Advocis, The Financial Advisors Association of Canada, today voiced its concerns on the release of Principles of the Sale of Insurance by the government of Newfoundland and Labrador.
The association says that that Newfoundland and Labrador is the only province proceeding with commission disclosure. Advocis notes that insurance regulators across Canadian have reviewed commission disclosure and discounted its usefulness.
It adds that the only reason stated by the Newfoundland government for commission disclosure is to address concerns about conflicts of interests — no evidence of which has been found by Canadian insurance regulators in the life and health sector.
According to Advocis, commission disclosure does not in any way:
- provide meaningful information or protection to the consumer concerning the possibility of a conflict between the insurer and the intermediary;
- the relationship between advisor and insurer;
- the advisors’ previous transactions; or
- the relationship the advisor has with other insurers or the range of products offered.
Advocis says its Conflict of Interest Disclosure and Product Suitability tool provides comprehensive and meaningful disclosure, the kind that will allow the consumer to make an informed decision.
The tool requires the advisor to disclose, among other things: the insurers he or she represents and for what products; whether an advisor has an exclusive arrangement with an insurer; the products the advisor has recently sold.