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Rule of 20 % : two other insurers opposed the abolition

by

Hubert Roy

June 16, 2017 09:45

Photo : Freepik

After Aviva Canada, it is the turn of Promutuel Insurance and The only insurance general to oppose the abolition of the rule of 20 %, which limits the participation of an insurer in the ownership of a brokerage firm.

In a message entitled » Promutuel Insurance is proud to support the independent brokers «, and the Journal of insurance has obtained a copy, the insurer has indicated that it will introduce a memory in the framework of the consultation launched by the ministère des Finances du Québec on the property of brokerage firms. «Promutuel Insurance wishes to reiterate its support for the network of independent brokers and underline the importance of their presence in the insurance industry of damages. It is in this spirit, and in order to preserve the value of a network of independent brokers, Promutuel Insurance will leave a memory. «

«Everything must be put in place to avoid conflicts of interest»

According to Promutuel, the current rule of 20 % adequately responds to brokers ‘ needs and preserves their independence. «This measure will better protect 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. In a service industry like ours, where image counts for a lot, it is essential to demonstrate to consumers that we put everything in place to avoid conflicts of interest. «

The insurer also invite brokers to participate in the consultation. «Promutuel Insurance has always argued that it is up to the consumers to choose the representative with whom they wish to transact. To do this, they must be able to know, clearly and simply, if it is an independent intermediary or an agent of an insurer. It is the reputation of our industry, it is here, and we have the duty to defend. «

«Respect for the entrepreneurial spirit and the independence of the broker»

Mario Percussion and Yves Gagnon, respectively chairman and chief operating officer and vice-president, sales and development, have sent a message to the brokers of the Quebec yesterday afternoon. They have shared the content of the insurance Journal.

«We believe that it is important to maintain the 20% rule for the following reasons. When a consumer chooses to do business with a broker, he expects to be advised of the protections depending on the situation, and be offered the best quality/price ratio, since the broker has access to products from different insurers. This is essentially where the broker stands out and, for this, it must be independent. Our vision has always been to respect the entrepreneurial spirit and the independence of the broker. For us, it is important to put the broker in the foreground and provide the best tools, the products, the service and the price that will enable it to better serve its customer and grow its business. In this regard, we believe that maintaining the current limit of 20% of the shares with voting rights allowed the broker to maintain its independence and to best serve the interests of its customers. «

Acceleration of the level of concentration

They add that the risk to witness an acceleration in the level of concentration is already high of the damage insurance brokerage in Quebec are quite real. «It could also become very difficult for small or medium-sized brokerage firms to compete with this type of major firms in the market of the acquisition. Finally, in the medium term, this concentration may result in the loss of the brokerage firms of smaller size and, consequently, of the quality jobs they offer, » say MESSRS. Cusson and Gagnon. They invite them also brokers to take part in the consultation.

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