Chair, Canadian Council of Insurance Regulators (CCIR)

14 December 2015

Mr. Patrick Déryc/o

Chair, Canadian Council of Insurance Regulators (CCIR)

5160 Yonge St., P.O. Box 85

Toronto, ON, M2N 6L9

Canadian Association of Direct Relationship Insurers (CADRI)

Submission on proposed “Harmonized Annual Statement on Market Conduct”

CADRI is a trade association representing insurance companies who offer automobile, home and commercial insurance products to Canadians on a direct basis. Whether through the web, on the phone or face-to-face, CADRI members provide end-to-end service and are in direct relationships with their customers through all steps of the sales and service process.

CADRI appreciates the opportunity to provide feedback on CCIR’s initial draft of a proposed harmonized annual statement on market conduct. In doing so, we would like to focus on two areas of concern:

• Enabling the CCIR to meet its goals, and
• Protocols to protect proprietary information.

In principle, CADRI welcomes measures which will reduce duplication and eliminate the need for our members to provide information to multiple regulatory authorities. In addition, we are supportive of activities that will assist regulatory bodies, CCIR members among them, to be better informed about insurer activities and market practices. We commend the CCIR on its collaborative work and recognize the value of its members having the information they need in a timely manner.

We have reviewed the proposed harmonized annual statement in detail. Having done so, we would like to assist the CCIR in making the collection of annual data as focused and effective an exercise as possible.

We would like to explore whether the information the CCIR proposes to collect will usefully serve its objectives. As it stands today, the CCIR’s approach is very different from how the industry collects and uses data. Providing the information as presented, will require generation of data in formats not usually used by members. In this context, we would not wish to learn that CCIR’s resources are taxed by working through mountains of data which are not pertinent. For instance, CADRI is curious as to whether the data proposed to be collected on advertising will provide CCIR with the intelligence it seeks. We are of the view that, once the information is collected and analyzed, regulators will realize that it does not enable them to draw any useful conclusions for the purpose of identifying potential market conduct issues or monitoring compliance. That in turn may lead to the first set of data sitting on the shelf until the approach is reconsidered and a revised set of questions developed for a following year.

We would like to propose a face-to-face dialogue with CCIR so that we can gain further insights as to its goals and collaboratively refine the next iteration of the annual statement. For instance, a topic we might consider at that juncture would be the increased accountability that our members’ Boards of Directors and management teams are implementing around compliance and marketplace conduct. With this background, the CCIR would be able to better orient the collection of data in the context of internal governance processes and seek to limit its attention to areas where there is more risk, or less oversight. We believe this consultative process would produce an annual statement better designed to meet your members’ needs.

Secondly, CADRI is interested in understanding CCIR’s protocols for proprietary information. As the Insurance Bureau of Canada (IBC) mentions in more detail, access to information legislations exists across the country. While the spirit of those laws is consistent, the exact language and implementation of each regime is not. From time to time, an insurer may provide sensitive data to regulators in the course of an audit. The information is shared in situ, discussed, but retained by the insurer. The design of the current statement anticipates the collection of some new and competitive information. CADRI is interested in continuing the conversation about how the information will be used and by whom, as well as the protocols CCIR would have in place to ensure that data is handled in such a way as to retain the confidentiality of its source.

IBC has prepared a comprehensive submission which covers other issues in detail. CADRI supports IBC’s position.

Once again, CADRI appreciates the opportunity to work with CCIR to increase its access to relevant data, available in a timely fashion. We look forward to working with you to refine the proposed approach so that it can best meet CCIR’s members’ needs.

Yours sincerely,

Alain Thibault,
CEO & Chairperson

cc: CADRI Board of Directors

250 Consumers Road, Suite 301, Toronto, ON M2J 4V6 T: 416-773-0101 F: 416-495-8723 E: W: www. cadri.com

250, rue Consumers, bur. 301, Toronto, ON M2J 4V6 T: 416-773-0101 F: 416-495-8723 C: W: