Insurance regulators committed to greater collaboration

first_img Insurance regulators are broadening their horizons, and stepping up their efforts to work together, to uncover and resolve emerging industry conduct issues. A new paper published by the Canadian Council of Insurance Regulators (CCIR) spells out how the various provincial insurance regulators are increasing information sharing and supervisory co-operation. Facebook LinkedIn Twitter OSFI previews new capital rules for seg fund risk Insurance regulators consult on conduct principles Related news James Langton Share this article and your comments with peers on social media Keywords Insurance regulationsCompanies Canadian Council of Insurance Regulators FSRA reviews 57 life agent reporting forms The Framework for Co-operative Market Conduct Supervision in Canada follows an agreement signed by the four major jurisdictions (British Columbia, Alberta, Ontario and Quebec) back in June to enable greater co-operation in overseeing insurance companies that are active in more than one province. See: Insurance regulators sign MOU to share industry conduct information The CCIR paper outlines the processes that the regulators will follow in developing annual plans for co-operative supervision; collecting data on market conduct issues; how they will carry out both industry-wide and company-specific reviews; and, how they intend to coordinate regulatory responses. This increased information sharing and collaboration is expected to improve consumer protection and the regulation of the insurance industry by making better use of regulatory resources, doing a better job of uncovering market conduct issues, and enabling regulators to be more proactive in responding to the issues they do find, the CCIR paper says. “This Co-operative Framework reflects the evolution of market conduct supervision,” the CCIR paper says. “This evolution has been brought about both through increasing expectations by consumers around the protection they receive, and through a heightened awareness of its importance to the stability of the financial system of proactively protecting consumers from unfair or abusive business practices.” The CCIR paper notes that annual supervisory plans developed by the regulators, setting out their priorities for addressing market conduct risk “will represent the cornerstone for coordinated regulatory activity” under the new co-operative framework. Co-operative reviews will be used to give regulators “a more informed understanding of the market conduct risks and the conduct of regulated entities,” the CCIR paper says. This will include both company-specific reviews, and also market-wide reviews designed to deal with emerging market conduct issues. “The areas of focus for thematic reviews may include the sale of certain types of insurance products and particular distribution models and methods,” the CCIR paper says. “It is important to look beyond individual entities as risks are often industry wide,” the CCIR paper notes. To that end, the CCIR is planning to collect and analyze data “to help identify and prioritize market conduct risks, underlying trends within the sector and areas requiring coordinated supervisory focus.” Additionally, the regulators intend to use complaints, investigations, and individual issue reviews, to provide them with information on trends and patterns outside of their particular jurisdiction. This new increasingly-collaborative approach to supervision aims to be both “robust and effective”, the CCIR paper notes, without imposing an undue burden on the industry. It also does not change firms’ regulatory obligations. “The Co-operative Framework clarifies how the members of the CCIR will work together on market conduct issues across provinces and territories,” said Patrick Déry, CCIR chairman, in a statement. “It describes the kind of information we will share with each other and how that information will be used by the regulators and CCIR collectively.” “The collaborative approach to planning, market analysis, and entity specific supervision and thematic reviews will not only improve consumer protection, but align the regulatory model in Canada with international standards and best practices,” Déry added.last_img read more