Principles of Conduct
Principles of Conduct for Intermediaries
Canadian Insurance Services Regulatory Organizations (CISRO)
The CISRO Principles of Conduct for Intermediaries (the Principles) reflect common regulatory standards for insurance intermediaries in Canada. The Principles outline professional behaviour and conduct expectations for the fair treatment of Customers.
Intermediaries should conduct their business following the Principles that are relevant to them, while ensuring compliance with all applicable laws, regulations, rules or regulatory codes within their respective jurisdiction. Any stricter or more specific requirements, rules, or standards of conduct take priority over the Principles.
The Principles are intended to supplement, complement and build upon the intermediary elements in the Guidance on Conduct of Insurance Business and Fair Treatment of Customers (FTC), issued by CISRO and the Canadian Council of Insurance Regulators (CCIR). The Principles also align with the Insurance Core Principles (ICP) of the International Association of Insurance Supervisors (IAIS).
The Principles reinforce the fair treatment of Customers as a core component of the intermediary business culture. This includes conducting business in an honest and transparent manner. Expectations for the conduct of the insurance business may differ depending on the nature of the relationship to the Customer (whether it is direct or indirect), the type of insurance provided and the distribution method. Intermediaries with oversight responsibilities must ensure that their employees and representatives meet high standards of ethics and integrity.
Definition of Intermediary
Intermediary is given broad meaning, and will differ based on the applicable definitions within different jurisdictions across Canada. It encompasses adjusters, individual agents, brokers and representatives as well as business entities that distribute insurance products and services, including managing general agencies and third-party administrators. It also applies to all distribution methods, including the internet.
Definition of Customer
Customer refers to policyholder (which itself, as the case may be, includes a certificate holder) or prospective policyholder with whom an insurer or intermediary interacts, and includes, where relevant, other beneficiaries and claimants with a legitimate interest in the policy.
The Principles outline professional behaviour and conduct expectations for the fair treatment of Customers:
1. Compliance / Outcomes
Intermediaries must comply with all applicable laws, regulations, rules, and regulatory codes to which they are subject.
2. Customer’s Interests
Intermediaries must place Customers’ interests ahead of their own. This includes when an intermediary is developing, marketing, distributing, and servicing products.
3. Conflicts of Interest
Intermediaries must identify, disclose and manage any actual or potential conflict of interest that is associated with a transaction or recommendation. They must avoid entering into or pursuing agreements for which conflict(s) of interests cannot be managed, or if it interferes with the fair treatment of Customers.
If providing advice to or for a Customer, intermediaries must seek complete information from the Customer in order to understand and identify their unique needs. Intermediaries must provide objective, accurate, and thorough advice that enables Customers to make an informed decision. Advice must be suitable for the needs of the Customer based on the Customer’s disclosed circumstances.
Intermediaries must provide Customers with objective, complete, relevant, and accurate information and explanations so that they can make informed decisions. Intermediaries must:
- Properly disclose relevant information to all necessary parties; including the insurer; and
- Disclose information and explanations in a manner that is clear and understandable for Customers, regardless of the distribution or medium used.
6. Product and Service Promotion
Intermediaries must ensure that products and services are promoted in a clear and fair manner. Regardless of the distribution model or medium used, Intermediaries must ensure that promotions are not misleading, and are easily understandable. Product promotions must disclose all necessary and appropriate information.
7. Claims, Complaints Handling, and Dispute Resolution
Intermediaries must handle or assist in the handling of claims, complaints and disputes in a timely and fair manner.
8. Protection of Personal and Confidential Information
Intermediaries must take necessary and appropriate measures to protect personal and confidential information. They must:
- Only collect information that is necessary for the fulfillment of the service or product provided;
- Use and disclose the information only for purposes and for the duration for which the Customer has given consent; and
- Comply with all applicable privacy legislation to appropriately manage the information.
Intermediaries must maintain an appropriate level of professional knowledge to ensure the fair treatment of Customers. Continuing education requirements must be fulfilled and duties must match training education. Intermediaries must not misrepresent their level of competence or conduct business beyond their level of professional knowledge and experience.
Intermediaries with contractual or regulatory oversight obligations are also responsible for the conduct of any employee or third party involved in the distribution or servicing of an insurance product. Intermediaries have tools at their disposal such as policies and procedures, training and control mechanisms to ensure the fair treatment of Customers is achieved in relation to their oversight obligations.
Code of Conduct
Registered Insurance Brokers of Ontario
Registered insurance brokers offer independent advice and Property & Casualty (P&C) insurance products from a variety of companies. Brokers must be licensed by the Registered Insurance Brokers of Ontario (RIBO.) All RIBO licensees must carry an errors & omissions policy, as well as a fidelity bond, which is designed to provide customers coverage in the unlikely event that a broker mishandles their premiums. RIBO licensees are required to follow the RIBO Code of Conduct, which establishes rules and standards of professional conduct.
As a customer, you have the right to professional advice from a broker who is well informed about the products they are selling. You have the right to be treated with fairness and integrity.
- How Insurance Works: You have the right to be informed about how your insurance premiums are calculated. You have the right to access your policy and be clearly informed about the coverage and the claims settlement process.
- Broker Compensation: You have the right to ask how a broker is paid, the insurance companies they represent, and be informed about any potential conflicts of interest the broker may have. All RIBO licensed brokers must disclose commission information at the point of sale which outlines how they are paid.
- Understand Your Insurance Needs: You should consider your insurance needs and prepare relevant questions before you talk to a broker. Ask yourself if there have been changes in your personal or business life that could impact your insurance needs. Make sure you provide a detailed and accurate explanation of your circumstances to your broker so they can provide informed recommendations that meet your needs.
- Insurance Quotes: When obtaining a quote, your broker should always present the best value products available based on your current needs, and document why certain coverage and product options, including lower-cost options, may or may not be appropriate for you. Brokers are also expected to comply with the Take-All-Comers rule.
- Customer Obligations: You need to ensure that you know and understand your obligations under your insurance policy. For example, your policy will require you to provide updates to your broker and insurer regarding any material changes in your circumstances.
- Insurance Claims: If you need to file a claim, you have the right to be informed about the procedures and typical timelines for settling your claim, and you may inquire about the status of your claim throughout the process. If your claim is denied, you have the right to an explanation as to why it was denied. Your broker is your advocate as you work through your claim with the insurance company and will liaise as required.
- Making A Complaint: You can submit a complaint to RIBO if you believe your insurance broker failed to comply with the Registered Insurance Brokers Act, its regulations, or RIBO by-laws. File a complaint here.
- OmbudServices: In the event you have an insurance claim, your broker will provide you with information about the insurer’s claims process. For any unresolved disputes with an insurer, you may contact the insurer’s Ombudsman, who will attempt to resolve the conflict. If the conflict is not resolved, you will be referred to the General Insurance OmbudServices for P&C Insurance.