In late January the General Insurance Council of Manitoba announced it was examining the policy of on-site supervision of ‘Level 1′ and ‘Auto Only’ general insurance agents. It was a standard announcement (changes are pending until stakeholders have had a chance to comment); however, it suggested that the licensing of agents across Canada could be–and should be–examined.
In Manitoba’s case, the push for policy changes was prompted by technology. Senior licencees were increasingly accessible through cellphones and email, which diminishes the need for on-site supervision. Yet, another reason to examine and change the policies of specific licences is competition.
As federal and provincial governments continue to push for a domestic market with few trade and labour barriers–often through interprovincial agreements, such as the B.C. and Alberta Trade, Investment and Labour Mobility Agreement (TIMLA)–it may become essential for distribution channels to examine how they operate and whether or not this is sustainable given the economy and the political will present today.
For instance, last year Ginny Bannerman, CEO of the Insurance Brokers Association of Alberta (IBAA), aptly pointed out that TIMLA would skew the competitive playing field. A simplified explanation of her concerns is that TIMLA enables B.C.-based brokerages and agencies to compete in the private market of Alberta, but hinders Alberta-based brokers/agents when competing in the government-dominated market of B.C.
If the primary concern of various provincial governments is the fostering of competition, then perhaps the easiest way around these over-generalized trade and labour agreements is to provide a reason as to why the insurance sector is exempt.
A national licence–enabling brokers/agents and corporations to conduct business across Canada–would be a strong reason for this exemption.
If we can prove to various levels of government that we are effectively fostering a competitive sector–with labour mobility at the top of the list–then there is no reason for these same governments to include the insurance sector in binding agreements.
While a national licence may seem like an onerous procedural burden or the loss of much-needed provincial revenue, we need to consider the bigger picture. And that picture includes a decade or more of free trade pursuits by our various levels of government. Remove the underlying need for this type of legislation and the legislation–and all its implications–should also disappear, or at the very least exclude the insurance sector.
Originally appeared in Canadian Insurance Business Magazine, March 8, 2010