Field of Dreams

Larry Kozakevich, the incoming president of the Insurance Brokers Association of Canada (IBAC), may have an opportunity during his term to close the national association’s most contentious file, the Bank Act review.

The Bank Act review, which usually occurs every five years, has been the source of broker lobbying throughout the country for the past 12 months. During the federal election campaign in 2005-06, the Conservative Party stated in its campaign platform that it would not change the Bank Act to allow banks to retail insurance from their local branches.

Bank presidents have publicly called for changes to the Bank Act, which they have described as “anachronistic.” They have asked for changes that would, at the very least, allow banks to promote insurance information within their local branches. But in June 2006, the minority Conservative government didn’t recommend any such changes in its finance ministry White Paper, which outlines the proposals under Parliamentary review.

Kozakevich, currently the president of Mark’s Agency (1981) Ltd. in Saskatchewan, appears to be in a position to bring the most recent Bank Act review to a successful conclusion. But he isn’t counting his chickens before their hatched.

“Of course, we’re still working with the White Paper and the Bank Act,” Kozakevich said. “We’re very happy about the release of the White Paper, in which there were no more powers granted to the banks with regard to insurance. We had tremendous support from MPs when we visited them and discussed concerns that we had as an industry. We wanted to see competition preserved.

“For consumers, I think politicians made the right decision. It’s good public policy right now to leave the Bank Act without any changes.”

But, he added, the white paper recommendations still have to go through Parliamentary review and get passed in the House of Commons. “Until that’s done, we’re still dealing with a minority government, [and] there are just no guarantees if that bill will get passed. Or will there be an election? So you know, we hope everything will carry forward and run smoothly, but we’re not losing sight of the fact that it’s not passed yet.”

Kozakevich is a 33-year veteran of the insurance brokers industry. After graduating from high school, at the age of 19 he moved to Regina and played junior football for the Regina Rams. A teammate encouraged him to apply for a job at SGI, Saskatchewan’s public insurance body, and Kozakevich got the job. He worked at SGI for eight years, working his way up from clerical positions and gained experience in sales-related training and mergers and acquisitions. He ended up buying Marks Agency in 1981.

SPICE OF LIFE

He credits variety for his longevity in the industry. “It’s a people business,” he noted. “You get to meet a lot of folks and deal with clients on all ranges of issues – from buying cars, boats, motor homes, other vehicles and businesses to establishing businesses and farming. So it’s got a little bit of everything. You get involved dealing with institutional boards on their insurance needs and things like that, so it’s got a wide range of activities. You’re never bored.”

For six years, up until 1993, he worked hard at the Saskatchewan Independent Brokers Association, where he became president. During his time there, he helped oppose the credit unions’ desire to buy insurance brokerages. The issue was important for the association, he said, because if credit unions were allowed to buy brokerages, the new merged entities were considered to be national, not provincial entities. Brokers in the new entity would therefore not be eligible to become members of the Saskatchewan’s provincial brokers’ association.

Kozakevich said that during his time as a broker, he has witnessed first-hand the effect banks have on competition when they are allowed to retail products the insurance industry offers. “Our banks have a very privileged position in our economy, and a lot of control,” he said. “If they want to eliminate competition, they have the power to do that. I’ve seen that in my business, when we used to sell RRSPs 25 years ago: we hardly sell any anymore. The banks have taken it all over.”

READY FOR NEXT REVIEW

Should Kozakevich be fortunate enough during his term to celebrate the end of the current Bank Act review with a victory for brokers, he said one of his first priorities is to lay the groundwork for IBAC’s participation during the next Bank Act review. “I think certainly in the past year, we’ve improved communications with our members with the hiring of a communications manager,” he said. “We’ve increased our presence in Ottawa. I think the thing I would like to ensure is that when he Bank Act comes up for review again, we will be more than ready than we ever have been in the past to get our message out to MPs….We’re going to keep the ball rolling. Our message is going to be articulated to all members of Parliament, as well as to our provincial politicians, as to what’s in the best interests of consumers, so they can understand some effects that some changes may have if they ever do introduce changes to the Bank Act.”

Kozakevich said IBAC has plenty of other issues on its plate, including professional development and education. The association is planning to hire a new professional development director to help co-ordinate and market programs planned for the fall.

“We’ve got some good things happening with education and professional development,” Kozakevich said. “One of our biggest resources we look at nationally is education for brokers. We’ve been developing a new program for career-pathing and … right now we have courses for the Canadian association of insurance brokers. What we’ve got now is called the CPIB program. It’s developed by brokers for brokers. We’re going to be releasing our new marketing campaign this fall for that stream of educational programs.”

BROKER IDENTITY

In addition, IBAC continues to work on its branding program, the Broker Identity Program (BIP). Contributing money as Full Partners to the BIP program are: ING Insurance, Markel Insurance Company of Canada, Aviva Canada, Economical Insurance Group, Royal & Sun Alliance, Pilot Insurance Company, Peace Hills Insurance, Red River Valley Insurance Company and the Saskatchewan Mutual Insurance Company.

“We’ve had excellent support from insures last year with regard to investing into the program, so we can develop new advertising concepts and things like that,” Kozakevich said. “We’re developing some new TV ads right now, so that’s kind of exciting. The ads are trying to portray the trust the consumer has in dealing with their insurance broker. There’s a comfort level that if there’s a problem, somebody can help you [the consumer]… through good times and bad times.”

Referring to the new Canadian disclosure rules, which evolved out of the Spitzer and U.S. securities regulators’ inquiries last year, Kozakevich said he is prepared for any issues that may appear seemingly from thin air. Certainly, the insurance industry is “never boring,” he said. “I’m looking forward to the challenges and whatever comes my way, I will deal with it,” he said. “Right now, I think IBAC’s current executive and [IBAC president] Bob [Kimball] … is leaving things in a good state of affairs for me, so I think it’s stay the course and away we go.”

Kozakevich described his leadership style as that of “an easy-going person, with a small-town, Saskatchewan type of background.” He said he prefers to build consensus on issues, as opposed to making “abrupt” decisions. “I try to think out situations thoughtfully before acting or reacting,” he said. “I’m not a cheerleader type of leader. I’m more of the quiet, reserved soft-spoken type.”