Dear RCCAQ members:

Bill 150, which was introduced by the provincial government on October 31, has raised a number of questions and concerns—and rightly so.

The government's objective is laudable: it is seeking to clarify the respective roles of brokers and agents in dealings with consumers. However, the proposed solutions are inadequate and will put numerous brokerage firms at risk. Regardless of a brokerage's business model, the proposed changes clearly have application problems.

Following the RCCAQ's annual general meeting on November 15, we have listened to your concerns about the financial impacts of the government's proposals and your fears about the future of your business. We have also seen your determination to take strong and united action and to make your voices heard.

The time has come.

Building on the RCCAQ's efforts over the past few weeks to lobby the government, it is now time to take action as we show how united we are and make our voices heard.

Please ask your mna to combine certain provisions of bills 141 and 150

The section concerning us in Bill 150 focuses specifically on the definition of an insurance broker and the shareholding rules for brokerage firms. However, because this legislation is linked to the budget, it is being dealt with in parallel with the review of the Act respecting the distribution of financial products and services (Bill 141).

Our fear, therefore, is that Bill 150 will be adopted hastily and without consultation. In this regard, we are asking you to send your MNA a letter (by clicking here) requesting that Bill 150's provisions affecting brokerage firms be withdrawn and included in Bill 141, which deals with the general review of the Act respecting the distribution of financial products and services.

This same letter will also be an opportunity for us to ask our MNAs to convey our position on Bill 150 to the finance minister and to ensure that the final measures are applicable and effective.

Bill 150: defending brokers' role and brokerage firms' independence

Consistent with the RCCAQ's position paper submitted last June and based on the initiatives we have undertaken to date with the government and your feedback, here are the main issues that we will be defending on your behalf:

Number of insurers

The role of insurance brokers is to meet clients' needs by providing sound advice and offering products that are right for their situation. By requiring brokers to present each client with a choice of insurance products from at least four insurers per proposal, lawmakers risk passing legislation that is impractical insofar as it can only be applied on an exceptional basis.

We thus call on the provincial government to withdraw the four-insurer requirement and we propose to stipulate (in a regulation issued by the Autorité des marchés financiers) that each firm must have access to at least two different insurers (personal as well as commercial insurance). That way, consumers would have the assurance that their broker is able to offer them a real choice. In addition, the amendments to our professional oversight system would actually be feasible; if any adjustments proved necessary, only the regulation would need to be amended.

Similarly, we believe that the consumer disclosure principle should be reviewed, not only for brokers but also for insurance agents. Once the legislation has been adopted, this principle should ideally be addressed within the regulatory mechanisms.

Shareholders

In our view, the government's proposal concerning ownership limitations is a step backwards. For that reason, the new provisions should be withdrawn and steps should be taken to enforce the existing legislation and regulations (under which a financial institution's interest in a brokerage firm cannot exceed 20% of the voting shares and 50% of the participating but non-voting shares).

At the same time, we will continue to emphasize the importance of implementing independence tests within the regulatory framework with a view to keeping control of brokerage firms in brokers' hands and offsetting the risk of insurance company influence.

Bill 141: the rccaq will address the parliamentary committee

As you know, the RCCAQ has been working for over two years on the proposal to modernize and to review the Act respecting financial products and services. We have had various opportunities to make our positions clear on online insurance sales and the oversight system for certified representatives.
Following the introduction of Bill 141 in October, the RCCAQ will be pursuing its lobbying efforts by addressing the parliamentary committee on December 7.

For that reason, our goal of moving the proposed changes in Bill 150 (concerning definitions and ownership rights) into Bill 141, which will soon be taken up by the parliamentary committee, is especially relevant.

Both of these pieces of legislation will have major impacts for all brokerage firms. We strongly believe that these impacts should be studied carefully in order to ensure that our profession has an effective oversight system and that consumers remain protected.

This battle is not our first together, but it is crucially important as it marks a turning point in the history of our industry. We must remain strong, credible and united.

Write to your MNA.

Christopher Johnson
RCCAQ Chair