After consulting with more than 500 advisors, the Canadian Life and Health Insurance Association is making a number of changes to its G19 guideline pertaining to compensation disclosure in group benefits and group retirement services.

The proposed guideline, which was introduced nearly a year ago, would require insurers to disclose to plan sponsors the compensation paid to intermediaries for group benefits and retirement services. During its consultation, the CLHIA found that issues around the timing of implementation differed for group retirement and group benefits services, and determined it needs more time to ensure a successful roll out of the guideline.

Read: Compensation disclosure guideline making waves in benefits, retirement market

Those providing group retirement services will be required to disclose compensation for new sales from July 1, 2019, six months later than was previously suggested. Annual compensation disclosure in group retirement services would still begin in 2020.

As well, the timeline hasn’t changed for group benefits services, with the CLHIA proposing the disclosure of direct compensation for new sales will be required beginning Jan. 1, 2020, and renewal compensation disclosure will begin in 2021.

For direct compensation, the CLHIA is proposing the disclosure of the percentage and dollar value, including dollar values and lump-sum payments such as stay or transfer bonuses.

For indirect compensation, dollar or percentage values won’t be required, but the CLHIA is proposing that an advisor be required to disclose their eligibility for or participation in indirect compensation. It noted it will share proposed language around standard disclosure with the G19 advisory group.

Read: CLHIA announces tweaks to advisor compensation disclosure guideline

For in-kind compensation, disclosure of the total dollar value will be required when it’s more than $5,000 per advisor, per year. Contextual information will also be disclosed; for example, if an insurer and advisor had a financing arrangement, such as advances on commissions or loans, disclosure would be required if it exceeded $5,000.

“Our industry appreciates the commitment and assistance of the group advisor community in helping us develop an approach to compensation disclosure that works for all stakeholders,” said Stephen Frank, president and chief executive officer of the CLHIA, in a press release. “We remain committed to working closely with advisors to ensure that the industry is treating customers fairly and delivering the best suite of products and services at a fair price.”

The CLHIA notes that in the coming weeks it will revise the guideline and afterwards engage further with its advisor group on implementation details.

Read: CLHIA launches cross-Canada sessions about compensation disclosure guideline

Copyright © 2018 Transcontinental Media G.P. Originally published on benefitscanada.com
See all comments Recent Comments

Dave Patriarche:

So sad to see the CLHIA going further down the road in this flawed, ill thought out, reactionary, non-stakeholder discussed, conflict of interest generating, non-regulatory supported guideline.

This recent change now allows the “hiding” of bonuses, allowing some firms to not fully disclose while others are required to creating further conflicts of interest.

Wednesday, November 21 at 12:15 pm | Reply

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