Insurance Brokers who own their own book of business and are contemplating moving to a new agency should be aware of a recent order dated April 27, 2018 from the Insurance Council of B.C. (“Council”) in which Council ordered the broker to pay a $2,500 fine as a result of transferring a client list without the express consent of both old and new agencies and of the clients. The client list contained personal information and included client names, policy numbers, and policy effective dates. See the Council’s order here.
In B.C., Council Rule 7(1) provides that licensees “must hold in strict confidence all information acquired in the course of the professional relationship concerning the personal and business affairs of a client” and prohibits licensees from using or disclosing such information without express authorization by the client. In this case, prior to becoming a representative of the agency, the broker had made a verbal agreement with the agency’s nominee that the clients would remain his. After joining the new agency, the broker had also called each client when their policies were up for renewal to advise them of his move to the new agency. However, the broker had not obtained the express consent of his clients to transfer their personal information to the new agency, nor did he obtain the consent of the old and new brokerages to the transfer of the clients’ information, and therefore the broker was in contravention of Council Rule 7(1).
Under Council Notice ICN 17-004 Reminder of Licensee Responsibilities Related to Disclosure or Transfer of Client Information (“Notice 17-004“), if a general insurance agent leaves one agency to represent another, such agent must not have any client information in their possession, and may not transfer client information from the former agency to the new agency without the consent of both agencies and express authority from the client to transfer their personal information.
Although Council Rule 7(1) and Notice 17-004 are only applicable in B.C., brokers in all provinces and territories must comply with the federal Personal Information Protection and Electronic Documents Act (or their province’s substantially similar legislation) which requires individuals to have knowledge of, and consent to, the use and disclosure of their personal information, with certain exceptions for business transactions.
Brokers who work within a corporate agency who intend to own their own books of business are therefore advised to obtain an express consent from each client which permits not only the corporate agency, but also the broker personally, to collect, use and disclose the client’s personal information and permits such information to be transferred to another corporate agency in the event that the broker decides to switch agencies.
