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Letter Summary:
The paper is seeking input on the risks of arising from certain incentives paid to insurances firms, their representatives and other parties. The paper discusses the types of compensation structures used in the insurance industry and their varying potential for conflict of interest risk. The AMF assigns each compensation type a risk factor of high/medium/low. At the end of the paper, there are 17 questions requesting feedback.
Overview of the Council’s Comments:
The council is supportive of the AMF’s efforts to review potential conflicts of interest in the insurance space. Similar products, sold by dually licensed salespersons, creates the potential for regulatory arbitrage across the securities market and insurance market.
The CSA has already mandated a number of changes in the distribution of securities products and this proposal seeks more harmony across the two regulatory regimes.