To mark the conclusion of the parliamentary committee's review of Bill 141, the Regroupement des cabinets de courtage d’assurance du Québec (RCCAQ) reiterates the need to protect consumers' financial well-being by requiring the involvement of a certified representative during the purchase process for all types of insurance policies. The RCCAQ ultimately seeks to avoid disastrous consequences for consumers, particularly when filing claims after an incident.

Yes to the "one stop shop"; no to online sales without professional involvement

With respect to the various proposals concerning Bill 141, the RCCAQ welcomes the plan to end the dual regulatory system for the insurance sector and to make the Autorité des marchés financiers (AMF) a "one stop shop" for consumers and the industry. However, the RCCAQ would also like to point out that permitting insurance sales online remains a key issue and carries major risks for consumers, particularly during the claims process.

Modernization and consumer protection should go hand in hand

The RCCAQ reiterates the importance of modernizing the legislative framework governing the distribution of insurance products. We must, however, speak out against the fact that this modernization will have a negative impact on consumers.
Due to technological advances and changes to insurance products since Quebec's Act respecting the distribution of financial products and services was adopted nearly 20 years ago, a legislative review is urgently required. The context in which brokers operate has changed over time and the regulatory framework should also be adapted to reflect that new reality.

However, the Internet is primarily a communication and information tool; it is not an effective medium for ensuring that clients are given sound advice. "Online insurance sales should be regulated to fill the current legal vacuum," said RCCAQ chair Christopher Johnson. "But that can only be achieved by proposing solutions that guarantee that consumers have the best possible protection by receiving professional advice from a certified representative."

Online insurance sales: consumers left to their own devices

If adopted in its current form, the Bill 141 would enable clients to purchase a home or auto insurance policy online without the involvement of an insurance representative, such as a broker. Unfortunately, this approach does not take into account the fact that insurance is not an everyday consumer product. Once a claim is filed, coverage cannot be modified; by then, it is too late.

"The insurance field is complex. In addition to coverage amounts, insurance policies contain exclusions and limits that we need to be very familiar with to ensure adequate coverage. In that regard, insurance brokers are well aware that their advisory role is essential when it comes to safeguarding their clients' financial interests," said Mr. Johnson. "The biggest danger with online insurance sales is that consumers will think their coverage is adequate until an incident occurs. Then when they submit a claim, they will find themselves solely responsible. The consequences could be catastrophic."

As a professional association, the RCCAQ believes that a certified representative should be involved in the purchase process for all insurance policies, regardless of how the product is distributed, i.e. online or in any other manner.