Magazine article Risk Management

ORIMS Meets Leading Brokers of Toronto

Magazine article Risk Management

ORIMS Meets Leading Brokers of Toronto

Article excerpt

Recently, members of the Ontario Risk & Insurance Management Society and the Toronto Insurance Conference, an organization of brokers, met at the Board of Trade in Toronto to discuss several issues. Two topics, efforts to deregulate the financial services industry in Canada and the creation of a federal goods and services tax, topped the agenda.

Participants agreed that the federal government's delay in considering legislation to deregulate financial institutions and to permit or disallow them to venture into other product lines has created many problems and confusion. Banks, for example, had taken advantage of the situation by offering insurance products without licenses. However, Ottawa has since clarified the policy: Banks cannot sell insurance, but they may own insurance companies.

A main concern is that individuals and organizations be qualified to sell financial services and products to the public. At the same time, consumers should not lose the right to choose from whom they wish to purchase their services.

Financial institutions and broker associations across Canada have been actively pressuring local, provincial and federal governments to debate and act on possible legislation. Unfortunately, the federal government appears to be delaying legislation in view of the problems, as well as public reaction to other issues such as the tax on goods and services. Continued pressure on all levels of government should be exerted, maintained Toronto Insurance Conference members.

Situation in Quebec

Quebec, on the other hand, already has a fairly deregulated financial services marketplace. Conference members believe that Quebec acted a few years ago to set a precedence. The federal government, they said, will probably seriously consider Quebec's legislation prior to releasing its own.

Today, many financial institutions are engaged in personal insurance lines in Quebec, where they handle a large volume of business. As a trade-off, conference members explained based on remarks by Quebec's superintendent of market intermediaries, Alain Samson, the province allowed insurance brokers to acquire licenses to handle mortgage loans and sell specified financial instruments. However, conference members pointed out that most Quebec brokers have no desire to expand into these new areas, and their positions, particularly in rural areas, are in jeopardy. …

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