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Advisors -- Find G19 Information Here!

Release Date: 04/13/2018
Staff Reference: g19session

Update on G19
Earlier this year, the CLHIA embarked on its largest ever outreach to the advisor community to start a dialogue on Guideline G19, Compensation Disclosure in Group Benefits and Group Retirement Services. Our in-person meetings with advisors and the written submissions we received have provided us with extensive and constructive feedback from the group advisor community. We want to acknowledge the time and effort that so many of you put into your comments. Thank you.

Many of the comments we received touched on common themes, such as:

  • Fully involving advisors in the compensation disclosure process;
  • Providing effective and meaningful disclosure to contract holders, including a range of views on what compensation to disclose (i.e. direct, indirect and in-kind), how to present it (e.g., as a real dollar value, percentage, or both), and the contextual information that may be needed;
  • Ensuring that third party administrators and managing general agents are able to comply with the disclosure requirements under G19;
  • Providing for further dialogue with the advisor community on G19; and
  • Ensuring all stakeholders are given adequate time to adjust to G19.

We are now considering how we can adapt our approach going forward to ensure G19 leads to fair outcomes for all stakeholders. It will take some time to properly review all your helpful feedback and to complete our analysis of the various options. We ask for your patience as we work through these important issues. Once we have completed this work, we will re-engage with the advisor community -- likely in June -- through the now established G19 Advisory Group.

Are you an advisor ...
CLHIA has developed Guideline G19, Compensation Disclosure in Group Benefits and Group Retirement Services. G19 will require insurers to disclose to their contract holders on an annual basis all compensation paid to intermediaries.

Use these resources to find out more!

Why did CLHIA develop G19?

Both international and domestic market conduct regulatory activities are increasingly focused on managing conflict of interest risk, providing appropriate disclosures to customers, and treating customers fairly. The life and health insurance industry takes these principles seriously and we believe that:

  • The expectations of plan sponsors (contract holders), regulators and other stakeholders around compensation disclosure are changing.
  • G19 will strengthen the industry's practices around compensation disclosure and contribute to a customer-focused distribution system.
  • Transparency in group intermediary compensation disclosure contributes to ensuring fair and appropriate outcomes for plan sponsors.

A note on timing

We understand the need to allow for systems updates, practice changes and other aspects that are important to the advisor community. Therefore, we are phasing in the new standards over the next two years as follows:

  • For new sales: Anticipated compensation for new Group Retirement Services sales and new Group Benefits sales are to be disclosed to contract holders beginning January 1, 2019.
  • For renewal business: Ongoing compensation for all renewal business in Group Retirement Services and Group Benefits will be tracked beginning January 1, 2019, with disclosure to contract holders to begin on January 1, 2020.