The Canadian Life and Health Insurance Association has announced the withdrawal of Guideline G19 on advisor compensation for group benefits and group retirement services. The guideline's withdrawal is effective today.
Still in favour of market transparency
"Following extensive discussions with market players, including advisors and their associations, and careful consideration of what we heard, we have decided to withdraw this industry guideline," said Stephen Frank, CLHIA's President and CEO in a statement. "Our industry is still strongly in favour of market transparency and plans to work closely with regulators and other stakeholders on these matters going forward."
The CLHIA says that as a result of the withdrawal, “measures related to group retirement services sales that were to begin for new contracts on July 1, 2019, and annual disclosure for existing contracts on January 1, 2020 will not proceed.”
Will not proceed
In addition, disclosure measures for group benefits sales, which were to begin on January 1, 2020 for new contracts and January 1, 2021 for existing contracts, will not proceed.
The CLHIA underlined that its member companies remain committed to disclosure. “We value the role advisors play in the life and health insurance marketplace. The participation of advisors and their associations is key to the successful development and implementation of conflict of interest management practices for group products and services.”
The right decision
Mike McCLenahan, president of the Third Party Administrators Association of Canada (TPAAC) and a member of a group that opposed the guideline, applauded the CLHIA for the move. “We feel it’s the right decision. It’s important that the industry does not see this as moving away from transparency or the topic of disclosure. We just felt like it’s not CLHIA’s responsibility to enforce it.”
He added that for now the group will take time to cool off. “Whatever the next steps look like, we see collaboration and co-creation with the CLHIA and regulators. There is a desire to still try and develop an industry approach to this.”