1 February 2018 13:30
Martin-Eric Tremblay, senior vice-president ofAviva Canada in Quebec, testified before the Committee on public finance, last Tuesday. He reiterated the support of his company to bill 150 and took on some practices of the industry.
Mr. Tremblay has first of all asked what the rule of ownership of 20 % that an insurer holds in a brokerage firm is maintained, as proposed by the Quebec minister of Finance Carlos J. Leitão.
During his hearing, Mr. Tremblay stated that the industry has changed a lot in recent years. He added that it is adapted to «practice smart» so that the conflict of interest not disclosed «harm today» transparency and consumer trust.
Some insurance companies evade the rules
«Indeed, some insurers do indirectly what is not directly allowed by the principle of the act through agreements or a corporate structure here yet ingenious. As such, it became a common practice for brokerage firms presenting themselves as brokers without actually offering several insurers, and this is to the detriment of the consumer «, he said in a parliamentary commission.
For Aviva Canada, bill 150 will come to fill the whole and will promote fairness, equity, transparency and consumer confidence. «For us, a modification of the 20% rule as some have suggested could lead to a reduction in the number of insurers, a decline of the rule of products offered to consumers in québec and an increase, therefore, unwarranted premiums due to a decrease of the competitiveness in the sector of damage insurance,» said Mr. Tremblay.
The shareholding does not prevent the growth
The insurer considers that the rule of 20% does not prevent the dealers to grow. «Let’s be clear ! The rule of 20% does not prevent the brokerage firms to adapt to the evolution of the market, contrary to what some say «, stated M. Tremblay.
«Moreover, the regulations limiting the ownership of the brokerage firms do not create an obstacle exaggerated to obtain funding such as loans from banks for its development in the same way as any other SMES «, he added.
Three bids rather than four
During his hearing, Mr. Tremblay has also pointed out that Aviva Canada was in favour of the proposal of the minister to require a firm wishing to appear as a dealer offer four quotes from different insurers to his client. The insurer would have preferred three bids, he added, noting that for some complex risks, this figure will be difficult to achieve. Mr. Tremblay has requested that the minister Leitão to take them into account.
Aviva also proposes, in order to ensure the understanding of the consumer, the information provided goes beyond the simple price. «Every product and every insurer has its specificities to better respond to the needs of the client. However, Aviva believes that the bill should identify the key markets of the damage insurance, that is to say, simple products and complex products, » said Mr. Tremblay.
Promutuel made its position known
Promutuel Insurance has also taken advantage of the parliamentary commission to make it known to the dealers of Quebec its position on bill 150. The Journal of insurance has obtained a copy. For this insurer, this bill promotes the important principles of independence and transparency of the brokerage.
We are of the opinion that the broker should have more than one offer to his client when the situation allows. This obligation can prove difficult to apply in certain cases, particularly in insurance companies or at the start of a cabinet. Thus, we believe that it will be necessary that the legislature makes adjustments to the bill filed for that provision in this regard is sustainable «, can we read there.
Promutuel has also reiterated its support for the maintenance of the rule of 20 %. «This measure has the advantage of better protecting the consumer against any interference of a third party in a law firm and gives brokers the flexibility to offer their customers the product that best meets their needs, at the best price. «