An executive of the Canadian Life and Health Insurance Association (CLHIA) says the industry association will continue working with advisors on “sensitive issues” brought about by a compensation disclosure guideline created for group benefit and group retirement services advisors.
Erica Hiemstra, assistant vice president, distribution at the CLHIA, told a meeting of the Canadian Group Insurance Brokers (CGIB) May 2 that the CLHIA has spent a lot of time collecting advisor input since the beginning of the year talking to advisors individually and in group meetings across the country. The CLHIA now recognizes the importance of talking with advisors and their comments, she added.
Taking stock of feedback
“We did get a lot of useful feedback … so much so that it is going to take us some time to take stock of all of that feedback,” Hiemstra told the advisors. “I fully appreciate that time is of the essence…but we need to take the time to get it right.”
Advisors were vocally angry when the guideline was first released without being able to provide their comments. Some said they felt they were being taken out of the loop by insurers who intended to reveal brokers’ compensations directly to plan sponsors rather than through the advisors themselves.
Advisors at the CGIB meeting also questioned why they have to make disclosures of their compensation when the insurance companies don’t say how well they profit.
Very strong points
“I would say that when it comes to insurers’ disclosures that’s certainly not what G19 was developed for,” Hiemstra said. “That said, there were very strong points made during the course of the roadshow and I think we better understand those now.”
But when asked outright whether insurers needed to disclose pooled claims, Hiemstra said she was not in a position to comment.
Under the guideline, direct compensation for these advisors needs to be disclosed beginning January 1, 2019. All compensation, including bonuses and sales trips, will be tracked starting the beginning of January 2019 and disclosure of this will be made beginning January 1, 2020.