By Richard Giroux
Sometimes, brokers may not be able to communicate directly with potential clients. For example, parents may contact you for information that actually pertains to an insurable asset belonging to their children.
In your role as broker, you must deal directly with the potential client.
Annotated Code of ethics.
CHAD's Code of ethics for insurance representatives refers specifically to this point:
Division VII, section 37, paragraph 3
"The fact that a damage insurance representative acts contrary to the honour and dignity of the profession constitutes a breach of the Code of ethics, including:
[…]
3° taking into account the intervention of a third party that could affect the carrying out of his professional duties to the detriment of his client or the insured;
[…]
The representative must deal directly with the potential client to determine his actual needs and situation. In so doing, he will avoid misunderstandings or non-compliance with the spirit of section 27 of the Act.
Furthermore, throughout his mandate, the representative must ensure that he avoids allowing a third party to interfere with his client’s file. Examples of such interference include: a father who “steps in” in an effort to find his child the best automobile insurance; a creditor who interferes with an owner’s application for insurance; a brother-in-law who tries to help an insured with his claim, etc. The representative should not allow his actions and advice to be influenced by such third parties. The representative must obtain his information and instructions directly from the client.
Third party intervention may create a conflict of interest. See also sections 10 and 19 of the Code." http://docs.chad.ca/SiteCollectionDocuments/outil-code%20of%20ethics-representatives-an.pdf
Therefore, as a preventive measure, in similar cases, you are advised to ask your clients to provide you with a proxy letter. You can download a template here.
If you have any questions in this regard, please feel free to contact me!
*Act respecting the distribution of financial products and services, Section 27:
"Insurance representatives must inquire into their clients’ situation to assess their needs."
