Members' Forum Synopsis 1999
Once again, the Members' Forums offered RIBO council and staff an excellent opportunity to meet with brokers across the province. The structure of the questions this year allowed for an open forum discussion at each of the ten locations. The following synopsis under each topic sets out some of the points of view expressed.
A complete set of all the minutes is available for anyone
upon request.
MARKETPLACE ISSUES
Sole Occupation & the Sale of
Financial Products
Questions:
What would be the effect on your operations if the current requirements were removed?
Is the current exemption policy for "other financial products
& services" sufficient?
General Consensus:
Insurance brokers should be able to sell financial products.
If the sole occupation requirement is removed altogether, concern was raised that there could be a conflict of interest and/or undue influence placed on the consumer.
Sample Comments
- It would be nice to be able to provide all financial services to my clients within one office. This way we wouldn't risk losing our customers to the competition.
- RIBO has to recognize changes in the marketplace. If we don't move with the times we risk losing our business all together.
- One person doesn't have to sell all products or wear all
the hats. I want to be able to hire professionals who sell
a variety of financial products and services. Let me decide what products I want to sell.
- If we maintain the status quo we will lose out in the end.
- We can't be all things to all people.
- If we open it up, the consumer will be the loser in the end.
Brokers will be required to wear too many hats.
- If we remove the restrictions we risk losing our
professionalism.
- We can't open it up and then say to the banks we can
sell your products but you can't sell ours.
Ownership
Question:
What would be the effect on your operations if the current requirements were removed?
General Consensus:
The current requirement should be removed. As long as there is a Principal Broker responsible for RIBO requirements, then ownership should not be an issue.
Sample Comments
- As long as my business is being run properly, why does RIBO care who is the majority owner?
- We have to be able to compete. In order to compete
we need capital.
- Brokers are already getting around the current regulations. Why not open it up so we don't have to spend our time finding ways to break the rules?
- We have to stop trying to protect ourselves from the inevitable. If the regulation is removed, the marketplace will sort out who can and can't survive.
- I want to be able to compete on a level playing field.
- The loopholes should be tightened up. We have to
maintain this regulation. If it disappears we risk losing
our professionalism.
- I worry that if a firm is not majority owned by a broker that there will be undue influence and the consumer will not be protected.
Market Conduct
RIBO's Market Practice Guidelines
Question:
Are RIBO's current market practice guidelines helpful, adequate or too restrictive in any area? Do you have additional suggestions?
General Consensus:
There was no general consensus regarding market practice guidelines. Brokers were asked to forward any feedback to RIBO.
Sample Comments
- We get slapped on the wrist for doing the same thing
that other insurance distributors are getting away with.
- It's very frustrating to know that we don't all work on a level playing field.
- If we start to give away a toaster with the sale of every insurance product, we cheapen ourselves and risk losing
our professional image.
- The consumer has to recognize that someone is paying
for any giveaway.
- We have created a world were customers want giveaways and inducements. Unfortunately, this type of business
practice is a reality. We have to move with the times.
FSCO's Discussion Paper on
Market Conduct
Question:
Are there any areas that ought to be included in FSCO's upcoming discussion paper on market conduct and practices?
General Consensus:
RIBO should continue to address the issue of market conduct
and practices with FSCO.
Sample Comments
- There seems to be different rules governing market
practices for different sectors of the insurance industry. Until the playing field is leveled we will lose out.
- The insurance industry is not competing on a level playing field. FSCO needs to regulate its members in the same way that brokers are regulated.
- RIBO should work with FSCO to establish one set of
rules and regulation when it comes to market conduct
and practices.
Marketplace Changes
Question:
What marketplace change, if any, is having the biggest
effect on your operations?
General Consensus:
RIBO must continue to work with FSCO to develop
new guidelines concerning "Group" plans.
Sample Comments
- What constitutes a "Group"? If you are an air breather
who lives in Ontario, you are considered a "Group".
Consumer Protection Initiatives
Market Capacity Disclosure
FSCO is currently examining substantive changes in consumer protection issues affecting all intermediaries in insurance
distribution.
Question:
What has been the effect, if any, on the recent changes in
market capacity disclosure (auto) on your operations?
General Consensus:
There is no objection to market capacity disclosure.
However, there are issues regarding the practicality.
Sample Comments
- Market capacity disclosure is really a non-issue.
As independent licensed business people we should be
trusted to do what's right for the consumer.
- What if you represent 50 companies? Do you spend 10 minutes disclosing your markets before providing a quote?
- There are lots of realistic ways of disclosing your markets without having to list them over the telephone.
- Is market capacity disclosure really helping to protect the consumer?
Further Point of Sale Disclosure
Question:
What would be the effect of further point of sale disclosure requirements in other areas?
General Consensus:
Majority agreed that the consumers are bombarded with too much information when purchasing insurance. Further point of sale disclosure could lead to more confusion.
Sample Comments
- The consumer doesn't need us to be disclosing every part
of our business. We risk scaring them away.
- My commission is no one's business other than my own.
- Where will it end? We are all independent business people who need to make these sort of decisions for ourselves.
EDUCATION, QUALIFICATION & LICENSING
Common Entry Level Exam
FSCO is currently looking at qualification and licensing issues
for all insurance intermediaries, including harmonization within Ontario and across Canada.
FSCO may consider a common examination testing basic knowledge of "financial services" for all intermediaries, including insurance brokers. Once passed, individuals would then be required to write examinations on their specialized areas (i.e. the RIBO exam).
Question:
How would you feel about this type of examination process?
General Consensus:
Another exam would deter people from entering into the insurance industry. The qualifications as they stand are fair. RIBO should use the continuing education program as a means of helping to maintain high professional standards.
Sample Comments
- We have to raise the bar and step licensing is one way of doing this. Let's give everyone a broad idea of the financial sector and then let him or her decide if they want to apply to be a broker.
- We need to set higher qualification standards.
- Another exam would only scare people away from getting into our business.
- The process works as it stands. Why rock the boat?
- The RIBO exam is hard enough. RIBO should spend their time making sure that the CE courses are worthwhile.
- Writing and passing several exams doesn't mean you will be a good broker. There are other measures of success.
