20% Ownership of Insurance Brokerages is in Consumer’s Best Interest
Aviva urges the Government of Quebec to protect consumers
June 27, 2017 (Montreal, Quebec) – Aviva Canada is urging the Government of Quebec to maintain the 20% ownership limit of insurance brokerages by insurers in order to reduce the potential for any conflict of interest and to enhance consumer confidence in the insurance industry.
The 20% rule has enabled Quebec to create a robust and competitive insurance marketplace that offers widespread consumer choice and protection. Aviva maintains that a change to this rule would certainly reduce the number of insurers, impact the variety of products made available to consumers in Quebec and unduly increase premiums.
Aviva’s response to the Quebec consultation on rules limiting insurer ownership of insurance brokerages recommended the following three-point plan to ensure consumers in Quebec are protected and treated fairly:
- The 20% rule should be maintained as the ownership limit and further revised so that the ownership stake is calculated based on the total ownership by all affiliated or associated companies of a particular insurer.
- Brokers should be required to disclose to consumers at the time of quotation or renewal any factors that may influence the broker’s choice of insurer. This would include, for example, ownership, incentives, financing arrangements, percentages of the broker’s business placed with the insurer and the number of insurers canvassed before offering a quote.
- An intermediary that holds itself out as independent should be required to give a consumer quotes from at least three unaffiliated insurance companies so that the consumer has a real choice to make. Furthermore, business titles should adequately describe an intermediary’s independence. The distinction between agent and independent broker should be maintained.
Martin-Eric Tremblay, Senior Vice-President, Quebec Region, Aviva said,
“It is the responsibility of the Quebec government and the insurance industry to work together to ensure consumers are protected and treated fairly. The 20% ownership limit provision enables the Quebec government to achieve these objectives without hindering a robust and competitive insurance marketplace that offers widespread consumer choice and protection. “We are calling for laws and rules which maintain the 20% ownership limit as well as promoting fairness, transparency and confidence in the marketplace. A change to this rule could reduce the number of insurers, impact the variety of products made available to consumers in Quebec and unduly increase premiums.
“There seems to be a lack of consensus within the industry to maintain the 20 % property limit, as well as the distinction between brokers and agents in order to ensure transparency in terms of customer service.
“For the benefit of consumers, the distinction between brokers and agents must be clarified, respected by all and enforced by the appropriate authority.”
Notes to editors
- The Quebec Finance Department ran a public consultation regarding the rule that limits the ownership of insurance brokers to 20%, from April 18 - June 23, 2017.
- Consumers, industry and other stakeholders were invited to comment.
- Click here for more information on this consultation.
For more information:
Public Relations Specialist
Aviva Canada Inc.
Public Relations Consultant
Jonathan Goldbloom and Associates
About Aviva Canada
Aviva Canada Inc. is one of the leading property and casualty insurance groups in the country providing home, automobile, leisure/lifestyle and business insurance to 2.9 million customers. A wholly-owned subsidiary of UK-based Aviva plc, the company has more than 4,000 employees focused on creating a bright and sustainable future for their customers and communities.
Aviva Canada invests in positive change through the Aviva Community Fund, Canada’s longest running online community funding competition. Since its inception in 2009, the Aviva Community Fund has awarded $7.5 million to over 250 charities and community groups nationwide. Aviva Canada, bringing over 300 years of good thinking and insurance solutions to Canadians from coast-to-coast.