Regulation (March 01, 2009)

RIBO ISSUES BULLETIN TO BROKERS ON CREDIT SCORING

Ontario’s broker regulator has issued a bulletin to the province’s brokers, saying that although the rules prohibiting credit scoring for the purpose of underwriting insurance are primarily aimed at insurance companies, the issue nevertheless affects the day-to-day business activities of brokers.

The Registered Insurance Brokers of Ontario (RIBO) addressed the credit-scoring issue in a bulletin that follows closely on the heels of a Financial Services Commission of Ontario (FSCO) bulletin on the same issue.

FSCO recently reminded the province’s insurance companies that credit scoring is not allowed for the purpose of automobile insurance quoting and underwriting practices.

RIBO noted that the collection of a client’s credit information is covered by RIBO’s rules governing the province’s brokers.

Information acquired over the course of a professional relationship concerning the business and affairs of a client must be kept in strict confidence by brokers, according to section 14.5 of the RIBO Code of Conduct.

Section 14.5 also notes that, “the member shall not divulge any such information unless authorized by the client to do so, required by law to do so or required to do so in conducting negotiations with underwriters or insurers on behalf of the client.”