Alberta brokers change course

Rob Clarke, the newly elected president of the Independent Insurance Brokers Association of Alberta (IIBAA), says his organization is as prepared as it can be for the pending implementation of changes to that province’s Insurance Act.

Foremost on Clarke’s agenda is the implementation of mandatory continuing education, expected prior to the February, 2001 licensing period. “We’re very well positioned to be the main provider of education programs,” he says, adding that the association has been approached by other organizations to provide the necessary courses. When similar legislation was introduced in Saskatchewan, its broker association suffered a decline in membership, remarks Clarke. But, he does not expect the same to happen to the IIBAA. “[The education requirements] will increase our membership, rather than decrease it.” This is because non-members will want to take advantage of the lower course fees the association offers its members.

Structural changes

Although Clarke says membership rates are not a problem, the association is making some changes to its structure to encourage new members, and to keep current members involved in decision-making. At the IIBAA annual general meeting, held recently in Jasper, Alberta, and marking the association’s 75th anniversary, the agenda was dominated by changes to the board structure, including a provision that representation of local councils would now be voluntary. The board has “reached market saturation”, says Clarke, with many members already having served as representatives for their region. “We’re not going to go out and beat the bushes [for nominees],” Clarke told members at the meeting. Despite concerns from some members that the association would lose “grassroots” representation if local councils were not required to put someone on the board, an overwhelming majority supported the streamlining plan. Clarke hopes future board members will willingly come from the ranks of the new Young Brokers Committee to be established in the coming year.

IIBAA will also open up its membership categories “a little wider” to allow small players who cannot afford the full membership fee, and others connected with the broker industry, including insurance companies, adjusters and the like, to have associate status.

Sole occupancy

Among the battles the association has squared off in through the past year of lobbying with the provincial government is removal of the sole occupation requirement for brokers. Past president Stephen Evanson says the IIBAA fought to keep the sole occupation requirement, or at worst to reduce the requirement to “primary occupation” where brokers would at least be required to spend the majority of their time doing that business. “We didn’t get either.”

Evanson says the association viewed the change as a threat to consumers, who should expect a certain degree of professionalism from their brokers. “Our point of view was, if you’re going to do it [be a broker], you need to be a professional.”

Clarke believes the sole occupation requirement has “been overlooked in smaller areas”, and says brokers need clarification on exactly what the new requirements will be. “More than anything, we’re hoping for legislation with some teeth.”

Defining “independence”

Clarke expects more discussion in the coming year will be aimed at the label “independent” as it applies to brokers, although he admits it is unlikely the association will change its rules in light of confusion over the definition. “There has been quite a bit of discussion in Alberta, people trying to figure out if brokers owned by larger companies, consolidators or others, are truly independent.” Part of the association’s mandate for 2000-2001 will be “to study the term independent… There are as many different definitions of the word independent as we have members.”

The debate, he says, is based in large part on a misperception of consolidators. Formerly a vice president at a broker consolidator himself, Clarke argues there is “an ignorance of the way consolidators work, they’re all painted with the same brush. A lot [of broker consolidators] are independent to a great degree.” And the future growth of the consolidation movement remains to be seen. Consolidators “are no longer the force they use to be”, and there is some question as to whether the existing consolidators will remain on the playing field.

With the passage of Alberta’s Insurance Act rewrite, brokers are preparing to meet new educational requirements and an altered playing field with the removal of the sole occupancy provision. But, future challenges should actually increase membership of Alberta’s association, says new president Rob Clarke.