In response to concerns raised by advisors, the Canadian Life and Health Insurance Association announced May 31 that it is making a number of changes to its approach towards Guideline G19, Compensation Disclosure in Group Benefits and Group Retirement Services.
When the guideline was first released in January, it drew criticism from some advisors who felt they had been left out of the original discussions that led to G19 and that they were being taken out of the loop by insurers who intended to go directly to plan sponsors to disclose advisors’ compensation. In response to this reaction, the CLHIA held a cross-country tour to meet with advisors to explain the guideline and gather feedback.
Advisors should be able to deliver disclosure
The CLHIA now says it is making the following changes to G19: “Considering the relationship between the advisor and the end client, the CLHIA agrees with advisors that they should have the ability to deliver the disclosure to the client.”
It also says “a reasonable and appropriate materiality threshold will be established for tracking and disclosing in-kind compensation, with input from advisors.”
In addition, the CLHIA is delaying the implementation timeline for group benefits by one year to start Jan. 1, 2020, “to allow sufficient time to address advisors’ concerns.” For group retirement services, disclosure for new contracts will remain Jan. 1, 2019.
Fair outcomes for all stakeholders
“We are pleased that so many in the group advisor community have taken such a keen interest in G19 and I am confident that the insurers and advisors can continue to partner together in the best interest of consumers,” states CLHIA President and CEO Stephen Frank. “Our ultimate goal is to ensure fair outcomes for all stakeholders” he adds.
The CLHIA says the next step in this process will be an in-depth consultation on G19 through an Advisory Group with participation by both advisors and insurers. “We are looking forward to working very closely with advisors in this next phase to ensure that advisors’ concerns are taken into account and that the process for compensation disclosure to plan sponsors works well for all stakeholders,” says Frank.