The Financial Services Commission of Ontario (FSCO) says that Canadian insurance regulators have agreed to three best practice principles for managing conflicts of interest.
After public consultations, the Canadian Council of Insurance Regulators has agreed on three principles as best practices in managing actual or potential conflicts of interest.
The principles are designed to promote consumer confidence in the insurance industry by outlining best practices for managing these situations when they arise.
The principles are:
- that client’s interests come first, so agents must put the interests of policyholders and purchasers ahead of their own;
- consumers must receive disclosure of any actual or potential conflict of interest that is associated with a transaction or recommendation; and,
- products recommended must meet the needs of the consumer.
FSCO says that it plans to review the use of these principles by insurers, agents and brokers in the marketplace in 2007. “Protecting consumers is a key objective of the Financial Services Commission of Ontario. To ensure consumers are protected, conflicts of interest between insurers, agents and brokers must be managed effectively,” it says.