The Regroupement des cabinets de courtage d’assurance du Québec (RCCAQ) has reviewed the final version of the new Regulation respecting damage insurance brokerage, which was published today in the Gazette officielle du Québec and will take effect on December 13. We note that our representations have borne fruit and that a number of modifications have been made that will benefit damage insurance brokerage firms, as well as consumers.

"Quebec's finance ministry and the Autorité des marchés financiers (AMF) proved receptive to our views on several major aspects of the Regulation," said RCCAQ chair Sylvain Turgeon. "We had an opportunity to explain our key concerns regarding the impacts on our industry of certain proposed measures. The Regulation published today is a product of our effective collaboration and demonstrates our common interest in fostering the development of brokerage firms while protecting consumers."

Withdrawal of the "hybrid agency" model: a crucial decision for damage insurance brokers

As stated in its position paper and throughout its representations, the RCCAQ focused its efforts on demonstrating the negative impacts of the "hybrid agency" model, as originally proposed by the AMF. Given the adverse consequences for the brokerage industry in the future, as well as the risk of creating greater confusion in consumers' minds between insurance agencies and brokerage firms, the RCCAQ vigorously called for this model to be withdrawn.

In this regard, the RCCAQ welcomes the fact that the AMF was open to listening to the various arguments put forward and applauds its decision to reconsider its proposal and to submit a final version without the "hybrid agency" model.

Re-evaluation of disclosure requirements

The RCCAQ would like to take this opportunity to reiterate the fundamental importance that it attaches to protecting consumers and to the related role played by the disclosure requirements to which certified representatives are subject. Upon reviewing the first draft of the Regulation, the RCCAQ, along with the industry as a whole, issued a warning about major obstacles that would be posed by the proposed provisions in this regard.

Consequently, the RCCAQ advocated clearly for the withdrawal of the new disclosure requirements, reflecting its belief that the legislative and regulatory framework was sufficiently rigorous and comprehensive. In its final version, the AMF laid out a compromise that is acceptable to the RCCAQ, under which damage insurance brokers will be required to inform their clients of the relative percentage represented by each insurer, in addition to disclosing the names of any insurer for which the total risk placed represents 60% or more of the total risk volume, as currently required. It is important to note that this requirement is specifically aimed at the product categories set out in this same Regulation, including auto insurance and home insurance.

The RCCAQ now intends to continue assisting its members with putting this new requirement in place while providing them with adequate information on its implementation, in collaboration with the AMF.

Clarification on the "three insurers" requirement in the personal insurance line

The RCCAQ is aware that the measures that will be coming into effect will have an impact on how brokerage firms do business. However, we also know that the AMF has put together a dedicated team with a view to assisting brokers who may need help from time to time in complying with the new legislative and regulatory framework, particularly as regards their ability to offer three different insurers in the personal insurance line.

Needless to say, the RCCAQ will continue to take swift action during this transition period and, whenever necessary, will continue to defend the interests of brokerage firms that may encounter difficulties.

We are convinced that the new version of the Regulation more effectively fulfils the legal objective of clarifying the distinction between the agency and the brokerage firm models while enabling all firms to adapt to this new framework.

In pursuing its efforts, the RCCAQ will ensure that its members receive the necessary follow-up so that these new provisions are implemented within a framework designed to strike a genuine balance between protecting the public and fostering the development of the damage insurance brokerage industry.