Updated Mandatory Disclosures Guidance

It has always been a requirement for brokers to disclose conflicts of interest such as insurer ownership to clients. Fair treatment of customers includes ensuring that the appropriate disclosure is made, so that customers can make informed decisions about purchasing or renewing an insurance policy. This is a broker’s duty.

To help brokers better understand and comply with this requirement, the Registered Insurance Brokers of Ontario (RIBO) is introducing the mandatory disclosures guidance (RIBO-002) to clarify and consolidate existing disclosure requirements for RIBO licensees.

The guidance was developed to:

• Incorporate the conflict-of-interest disclosure requirements found in Regulation 991, the Code of Conduct Handbook; and
• Clarify expectations that conflict disclosures should be made as soon as possible and no later than at the time of quote.

What has changed with the updated guidance?  

The primary change relates to the timing of when mandatory conflict of interest and commission disclosures must be provided to clients. RIBO has also updated its commission disclosure protocol, which can be found in the RIBO Code of Conduct to reflect this change.

RIBO expects disclosures to be provided as soon as possible and no later than at the time of quote. Licensees are expected to maintain written records of their communications with clients regarding disclosures.

Providing more upfront disclosure to clients will provide them with the opportunity to review and consider the quote, while being fully informed about any potential conflicts of interest their broker may have.

When will the updated guidance be enforced?

We have released the guidance well in advance, in April 2024, to provide licensees with sufficient lead time to incorporate the new requirements into their existing workflows.

Can I provide a link to the disclosure document(s) to comply with these requirements?  

Licensees must continue to maintain written records of their communications with every client, including explicitly disclosing conflicts of interest in writing.

We encourage licensees to review the disclosures with their customers and distribute the disclosures in ways they feel are most effective for their customers.

RIBO does not recommend any one method of directing the client’s attention to the disclosures, as each firm has unique workflows. However, one way of meeting this requirement would be to provide the disclosure document(s) via a link to a webpage and specifically drawing the customer’s attention to it. When doing so, licensees should also highlight the type of information that may be found in the disclosure document(s).

If asked, RIBO licensees should also be prepared to answer clients’ questions about the information that was disclosed.