The Registered Insurance Brokers of Ontario (“RIBO“) held a virtual town hall on Thursday, October 17 to clarify its expectations for disclosure set out in the new guidance Mandatory Disclosures Guidance RIBO-002 released in April 2024 (the “Guidance“), and to answer questions relating to the Guidance. A link to the Guidance is here.
Some key takeaways from the Guidance and the town hall are:
- RIBO emphasized that mandatory disclosures must be made no later than at the time of the quote. This is a change from previous guidance which provided that disclosure must be at the point of sale.
- Although Regulation 991: General requires disclosure in writing, verbal disclosure – if done correctly – can be more meaningful to consumers. If verbal disclosure is provided, the Guidance provides that brokers must follow up in writing to confirm the information that was disclosed.
- A written follow-up can be made by sending PDF copies of the disclosures, or by including links to the documents in an email.
- Any material change to compensation arrangements should be brought to consumers’ attention on an ongoing basis and at renewal. This can be done by sending links, provided that the broker highlights the relevant information in the email. A link by itself without any explanation or highlighting will be considered not sufficient by RIBO.
- There is no requirement to obtain written confirmation from the client that they have received the disclosure. However, obtaining written confirmation may make sense and work within a broker’s internal processes and workflows.
- The commission disclosure requirements apply to commissions received from MGAs as well as from insurers. Brokers must disclose commissions received from all markets, not only insurers. The presenters invited brokers to contact RIBO if they would like to see MGA specific disclosure guidance.
RIBO began enforcing the disclosure and record-keeping requirements set out in the Guidance as of October 1, 2024. Compliance will be enforced by RIBO through its spot-check program and by investigations. RIBO advised that records of disclosure that are difficult to locate or understand, or disclosure that is unclear or vague, will be treated as “non-compliant”.
A recording of the presentation and a copy of the slide deck will be posted on the RIBO site in the coming weeks.
If you have questions regarding the Guidance and its application to your business practices, you can reach out to a member of our team.
