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CISRO Publishes Principles for the Conduct of Insurance Intermediaries

By Marisa Coggin and Katie-May O'Donnell
June 9, 2021
  • General
  • Insurance
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On May 25, 2021, the Canadian Insurance Services Regulatory Organizations (CISRO) published a news release seeking input from stakeholders on CISRO’s development of principles of conduct for insurance intermediaries (the Principles). The Principles are available on CISRO’s website at www.cisro-ocra.com.

CISRO previously developed guidance jointly with the Canadian Council of Insurance Regulators (CCIR) for the Fair Treatment of Customers, which addressed the expectations of insurers and intermediaries in their dealings with customers, regulators and one another. The Principles are intended to be aligned with the core principles of the International Association of Insurance Supervisors. The Principles are also intended to reflect minimum regulatory requirements that are shared across Canada regarding the fair treatment of customers; however, the specific (and more stringent) requirements in each jurisdiction continue to apply.

Notably, CISRO’s definition of “Intermediaries” includes adjusters, individual agents, brokers and representatives as well as business entities that distribute insurance products and services, including managing general agencies and third party administrators (emphasis added). CISRO’s definition of “Customer” includes policyholders (which may include a certificate holder) or prospective policyholder with whom an insurer or intermediary interacts (emphasis added), and includes other beneficiaries and claimants with a legitimate interest in the policy.

The Principles consist of 10 high-level expectations in the following categories: (1) Compliance/Outcomes; (2) Customer’s Interests; (3) Conflicts of Interest; (4) Advice; (5) Disclosure; (6) Product and Service Promotion; (7) Claims, Complaints Handling and Dispute Resolution; (8) Protection of Personal and Confidential Information; (9) Competence; and (10) Oversight.

In our view, the Principles reflect the current formal and informal expectations in most jurisdictions for licensed insurance agents, adjusters and representatives. MGAs and TPAs in particular should consider whether, and to what extent, the Principles affect their current business practices.

On June 1, 2021, the Financial Services Regulatory Authority of Ontario released a statement advising that it will initiate a consultation process later this year regarding a proposed approach for adopting the CISRO Principles into its regulatory framework. We expect that certain other regulatory authorities may take a similar approach.

CISRO is seeking input from stakeholders in the insurance industry as well as consumer advocates on the proposed Principles. Submissions should be made by email to CISRO at: cisro-ocra@fsrao.ca by July 9, 2021.

As always, we would be pleased to assist with any submissions or questions regarding the Principles.

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Marisa Coggin

About Marisa Coggin

Marisa Coggin is a partner in the Corporate and Insurance groups at Dentons. Marisa’s practice focuses on corporate and commercial law with an emphasis on corporate and regulatory insurance. Marisa also offers experience in, and regularly assists clients with corporate reorganizations, mergers & acquisitions and financing.

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Katie-May O'Donnell

About Katie-May O'Donnell

Katie-May O'Donnell is an associate in the Corporate and Insurance groups at Dentons. Katie-May practices corporate and commercial law with an emphasis on private mergers and acquisitions and regulatory matters in the insurance industry.

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