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The monitoring of advisers at the heart of the concerns of the CPOMA

by

Kate McCaffery

27 July, 2018 07:00

Erica Hiemstra

The supervision of counsellors continues to be an area of major interest for the canadian Association of insurance companies of persons (CLHIA).

In June 2017, the CLHIA has released a paper entitled » Improve the monitoring of advisors. It recommends that the independent advisors choose one firm of primary distribution. It would be then to ensure their monitoring under a plan for regulatory approvals.

«The implementation of such a change would be a longer-term goal,» explains the assistant vice-president, distribution, of the CPOMA, Erica Hiemstra. We believe that the industry stakeholders are ready to make positive changes in areas such as the competence of advisors and the awareness of their compliance obligations related to the customer. «

The document mentions, inter alia, that the regulatory structure and supervisory obligations current, reminiscent of a time when most insurers sold their products through a sales force of career traditional. Although insurers have surveillance systems for any irregularities that may be committed by advisors, the supervision exercised by each insurer is limited to folders that are placed with this insurer in particular.

This makes it difficult to detect irregularities capable of cheated insurers (such as multiply operations, commonly referred to as » churning «). In contrast, the agent-general is well placed to monitor this kind of irregularity, according to the CLHIA.

If it is decided that it will be the responsibility of the offices of distribution to perform certain monitoring functions, the CLHIA is hoped thatAPEXA will become a standardized tool for monitoring the activities of advisers. APEXA is an online tool for selecting, contracting and compliance at the service advisors.

In addition to examining the oversight of the advisers, the Association is currently working on the disclosure of the cost of the segregated fund. It recommends that regulatory authorities and providers in insurance and mutual fund are collaborating in the implementation of a mode of disclosure of the costs detailed for the consumer.

Erica Hiemstra indicates that councillors will note that the incentive programs focusing on travel are in the process of being abolished. «The insurers voluntarily accept the recommendation that it is necessary to change the game to manage the perception that there may be a conflict of interest when the advisors recommend certain products to their customers,» she said.

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