Ottawa brokers were treated to a political panel at the annual Ottawa Insurance Brokers Association Open House March 8^th at the Shaw Centre. Taking advantage of the proximity to the parliament buildings, esteemed guests from the three major political parties were invited to speak to brokers about the Bank Act. The panel was just one component of the event; delegates were also treated to a tradeshow and education throughout the day. Liberal MP Francesco Sorbara offered welcome remarks, highlighting the upcoming Federal Budget announcement March 22^nd.

LIBERALS RECOGNIZE ISSUE, WILL WORK TO MAINTAIN CURRENT LEGISLATION
Liberal MP Kyle J. Peterson was able to connect his role in government with the important role of insurance brokers, having worked with insurers and brokers on the legal defense side in his previous profession. “Banks selling insurance and lenders selling insurance is a concern,” he said, noting that current legislation ensures an even playing field for all parties. “I’ll do my best to maintain that in my role as a politician.”

Peterson had a message for brokers about advocacy: “Government can’t form policy without feedback from industry. You must be active at all levels; this is fundamental to the way government functions.” He continued: “It means more when the message is coming from a constituency member in my community than an association.”

CONSERVATIVES SUPPORT EVEN PLAYING FIELD, UNDERSTAND IMPORTANCE OF BROKERS
PC MP Ron Liepert praised the insurance industry for their work following the Fort McMurray fires in Alberta: “Politicians are the first to hear things when there’s a problem. I have never seen a response like that from any industry. I take my hat off to you.” Liepert was also able to draw a connection between brokers and their role in the community: “I play golf with my broker. It’s nice when you know who you’re dealing with,” acknowledging that insurance is designed to provide a service when you need something resolved, and seeking resolution with someone you know is the preferred experience. “When people have a problem, they like to know they’re dealing with someone who understands their situation.”

On the topic of the Bank Act, Liepert called it one of the most important parts of legislation in our country. “It’s important in trying times,” in reference to the 2008 economic crisis, “but it also strikes the right balance in our financial sector. We don’t want to stop business, but we do want to put people on an even playing field.” A call to action to brokers from Liepert: “Take an aggressive role to make sure your MP has heard your perspective. The modernization of technology will bring more challenges, and we are here to listen.”

NDP OPPOSES INSURANCE SOLD IN BANK BRANCHES
NDP MP Erin Weir was clear in his position on the Bank Act: “The NDP has been consistent in supporting prohibition of insurance being sold in branch at banks,” explaining their belief that insurance business should be kept at arm’s length. “We don’t want to reduce choice for consumers,” stating the fear that banks would monopolize the market if rules change.

INSURANCE BROKERS + THE BANK ACT
The Bank Act is the law that governs Canada’s major financial institutions. It’s of importance given that wealth management operations like banks and credit unions are allowed to own and operate insurance businesses, a power granted in the 90s when financial services legislation was reformed. However they’re prohibited from selling insurance at the time of granting credit, or within credit-granting branches (it must take place at a separate location).

There’s risk for policyholders when insurance carriers are owned by wealth management operations. Brokers advise clients on available products, offer coverage choice and shop the market for best-suited products, while banks and credit unions sell single products, and consumers approach them in times of vulnerability (i.e. when they’re applying for credit). It’s unfair to deal insurance at the same time credit’s applied for – prohibition protects consumers from cross-selling tactics that might lead individuals to accept/purchase a product that isn’t appropriate for their needs. Protection should remain as it currently stands in the Act, guarding consumers against coercion and undue influence.

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