Quebec brokers concerned about regulatory ‘vacuum’ on web sales

Quebec brokers are pushing for a prohibition on buying property and casualty insurance over the Internet without some involvement from a broker or agent.

Under the province’s proposed Bill 141, the Act respecting the distribution of financial products and services would be changed to allow companies “to offer financial products and services by technological means,” the provinces states in an explanatory note on Bill 141.

Selling P&C insurance products online “without any involvement of a certified representative whatsoever will be authorized by Bill 141,” Patrice Pouliot, chairman-elect of the province’s brokers’ association, told Canadian Underwriter Monday.

“They leave it to the AMF (L’Autorité des marchés financiers)” to write regulations on Internet insurance sales on the part of carriers, brokers and agents, Pouliot added, noting that the province does not currently regulate insurance sales over the Internet. “It’s is kind of a vacuum.”

Regroupement des cabinets de courtage d’assurance du Québec (RCCAQ), the provincial broker association, lobbied for clarity about online sales during recent hearings on Bill 141. The hearings were held before the National Assembly Committee on Public Finance and wound up on Jan. 18.

If passed into law, Bill 141 would eliminate Chambre de l’assurance de dommages (ChAD), a provincial broker regulator with authority analogous to that of Registered Insurance Brokers of Ontario. Brokers would be overseen by the AMF, which unlike the ChAD, is not a professional self-regulatory body.

Regarding the online sale of insurance, Pouliot said the province’s brokers are concerned that some customers may not understand exactly what insurance companies mean in their wording on application forms, and the broker can help consumers understand those wordings in everyday language. Brokers are also concerned that consumers may have coverage gaps that they do not discover until they have a claim, at which point it is too late to buy adequate coverage.

When a consumer fills out an online application for P&C insurance, this, in RCCAQ’s view, “should be verified by a certified representative” and there should also be “an exchange of information between the client and the insurance broker” or agent, so that the customer is buying a product that fits the needs of the customer.

While consumers may want to buy insurance online in the same manner that they buy music, the consequences of buying inadequate insurance is “not the same as if you don’t like the song that you bought for 99 cents,” Pouliot noted.