31 January 2018 11:15
Carlos J. Leitão | Photo : Denis Méthot
The insurance industry rejected almost unanimously the need for a broker to provide four bids to a customer. Even insurers recognize that this rule would be difficult to apply.
The Quebec minister of Finance Carlos J. Leitão , however, has remained of marble in the parliamentary commission on bill 150, at least in regards to the personal insurance. It showed a certain openness with respect to business insurance.
However, the superlatives were not lacking to describe what would be the implementation of bill 150 by a parliamentary committee : «inapplicable «, » inadequate «, » ineffective «, » risk of delays «.
Jean St-Gelais | Photo : Denis Méthot
Leave a margin of manoeuvre
The president and chief executive officer of La Capitale financial Group, Jean St-Gelais, spoke out against this requirement in the bill. The Capital has the direct insurer La Capitale general insurance, as well as the insurance brokerage The Unique general insurance.
«It is necessary to leave a margin. It can be complicated. «Mr. St-Gelais, who testified alongside representatives of the Corporation of the insurers direct de dommages du Québec (CADD), has suggested that the exact number of submissions should not be prescribed in the law, preferring to rely on theAuthority of the financial markets.
Easy to find 4 proposals in individual insurance
The minister of Finance, Carlos Leitão, has admitted, during a trading period that to this chapter, that it was necessary to make a distinction between insurance for individuals and insurance for businesses. It has been suggested that the law should specify to the companies.
Michel Laurin | Photo : Denis Méthot
For individuals, it recalled that by making submissions via the Internet, a consumer could quickly and easily get four to five proposals. It seems, therefore, surprised at the resistance to this requirement. On the merits, however, it has had the support of the president of CADD, Michel Laurin, who is also chief operating officer ofiA Auto and home.
«For the number of proposals, it will be necessary to validate. The CADD wish there was a shopping. It is important to have more than one offer for each customer. This is the added value of the broker compared to direct writers. «
Difficult to comply with the rule
The arguments of the opponents, however, have not missed throughout the day. The president of the Regroupement des cabinets de courtage d’assurance du Québec (RCCAQ), Christopher Johnson, described to the parliamentary the many obstacles and the serious problems that would lead to this obligation for the brokerage industry.
He recalled that only seven insurers offer products generalists to serve about 700 firms across the province of Quebec. Some insurers, he noted, impose a minimum amount of premiums to enter into an agency contract with a law firm.
Christopher Johnson | Photo : Denis Méthot
«For the majority of brokerage firms, the volume of which does not meet these requirements, it will be very difficult to comply with the rule of the four insurers,» -he stressed. He also noted that some insurers are reducing the number of firms with whom they do business, which will only exacerbate the difficulty for some to go get four bids.
In addition, for some specialty risks, such as protection of a residence located in a flood zone, » said the president of the RCCAQ, there are often fewer than four insurers operating in Quebec.
Problematic for new firms
This requirement would also be problematic for new firms that are already struggling to get a first contract of agency to start a business. Mr. Johnson therefore sees a major obstacle to entrepreneurship in insurance.
As others have done during this first day of hearing, he raised the long period that would require obtaining four submissions that it would be necessary to subsequently explain it to customers. Today, he recalled, people want to get a service more quickly. If he keeps his client on the phone for a very long time for him to introduce the four bids, some will give up and go elsewhere, to anticipate some, who fear already losing some customer because of this slowness.
Marie-Lucie Paradis, Jean-François Desautels and Karine Iskandar | Photo : Denis Méthot
The professional is able to choose the best offers
Jean-François Desautels, senior vice-president Québec and digital distribution, at Intact Insurance, has insisted on the fact that the insurance professional who works in a firm that is subject to a code of ethics. This professional is able to choose for its customer among its insurers the best offer without being required to submit an X number of tenders which it considers less relevant to its needs.
«It is a offers more overall than coming to a specific number to do with consumers,» said the regional vice-president Montreal at Intact Insurance, Marie-Lucie Paradis. There are also the time and the heaviness it adds to the process so that competitors insurers are stepping up efforts to have the process much more simple and smooth. For us, it grows the gap in the competitiveness of a brokerage firm versus a direct insurer. «
Minimum number of two
The RCCAQ went there of its own solution. The grouping proposes instead to keep the framework current legal which already indicates to offer more insurers to clients, specifying in the regulations that this offer should be of two insurers to a minimum by the proposal.