Profile: Pioneer of Self-Regulation

In honour of the 25th anniversary of broker self-regulation in Ontario, Donald Lambie, the first-ever president of the Registered Insurance Brokers of Ontario (RIBO) in 1981, has agreed to meet in the cluttered study of his Etobicoke, Ontario home. Framed family photos, tattered black-and-white shots of a younger Lambie serving overseas as a pilot during World War II and model Spitfires are among the many mementos filling the room. A sign on the door reads: “If a cluttered desk signifies a busy mind, what does an empty desk signify?” Lambie’s busy mind has proven to be very adept at overcoming challenges; in fact, he did just that when he, along with 10 others, laid the foundation for RIBO and broker self-regulation in the province.

CREATION OF RIBO

According to Lambie, by February 1979 it became clear to brokers that the province’s superintendent of insurance simply didn’t have enough resources to oversee a growing jurisdiction. As a result, the Ontario Insurance Agents Association (OIAA) and the Toronto Insurance Conference (TIC) joined together to persuade the provincial government to allow insurance brokers to become self-regulated. Frank Drea, Ontario’s minister of consumer and commercial relations at the time, asked the two organizations to come up with an outline of their vision for RIBO and how they proposed to fulfill such a mandate. One month later, Queen’s Park gave RIBO’s creation the green light.

A steering committee met in one of the broker’s offices to begin laying out the framework for what would eventually become RIBO. The committee consisted of 11 people from across the province – four OIAA members, three TIC members, one independent and three members of the public who were added later.

Lambie, who was then an account executive for Morris & Mackenzie, was elected the first chairman of the steering committee. He subsequently became president of the organization, a presidency that would last until November 1984. He remains actively involved with the organization as a chairman.

He recalls the early trials of having to develop not only the legislation and regulations upon which RIBO would be based, but also define the staff roles and administrative functions that would be needed to get the organization running. “There was nothing we could use as a precedent to describe the jobs required to be filled in detail,” he says. “We had to work on those details as we went along.”

Within this first year, RIBO moved to a modest office on King Street in Toronto. Once the organization had a home, the mail began to pour in from as far away as Australia. “In addition to handling the mail that was coming in almost immediately, we were trying to get organized at setting up committees and so on,” Lambie says. “Consequently, we were getting pressures from a number of different directions.”

In particular Lambie remembers one broker in the southern United States, who demonstrated exceptional persistence. “He had written to us about six times inquiring about the conditions under which RIBO would operate before we got around to replying to him because any response would be premature. We didn’t even have a correspondence secretary,” Lambie says.

DRAFTING LEGISLATION

By April 1980, Lambie, the steering committee and Bob Coghill, RIBO’s first manager, had hammered out the first draft legislation and regulation. Now the group prepared to open the floor to brokers, who would be operating under these rules, for suggestions and comments. “It was interesting at the beginning,” Lambie recalls, “because people were very leery about another bureaucratic entity coming into the field.” But brokers warmed up to the idea after hearing that RIBO intended to present the legislation to them at meetings throughout the province. The committee took the proposed legislation on the road, presenting it at 37 different locations all across the province.

Still, in a few instances it was a tough sell, he laughs. “At a meeting we conducted out of the Constellation Hotel [in Toronto], there were about 300 brokers in attendance,” Lambie remembers. “One fellow stood up and said: ‘What you’re telling me is that you want to put us out of business.’

“And I said: ‘No, not really.'”

To which the broker apparently replied: “Well, we’re not doing some of the things that you’re asking for, like errors and omissions in insurance and fidelity insurance. And if we don’t go along with it, what then?”

Lambie paused, cleared his throat and said to the broker: “You’ll be given a certain period of time to change over. And we’ll be quite flexible with that, as long as you’re moving on the change. If you don’t ultimately change, we will put you out of business.”

Applause followed Lambie’s response.

But the consultations allowed the committee members to gain a better understanding of what was occurring in the industry, Lambie said. Sometimes the discoveries were not as positive as one might have hoped. “We ran into a lot of things that were happening and were really the reason why we wanted to regulate ourselves,” he says. He noted that without self-regulation, these same questionable practices might have occurred “to the embarrassment of the industry and the broker associations, because of the inability of the superintendent of insurance to cover all of the angles.” Lambie shifts back in his chair and folds his arms. “We cleaned the house.”

FINAL CONSULTATION

The government gave the committee a deadline of Oct. 1, 1981. By then, the legislation would be proclaimed and RIBO would officially become fully operational and responsible. The committee made the deadline, ultimately ironing out RIBO’s inaugural structure after 15 drafts of the act – including more than 30 drafts of the regulations. Throughout this time, the committee performed three more consultations with the brokers, this time by mail. “If I’m exact, I totalled up the hours that all of the members of the committee put into the process,” Lambie says. “As a whole, we spent over 5,000 hours coming up with these drafts for legislation and conducting correspondence with people writing to us, the whole bit before we were proclaimed.”

There would be one last roadblock. Early in 1981, there was a cabinet shuffle; the new department minister felt the committee should go back to the brokers for a fourth and final time. In the meantime, brokers were becoming increasingly disenchanted as they awaited their marching orders. “If they had to change their office procedures, they needed the time to do it,” Lambie says, explaining the reason for brokers’ impatience. But because the legislation hadn’t officially been proclaimed, RIBO had to keep quiet about just what the proposed changes would entail. Having performed the fourth round of consultations, the regulations finally received Queen’s Park’s approval on Sept. 23, 1981, seven days before they were supposed to have taken effect.

“And that was the only time that the brokers had to change systems around and know what the rules were,” Lambie says, shaking his head. “But the brokers are understanding. They lived with it.”

Ultimately, he says, the process established an important benchmark, which RIBO executives continue to use when making important decisions. “Is this in the best interest of the consumer?” Lambie says of the question the early committee members frequently asked each other. “That became a very important benchmark for us to judge all of our activities by.”

Lambie retired in 1987 as senior vice president in charge of Morris & Mackenzie’s Toronto operations. His decision ended a career in the insurance industry that began in 1939, the only break being when he served as a pilot in the armed forces during World War 2. Nevertheless, retirement has not kept Lambie from volunteering in service of his industry. He still attends RIBO functions and keeps his finger on the industry pulse. He expresses concern about issues such as contingent profit commissions and the possibility that financial institutions might buy and own brokerages.

Standing in the hallway outside of his study, where the walls are lined with photographs of himself sitting next to premier Bill Davis, Drea and the original RIBO committee members, as well as awards of recognition from the industry, Lambie offers a final reflection. “I consider it a unique privilege to have been involved as I was with RIBO from the very beginning,” he says. “The co-operation with members of council, government and brokers was absolutely splendid and enabled us to meet the challenges in setting up RIBO.”