G19 Update

It's been a while since I sent out an update on the CLHIA's G19 initiative. During this time it has been anything but quiet, with some great work being done by a variety of industry associations, as well as some exceptional people working together, behind the scenes, on your behalf.

The info below is the first step in sharing some of the progress to date.  Following that is my personal ask from you TODAY!

G19 Update

It has been some time since we provided communication on the intermediary response to Canadian Life and Health Insurance Association (CLHIA) and Guideline 19 (G19).

G19 claims to establish industry standards for the disclosure of compensation for group retirement services and group benefits. The guideline would apply to all CLHIA member companies, regardless of the form of compensation paid or provided, or the distribution channel used, except G19 is not intended to apply to insurer direct selling models or captive agents.

Much work has been done over the past several months with a primary focus on mobilizing a group representative of independent intermediaries. We are pleased to announce that this has been accomplished. Together with Advocis, CALU, TPAAC and a closely held group of benefit advisory firms, we worked on advancing our perspective and opposing G19.

In addition to the formal collaboration of our group, we have hired a consultant to formulate a cohesive strategy and consistent messaging on our G19 opposition.

Our opposition to G19 is not to be confused with opposition to disclosure. This is about opposition to a stakeholder who has no regulatory or legislative mandate to impose an industry standard. We believe CLHIA is exerting its dominant position in the marketplace in a self-serving way to the detriment of other stakeholders – specifically the consumers.

Consumers would be better served by regulation that is transparent in its making and inclusive of the interests of all stakeholders, not by one participant.

We feel opposing CLHIA actions may be the single most important issue for all intermediaries in maintaining a healthy balance in the consumer ecosystem.

Here are specific points to bring you up to date:

? The intermediary benefits community has come together in an organized fashion. This will have collateral benefits well beyond G19, such as knowledge share around other important initiatives (e.g. National Pharmacare)

? We have hired professional assistance to help navigate the complexities of CLHIA’s overstep.

? There have been countless conference calls, briefs and meetings nationally to further these discussions both with our group as well as engaging CLHIA and regulators.

? A meeting was held in mid-March between both parties (intermediary lobby group and CLHIA) to discuss current positions and explore opportunities for a revisit. This meeting did not result in any movement from CLHIA.

? A letter was sent to CLHIA President Stephen Frank and CLHIA Chair, Mark Sylvia in April outlining our position.

? We have asked for a formal response to our letter before we take the next extraordinary steps of engaging regulatory bodies, the Competition Bureau, governments and the public.

The letter presented to CLHIA on April 8th summarized various issues where G19 has overreached and some brief comments are offered as follows:

? CLHIA is not a regulator and lacks the legislative authority to make rules.

? They have used their dominant position in the marketplace to create a self-serving guideline that will harm other stakeholders.

? The imbalance created by G19 is multifaceted – unfair competition, a market distortion and a dynamic that favours CLHIA constituents including direct sales and captive agents. Moreover, G19 could lead to less access for consumers and a disruption of independent advice channels.

? The imbalance will restrict competition and could harm some stakeholders by revealing competitive information not previously available publicly.

? The proposed G19 is not a guideline but a prescriptive set of rules that oversteps both long established International Insurance Core Principles (ICP’s) and contravenes guidance set by the Competition Bureau specific to the activities of trade associations like CLHIA. An argument can be made that CLHIA is abusing their dominant position with self-serving conduct that will undermine competitive market forces.

These points will form the foundation of our collective efforts to achieve a review of G19 and specifically the process of establishing rules of conduct for our industry going forward. Free flow of trade and an unbiased framework for competition is something we hold dear and that we must fight to preserve for all stakeholders, including consumer.

We hope this update has provided some insights on the progress we have made to bring together our collective voice and to elevate our opposition of CLHIA’s actions on this crucial consumer issue.

We will keep you informed as updates become available. This will include a future call to action as we hope to enlist your assistance as an independent intermediary as we collectively address this important issue.

What I'm going to ask of you today is to forward this to EVERY broker you know.  

Regardless of whether they work in group benefits or retirement products, this needs to go to everyone. If they sell life insurance, investment, living benefits, travel insurance...whatever, they need to be aware as this may be about GB and GRS today, but the goal seems to be for it to pertain to all areas of insurance.

Our next step will be to set up a site and have everyone register their e-mail on it to stay apprised of next steps. This will follow in the coming weeks. In the mean time I would suggest that if you are not a member of an industry group, that you join one immediately!

ADVOCIS and IFBC are both advocacy groups that represent their members needs in initiatives like this and are a good first step.

CGIB is an educational group that will help you to add value to your clients and practice if you are focussed on employee benefits.

If you have questions and are a CGIB member, please call me.  If you are a member of IFBC or ADVOCIS, please call them and ask where you can help. If you're not a member of any of them, please join one or more and then reach out and ask where you can make a contribution.

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