Insurance brokers concerned about consumer protection
QUEBEC CITY, Oct. 30, 2013 /CNW Telbec/ - The insurance brokerage profession is currently facing challenges related to consumer protection, changes in consumer behaviour and illegal business practices. These were the main issues raised during discussions at the Regroupement des cabinets de courtage d'assurance du Québec (RCCAQ) convention taking place this week in Quebec City.
Consumer protection at risk
Insurance is a complex product and consumers are encouraged to seek advice to ensure that their assets are adequately covered. It is now possible to purchase insurance policies online without the assistance of a certified representative at any time during the transaction. People who purchase a policy directly online can make mistakes when filling out their application, and it is only when making a claim that they find out that their coverage is inadequate. Brokers can help manage the risks related to property damage by advising customers, thereby playing a key role in protecting their property.
"The insurance market is changing. The problem is that new channels of distribution such as the Internet do not ensure that customers understand products in the same way as when dealing with a broker. Nor do they guarantee consumer protection through mechanisms established by the Autorité des marchés financiers (AMF)," said Jean Bilodeau, president of the RCCAQ.
Consumers: victims of illegal practices
The RCCAQ continues to work with the AMF to ensure that illegal business practices, particularly those involving automobile dealerships, are eliminated. Many dealers disparage the products offered by brokers, and also sell replacement insurance, which can be up to 66% more expensive than that sold by brokers—notably because this amount is added to the vehicle's financing, which can span up to six years. In addition, some dealers threaten to increase the interest rate for financing the vehicle if the customer does not purchase their replacement insurance.
In some instances, the dealers overstep their rights by undertaking activities exclusive to insurance brokers, such as collecting information with a view to obtaining a quote.
Tax harmonization: a considerable impact for brokerage firms
The RCCAQ wishes to acknowledge the work done by Finance Minister Nicolas Marceau to mitigate the impact of sales tax harmonization on brokerage firms. The RCCAQ would also like to reiterate that efforts to find a long-term solution beyond 2015 must continue. In other news, the RCCAQ also plans to be present for the consultations concerning amendments to Bill 188, which governs the distribution of financial products and services.
About the RCCAQ
The RCCAQ is a professional association that seeks to promote and defend the socioeconomic interests of its member firms. It represents 4,500 insurance brokers working in 615 firms and branch offices across Quebec.
SOURCE Regroupement des cabinets de courtage d'assurance du QuébecFor further information: