{"id":1286,"date":"2024-02-12T04:24:57","date_gmt":"2024-02-12T04:24:57","guid":{"rendered":"https:\/\/financeify.ca\/?p=1286"},"modified":"2024-02-12T04:24:57","modified_gmt":"2024-02-12T04:24:57","slug":"the-new-guidelines-concern-unfair-incentive-practices-in-insurance","status":"publish","type":"post","link":"https:\/\/financeify.ca\/index.php\/2024\/02\/12\/the-new-guidelines-concern-unfair-incentive-practices-in-insurance\/","title":{"rendered":"The new guidelines concern unfair incentive practices in insurance"},"content":{"rendered":"

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Following the decision to eliminate separate deferred sales funds due to consumer protection concerns, insurance regulators are now proposing guidance on the design of compensation structures that ensure fair treatment of customers.<\/p>\n

The Canadian Council of Insurance Regulators (CCIR) and the Canadian Insurance Services Regulatory Organization (CISRO) have proposed guidelines for the design of incentive arrangements in the insurance sector.<\/p>\n

The proposed guidelines, which are not subject to public comment, aim to bring industry compensation structures in line with the principles set out in the existing Fair Treatment of Customers guidelines adopted in 2018.<\/p>\n

The industry has since requested further guidance on the application of fair treatment from regulators to incentive structures. Regulators concluded that some existing industry practices “may pose risks to the fair treatment of customers and that there is insufficient evidence that these risks are adequately managed.”<\/p>\n

As a result, regulators have developed proposed guidance that is “principles-based and provides insurers and intermediaries with the freedom necessary to develop strategies, policies and controls that support fair customer outcomes based on the nature, size and complexity of their business activities,” regulators say.<\/p>\n

Types of incentives that may be of concern include “excessive” cross-selling incentives, commissions tied to premium level\/total investment value, arrangements that create exit fees\/penalties for customers, and bonus rates that increase with sales volume, among others guidelines said.<\/p>\n

\u201cInsurance intermediaries play an important role in the fair treatment of insurance customers,\u201d said \u00c9ric Jacob, president of CISRO, in a statement.<\/p>\n

\u201cWhile insurance intermediaries are compensated for the services they provide, the proposed guidelines will help ensure claims risks are properly managed.\u201d<\/p>\n

Comments can be made on the proposed guidelines until April 4.<\/p>\n

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Following the decision to eliminate separate deferred sales funds due to consumer protection concerns, insurance regulators are now proposing guidance on the design of compensation structures that ensure fair treatment of customers. The Canadian Council of Insurance Regulators (CCIR) and the Canadian Insurance Services Regulatory Organization (CISRO) have proposed guidelines for the design of incentive […]<\/p>\n","protected":false},"author":1,"featured_media":1287,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[18],"tags":[682,573,683,32,684,650],"class_list":{"0":"post-1286","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-seg-fund-investments","8":"tag-concern","9":"tag-guidelines","10":"tag-incentive","11":"tag-insurance","12":"tag-practices","13":"tag-unfair"},"aioseo_notices":[],"yoast_head":"\nThe new guidelines concern unfair incentive practices in insurance - Financeify<\/title>\n<meta name=\"description\" content=\"Following the decision to eliminate separate deferred sales funds due to consumer protection concerns, insurance regulators are now proposing guidance on\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/financeify.ca\/index.php\/2024\/02\/12\/the-new-guidelines-concern-unfair-incentive-practices-in-insurance\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"The new guidelines concern unfair incentive practices in insurance - 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