The Canadian Council of Insurance Regulators published principals-based guidance on the treatment of customers. Topics covered include conflicts of interest, disclosure, outsourcing disputes and the provision of advice. Once finalized, regulators in each jurisdiction will need to determine if they wish to introduce new guidance or any other measures.
Overview of the Council’s Comments:
The council is supportive of the principals discussed in the notice. The fair treatment of customers should be a risk and principals-based regulation and technology neutral; customers should receive consistent, high quality financial advice regardless of the delivery channel. E.g. The sale of insurance products are often made by dually-licensed salespersons, which exacerbates potential conflicts in that the salesperson might be incentivized to sell the lesser-regulated product. In addition, there are a number of hybrid investment products currently in the market which combine features of both securities and insurance products, leading to investor confusion.