The Autorité des marchés financiers says that new rules regarding the damage insurance industry will focus on disclosing ties between brokers and insurers.

Jean St-Gelais, the president and CEO of the Quebec financial services regulator, discussed the main regulatory measures that it plans to take at an investment and insurance convention in Montreal yesterday.

Addressing the Congrès de l’assurance et de l’investissement 2005, St-Gelais reported that the measures, which are currently at the drafting stage, will primarily focus on the disclosure to consumers of any ties between brokers and insurers.

Brokers will be required to provide clients with the name of any insurer that accounts for at least 60% of their business volume. Moreover, they will be required to disclose other types of relationships, such as ownership ties and loans. “The implementation of such a disclosure process is intended to help ensure that consumers can benefit from as much information as possible about the relationship between brokers and insurance product providers,” the AMF notes.

It also expects to issue guidelines regarding loans granted by insurers as well as the conditions and process that must be followed in connection with block transfers of clients from one insurer to another.

St-Gelais said that the solutions to be introduced by the AMF are fair for the industry, and that many were in fact based on industry recommendations put forth as part of the public consultation held in September. The implementation of these measures will take place in early 2006 in co-operation with the industry.

He also confirmed that a review of commercial practices in the personal insurance industry is still under way.