CLHIA comments on CCIR's Strategic Plan 2014-2017Release Date: 02/13/2014 Staff Reference: Leslie Byrnes
February 13, 2014
Canadian Council of Insurance Regulators
5160 Yonge Street, P.O. Box 85
Toronto, ON M2N 6L9
Dear Ms. Rogers:
CCIR Strategic Plan 2014-2017
We appreciate very much the opportunity to provide additional comments on CCIR's Strategic Plan 2014-2017, as a supplement to the discussions we had at the stakeholder meetings last October.
To begin, we agree with your assessment that the new plan will need to take into account the changing regulatory environment, including ICPs, IFRS, as well as product and technological changes.
We expect the industry to face a variety of challenges during the period of the Strategic Plan, such as those we raised in our dialogue in October 2013 -- IFRS issues, global capital issues, tax issues, as well as challenges to our underwriting system regarding the use of genetic testing information.
In the context of International initiatives and their possible impact in Canada, we concur with the Canadian Authorities' response at page 41 of the IMF Report on the Observance of Standards and Codes, in reference to the introduction of ICPs dealing with market conduct issues. They state as follows: "As the ICPs and assessment techniques evolve, it will be important to balance consideration of process with consideration of outcomes achieved. Past experience has not demonstrated a history of significant unaddressed market conduct problems in Canada". The focus on outcomes, by both individual regulators and by CCIR, will be essential during the period of the Strategic Plan.
Staying with international matters, at page 60 of the same Report, in the context of the securities sector, the IMF urged relevant authorities and governments to work together to ensure a level playing field in the distribution of all investment products. In this regard, it drew particular attention to the need to more closely monitor the obligations associated with segregated funds. Segregated funds fall clearly within the purvue of CCIR and it will be important to ensure that this continues to be the case.
Another matter that will be relevant in the coming years is CCIR's continuing efforts to be as informed as possible regarding significant developments in the industry. In this regard, as part of the proposal that we will be sending you very shortly, we see an augmented role for CLHIA going forward in providing information to you about new developments that have an industry-wide impact.
With respect to specific initiatives that CCIR should continue or undertake, please consider the following. First, with regard to complaints analysis as a risk-based regulatory tool, the National Complaints Reporting System has been in place for several years now and it would be timely to review it to see if it is capturing information in a way that continues to be useful and actionable. CLHIA had made specific suggestions several years ago to make the System more useful and would be pleased to provide additional information in this regard.
Second, with respect to the Life Licence Qualification Program (LLQP), CCIR should work with CISRO to ensure that significant changes to the LLQP do not have unintended consequences. CISRO has agreed that the new program should not raise the bar, increase costs and lengthen the amount of time it takes to complete the program. Nevertheless, the industry continues to have concerns about the appropriateness of new curriculum and the impact a modular structure may have.
A third specific matter relates to the Agent Database. CCIR is to be commended for its leadership in establishing the Canadian Insurance Regulators Disciplinary Actions (CIRDA) in December. CCIR should pursue opportunities to extend this initiative by encouraging and facilitating greater integration of regulatory data with the Canadian Insurance Participant Registry.
Thank you again for the opportunity to provide comments on CCIR's Strategic Plan.