The Canadian Life and Health Insurance Association is withdrawing guideline G19 on advisor compensation for group benefits and retirement services.
“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 chief executive officer, in a press release. “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 withdrawal was effective May 31. As a result of the change, any measures related to group retirement services sales, which were set to start for new contracts on July 1, 2019, and annual disclosure for existing contracts, set for Jan. 1, 2020, won’t go ahead as planned.
“I’m extremely pleased they put a stop to it,” says Dave Patriarche, president of Mainstay Insurance Brokerage Inc. “Overall, I am pro disclosure and every advisor should be adding value to their relationship and should be disclosing, but I think it’s not something CLHIA should’ve been doing.”
One great outcome from all of this, he adds, is that it’s bonded group benefits and retirement advisors a little more tightly than before. “This was a great catalyst to unify the group benefits and retirement advisors. Thanks to all the associations and their members for coming together on this issue. Everybody thinks we’ve been fighting this because we’re against disclosure and that’s not the case. I am for the idea of G19 and disclosure, [but] the insurance companies are not the ones to do it.”
The CLHIA said it’s still committed to disclosure in the industry. “We value the role advisors play in the life and health insurance marketplace,” noted the release. “The participation of all stakeholders is key to the successful development and implementation of conflict of interest management practices for group products and services.”