION - 13p
    • BACKGROUND
      • The Insurance Council of British Columbia (“Insurance Council”) first introduced its guidelines for managing general agents (“MGA”) in 2012 (as per Council Notice ICN 12-001 Role and Responsibilities of Managing General Agents in the Distribution of Life Insurance in British Columbia).
      • Since then, the Insurance Council has found that there are differing interpretations of the role and responsibilities of MGAs resulting in inconsistent compliance and oversight of the distribution of insurance by MGAs.
      • As a result, the Insurance Council has updated its guidelines for MGAs with respect to their role and responsibilities in the distribution of life insurance in British Columbia.
      • This guide is intended for MGAs who are developing policies and procedures and deciding how to implement specific practices in the distribution of insurance
    • Comments
      • 2021 0215 - Advocis -  5p
        • Advocis is the association of choice for financial advisors and planners. With more than 13,000 members across the country, Advocis is the definitive voice of the profession, advocating for professionalism and consumer protection.
        • 3.1 Screening and Monitoring is a Shared Responsibility
          • The screening and monitoring of advisors are shared responsibilities of MGAs and insurers.
          • The Canadian Council of Insurance Regulators’ Fair Treatment of Customers guidance states that “insurers are accountable for distribution strategies and ultimately responsible for oversight
            aspects pertaining to the distribution of their products.
          • However, the insurer’s ultimate responsibility does not absolve intermediaries of their own responsibilities for which they are accountable.”1
          • Comparing the existing guidance on the roles and responsibilities of MGAs in the distribution of life insurance2 to the Proposed Guidelines, we note that there has been a noticeable shift in the characterization of duties that can be delegated to MGAs. In the 2012 Guidelines, there is a clear emphasis on duties related to the provision of sales and distribution support.
          • In the Proposed Guidelines,3 the named duties take on an explicit supervisory and compliance tone, with little emphasis on traditional sales support duties.
        • The following table summarizes the duties that can be delegated to MGAs, as named in the 2012 Guidelines and the Proposed Guidelines:
        • Delegable Duties
2012 Guidelines Proposed Guidelines
  • Granting a life agent, on behalf of an insurer, the authority to represent that insurer
  • Facilitating the submission of contracting
  • requirements between life agents and insurers
  • Processing and tracking business submitted by life agents
  • Providing life agents with sales support
  • Facilitating the flow of information between insurers and life agents
  • Pooling of commission payments for life agents from various insurers
  • Providing compliance support to insurers in the event of a client complaint
  • Assisting in the adjusting of claims on behalf of an insurer (not common, but in certain situations involving group life insurance)
  • Compliance support
  • Screening and monitoring agents
  • Training and education of agents on insurance products and best practices
  • Development and implementation of best practices
  • Development and implementation of policies and procedures
  • Audits of agents’ files
  • Anti-money laundering compliance
  • (p4) - 3.2 Responsibility for Product Training and Marketing Material
    • In the Proposed Guidelines, we note that Council includes the “training and education of agents on insurance products and best practices” as a duty that can be delegated to MGAs.
      • MGAs can play a role in facilitating the training and education of advisors – largely by assisting the connection between advisor and insurer by providing a forum such as a seminar – but it is the insurer that is the expert in its own products and therefore it is the insurer that should provide the actual product training.
      • Likewise, we are concerned that Council is proposing that MGAs can take on the responsibility of ensuring that the marketing materials they distribute on behalf of insurers clearly and accurately represent the product. MGAs are not involved in the development of these materials, and – unless clearly evident on its face – are generally not in a position to assess the accuracy thereof. MGAs rightly and fairly rely on insurers to provide accurate information about their products and we do not believe this is a duty that can reasonably be delegated to MGAs.