Federal Advocacy Kit

IndexCommunicating with Your Member of Parliament or Senator

1

Finding Your Local Federal Politician 3

Bank Act Information 4

Update September 2010 6

Brokers’ Issues 7

Q & As 8

Meeting Guide 10

Sample Letter 11

Feedback Questionnaire 12

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Communicating with Your Member of Parliament or SenatorCommunicating with your Member of Parliament (MP) or Senator is essential to delivering the industry’s current concerns on the federal level. To build on the momentum produced over the last several years, we invite you to continue to meet with your parliamentarian to reinforce and stimulate that relationship.

Over the years we have had much success in achieving our advocacy goals because of the presence and the important role we play in our communities. This kit will prepare you with the necessary tools to ensure that insurance brokers’ issues continue to be a priority in Parliament.

Helpful Hints for Making an Appointment

Make appointments by telephone rather than by fax or email. Unless you are a close friend, do not ask to speak to the MP or Senator directly. Make all meeting arrangements through his/her executive assistant or constituency office spokesperson.

When arranging your meetings, emphasize you are a constituent, and then mention your role in the business community. Also mention whether anyone will be accompanying you. (You may be asked to provide this information in writing.)

If possible, request a meeting in person. If not, a telephone meeting can also be effective.

Ask for a maximum of 30 minutes or a minimum of 15 minutes of the official’s time (Plan on spending 15 to 20 minutes with him/her.)

If you are unable to meet with your MP or Senator, we invite you to write a letter to him or her highlighting the industry’s important issues and how these issues impact the consumer. Emphasize that you are a business person in the MP’s constituency (or province if you are addressing a Senator) serving customers in the community and surrounding area. We have included a template letter for your use.

Please note the following protocols when writing to your parliamentarian:

The prime minister is addressed as the “Right Honourable Stephen Harper” and the letter should begin “Dear Prime Minister:” Once someone has been sworn in as prime minister he/she retains the title “Right Honourable” for life;

Members of the Cabinet attain the title “Honourable” and should be addressed as the “Honourable [First Name] [Last Name], Minister of . . . ,” and the letter should begin “Dear

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Minister [Last Name]:” Note: Ministers of State are considered cabinet ministers and attain the title “Honourable” while parliamentary secretaries do not have a title;

Once someone is sworn in as a cabinet minister, he/she retains the title “Honourable” for life and as such is addressed as the “Honourable [First Name] [Last Name]; however, if he/she is no longer a member of the cabinet, the letter should begin “Dear Mr./Mrs./Ms [Last Name]:”

All other MPs should be addressed as “Mr./Mrs./Ms [First Name] [Last Name],” and the letter should begin “Dear Mr./Ms [Last Name]:”

Senators should be addressed as “Senator [First Name] [Last Name],” and the letter should begin “Dear Senator [Last Name]:”

Often leaders of opposition parties, particularly the Leader of the Official Opposition become members of the Privy Council which also comes with the title the “Honourable.” In the case of the current Parliament, Jack Layton, Leader of the New Democratic Party and Michael Ignatief, Leader of the Liberal Party and Leader of the Official Opposition, are both members of the Privy Council and thus both have the title “Honourable.” Letters to these MPs should be addressed in the same manner as that for past cabinet ministers.

Stay informed of your MP’s or Senator’s schedule so you can approach him/her at events. Events provide an excellent opportunity to approach your MP or Senator in a more casual manner than a pre-arranged appointment. To find out about upcoming political events, contact your MP’s riding office, your local newspaper, and IBAA.

Donations are always a great way of supporting your MP. (Remember only individuals and not corporations can make donations to federal politicians.) Join your riding association as a member of the Board of Directors or as an Executive Committee member to become effectively involved and exert influence.

Prior to meeting with or writing your local Parliamentarian, please review this kit to help you prepare. Once you have concluded the meeting, please fill out the enclosed feedback questionnaire and send it to the Insurance Brokers Association of Alberta. Your feedback will help us understand the level of support and understanding your politician has of the issues involved and better be able to prepare our communication with him/her in the future. If you need help MP or finding your local Senator, please consult the website below.

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Finding Your Local Federal PoliticianMEMBERS OF PARLIAMENT (MPS)

Visit http://www.parl.gc.ca/

In the Current Parliamentarians section of the main page, use the tool “Find your MP using your postal code.”

Simply enter your postal code where prompted, and the website will provide you with your MP information. Remember to enter your office and home postal codes, as the MP may be different depending on your locations.

You can also find MP and party policy information on the political parties’ websites:

www.conservative.ca

www.liberal.ca

www.blocquebecois.org

www.ndp.ca

http://greenparty.ca

SENATORS

In the Current Parliamentarians section of the main page, click on the “Senators” icon and then sort by Province.

Please note the Senators’ phone numbers are listed only for their parliamentary offices as most do not maintain offices outside of Ottawa.

You can also find the Conservative and Liberal Senators on their respective websites listed above.

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Bank Act InformationThe Bank Act is an ambiguously worded document and open to interpretation. We have endeavored to give you our best interpretation of the Bank Act for your information and use.

The sections dealing with banks and insurance are broken down into 3 parts:

1. Permitted Activities;

2. Promotion; and

3. Prohibited Activities.

1. Permitted Activities

A bank is permitted to administer and offer advice regarding "an authorized type of insurance" as well as personal accident insurance. Authorized types of insurance are listed as creditors’ disability insurance, creditors’ life insurance, mortgage insurance, travel insurance, etc. . . .

A bank is permitted to offer advice (which is defined as being initiated only by the customer, NOT by the bank) on non-authorized (i.e., P&C) insurance only if

a. the advice is general in nature;

b. the advice is not in respect of a specific risk or a particular insurance company, agent or broker; and

c. the bank does not refer a person to a particular insurer, agent, or broker.

2. Promotion

A bank is allowed to

a. Promote an insurance company, agent, or broker that deals only in authorized types of insurance; or

b. Promote the company, agent, or broker outside a branch of the bank and is directed to

i. all of the holders of credit or charge cards issued by the bank who receive regularly mailed statements of account;

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ii. all of the bank's customers who are natural persons and who receive regularly mailed statements of account; or

iii. the general public.

3. What Is Prohibited

Banks are prohibited from providing directly or indirectly to an insurer, agent, or broker any information about their customers in Canada;

Banks are prohibited from having any of their subsidiaries or affiliates provide information to an insurer, agent, or broker information about any of its customers in Canada; and

“No bank shall carry on business in Canada in premises that are adjacent to an office of an insurance company, agent, or broker unless the bank clearly indicates to its customers that the bank and its premises are separate and distinct from the office of the insurance company, agent or broker.”

4. Additional Information

The Bank Act is reviewed every 5 years with the next scheduled review to be completed in 2012; IBAA and IBAC must, therefore, remain ever vigilant in our lobbying efforts.

Regulations such as those that require a separation between banking and insurance functions have contributed to the greater strength and stability the Canadian banking system enjoys over many of its global counterparts.

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Update September 2010

When the Bank Act and its regulations were written in 1991, Parliament allowed banks to own insurance companies but deemed it in the consumers’ best interest to prohibit banks from retailing insurance in their branches.

The reason for this prohibition was that consumers can be unfairly influenced and coerced into making inappropriate choices during the credit application process.

The Bank Act and its regulations are silent on the issue of online bank powers regarding the sale of insurance. IBAC has lobbied the government over the past several years for this anomaly to be examined and rectified.

IBAC contends that bank websites are no different than a retail bank. Any business that can be conducted in bank branches can also be conducted on websites.

IBAC argued that the current legislation/regulations are out of date compared to the evolution of the marketplace and the Internet.

The Government of Canada announced in October 2009 that it would amend the rules so that the same rules apply online as they do in retail bank branches.

In September 2010, Finance Minister Flaherty restated this announcement, saying that banks “ought not to try to do indirectly what one cannot do directly.”

When making the announcement, the minister asked banks to comply voluntarily. Banks, however, have implicitly refused. They have left their websites alone and have been actively lobbying the government on this matter.

The Department of Finance is in the process of drafting regulations that are supposed to implement the government’s decision.

The Department has now realized that the ability to apply the rules of the physical world to the web is proving more complex than they originally contemplated.

On September 20, 2010, Finance Minister Flaherty launched the scheduled review of legislation covering federally regulated financial institutions including insurance. This review, last completed in 2007, is required to be undertaken every 5 years and is to be completed by April 2012.

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Brokers’ Issues

Brokerages and brokers need to let their MPs and Senators know that they support the government’s October 2009 announcement regarding bank website activities.

We are not suggesting the Bank Act prohibit banks’ subsidiary companies from having a website. We suggest it be a stand alone website and not part of the banks’ own website. Consumers can still shop online for insurance, including from bank-owned insurance subsidiaries and distributors; however, consumer shopping must be from a separate website.

Keeping the websites separate means that insurance consumers will not be unfairly influenced or coerced directly/indirectly into making choices about purchasing banks’ subsidiary products during the credit application process.

Where banks’ interests conflict with those of the insurance customer, banks are likely to represent their own interests over the customer’s; however, an insurance broker is the insurance consumer’s representative and must put consumer needs first.

MPs and Senators must hear support for Finance Minister Flaherty’s 2009 position:

Brokerages and brokers from coast to coast thank the Government of Canada for making the right decision for consumers and trust the government proceeds quickly with updating the Bank Act to ensure that the same rules apply to banks’ websites and their physical premises.

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Q & AsQ: Does the Bank Act currently allow banks to retail Property and Casualty Insurance?

A: Yes. Currently the Bank Act allows banks to sell Property and Casualty Insurance; however, banks are prohibited from selling from within a bank branch. Insurance can be sold only from a separate physical location.

Q: Does this restriction mean that banks are also prohibited from selling insurance from their websites?

A: Currently, the Bank Act is silent on this issue, and some banks are currently selling P & C insurance from their websites. In October of 2009, Finance Minister Flaherty announced that the government would be adopting a policy that would prohibit banks from selling insurance from bank websites.

Q: Do these provisions in the Bank Act discourage competition and consumer choice?

A: Insurance brokers and IBAA encourage competition and consumer choice and believe that these two principles benefit the consumer. What is of equal concern is that a level playing field in the insurance industry is maintained. If banks are able to sell insurance at the same time that customers are getting approval for loans, the customers may feel that they are being coerced into purchasing the bank’s insurance as a requirement for loan approval. This situation creates an unfair advantage within the insurance industry and, more importantly, results in less consumer choice.

Q: Consumers generally like one-stop shopping wherever possible. Why are consumers prohibited from obtaining mortgages, loans, and insurance at the same time in one location?

A: For products that will be consumed shortly after purchase, the simultaneous purchase of unrelated products and services at the same location undoubtedly benefits shoppers. The same principle does not, however, apply to products with a long duration. Products and services such as insurance that will not be used often for months or years after purchase do not lend themselves to one-stop shopping. Ultimately the question is, whose interests are represented? The broker represents the interest of the customer first and foremost, while the bank represents the interest of the bank. An insurance broker is not just available at the time of purchase but is tied to the consumer for the duration of the policy and as such represents the consumer when a claim is made.

Q: What effect do these Bank Act provisions have on the stability of the financial sector in Canada?

A: Regulation through the division between various financial services segments has contributed positively to the overall stability of the Canadian financial sector. Compared to others in the worldwide 2008 financial meltdown, the Canadian financial sector (more regulated than others) has emerged in a much healthier state.

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Insurance companies are required to maintain a much more rigid degree of liquidity than do banks. When banking and insurance is closely linked, as it often is outside of Canada, banks may use the liquidity for something other than covering insurance policies.

The resulting healthier, stable financial sector has allowed both Canadian banking and insurance industries to compete successfully on the world market.

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Meeting Guide1. Keep in mind that most MPs or Senators will afford you only 15–30 minutes, so you should

be brief and to the point. If there are two or more individuals at the meeting, you should decide on a principal spokesperson to handle the main points; however, all individuals should feel free to comment at any time.

2. Open your meetings by thanking the parliamentarian for having taken the time from a busy schedule to meet with you and discuss this important issue.

3. Introduce yourself by giving your name, title, and the business you represent.

4. Say a few words about the purpose and aim of your meeting, points outlined above under Brokers’ Issues.

5. Make sure to let your MP or Senator know that he/she should not hesitate to contact you or your association with any questions or concerns.

6. End the meeting by offering your assistance to the MP or Senator on any insurance matter that may come up on his/her radar.

7. Complete the De-Briefing Questionnaire after the meeting, and return it to the Insurance Brokers Association of Alberta.

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Sample Letter[Date]

[Name of MP][Street Address][City/ Town, Province][Postal Code]

Dear Mr./Mrs./Ms [Name]:

The Insurance Brokers Association of Alberta (IBAA) is a non-profit trade association that represents more than 360 corporate brokerage members employing more than 5,300 insurance professionals across Alberta. IBAA acts as the industry voice for property and casualty insurance brokerages and brokers in Alberta, representing the interests of brokerages and consumers for more than 88 years.

I am an insurance broker whose business and customers reside in [state name of constituency if writing to an MP or province if writing to a Senator] . [If you live in the same constituency, state that here as well.] The rules and regulations that govern the insurance industry directly and indirectly impact both my customers and business.

The issue that concerns IBAA and its broker members is the fact that banks are currently retailing insurance directly from their bank websites. In October 2009, the government announced that it will introduce legislation that will prohibit banks from promoting property and casualty insurance on their websites. Even though legislation has not been enacted or introduced at this time, IBAA along with brokerages and brokers from coast to coast thank the government for making the right decision in 2009 for consumers. We suggest that the government proceed quickly with updating the Bank Act to ensure that the same rules apply to bank websites and their retail bank branches.

Please feel free to call me at [telephone number] or email me at [email address] should you have any questions, concerns, or comments regarding this matter.

Yours sincerely,

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Feedback QuestionnaireName of MP, Senator or official that you met with

Constituency Date

POLITICAL PARTY

Block

Conservative

Liberal

NDP

Other/Independent

I found this individual to be

Knowledgeable of the issues facing Canada’s insurance industry. Yes No

Supportive of the current situation whereby banks cannot sell insurance through their branch channels.

Yes No

Supportive of the proposed legislation whereby banks will no longer be able to sell insurance online through their websites.

Yes No

Interested in more information.Yes No

Comments and Follow-up

Questionnaire completed by

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Insurance Brokers Association of Alberta3010 Calgary Trail NWEdmonton, AB T6J 6V4Tel. 1–780–424–3320Toll Free 1–800–318–0197Fax 1–780–424–7418Email ibaa@ibaa.caWebsite www.ibaa.ca

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