Battle with the Banks

History buffs may note some irony in the fact that the Insurance Brokers Association of Canada (IBAC), thanks to a labor strike, had to re-locate its annual general meeting on nine days’ notice from the Manoir Richelieu in La Malbaie, Quebec, to the Hotel Loews le Concorde in Quebec City.

The Loews La Concorde overlooks the neighboring Plains of Abraham, once a farmer’s field, where British General James Wolfe and French General Louis-Joseph de Montcalm fought in 1759 in a battle that determined the fate of Quebec and the country.

In some ways, IBAC could not have met at a more significant spot to develop its campaign to thwart an aggressive public relations lobby targeted at MPs and waged by the Canadian Bankers Association.

IBAC’s metaphorical battle against the banks, encapsulated by the euphemism ‘Bank Act review,’ will be won if brokers can convince MPs to retain the status quo. Right now, bank branches are not allowed to offer a full range of insurance products, but the Canadian Bankers Association wants that to change. IBAC’s concern is that a competitive turf war with local bank branches might just drive brokers across the country out of business.

“This is a very real threat,” IBAC president-elect Bob Kimball of Pearson Insurance in Sussex, New Brunswick, said of the Bank Act review during his first speech as president to 70 IBAC delegates and observers from across the country. “If the review goes in the wrong direction, our industry as we know it will be changed forever and livelihoods will be jeopardized. Consumers and the insurance product will suffer – definitely suffer – and Canadians will pay a steep price for having less competition…. The banks will not bring competition, they will bring control.”

On February 23, the federal government launched its 2006 Bank Act review by issuing a consultation paper in the federal budget. IBAC prepared a submission to the Department of Finance in time for a consultation deadline of June 1, 2005.

In the meantime, IBAC isn’t wasting any time reaching out to brokers across Canada. “We have to somehow motivate our brokers to get to their MPs,” IBAC’s outgoing president, Keith Wilson of Hudson Bay, Saskatchewan, told the Quebec City gathering.

“We will win this fight. I believe it in my heart that we will win, but we will win by getting our brokers in every single community across this country to go to their MP. Otherwise, we’re going to be in trouble.”

IBAC has already started to marshal its forces to countermand the banks’ government lobby. IBAC, for example, has already retained Impact Public Affairs, an Ottawa-based public relations firm, to provide counsel and resources in communicating brokers’ messages to federal government decision-makers. That message will be crafted with the aid of a newly hired communications manager, Steve Masynyk.

The banks’ lobby is not the only front in which the organization is engaged. IBAC’s provincial members are waging separate, individual campaigns to reassure local regulators in the wake of US investigations into the sale of non-traditional insurance products. The so-called “Spitzer investigations” -named after the New York state attorney general, Eliot Spitzer, who spearheaded the investigations – motivated Canadian insurance industry regulators to re-examine how brokers and insurers disclose their business relationships to clients.

The provincial associations have sent submissions to the Canadian Council of Insurance Regulators (CCIR), which is conducting public hearings on what is now known as the “transparency and disclosure issue.” IBAC’s 2005 annual report dubbed the disclosure issue “the next big political issue to be faced by our [political action] committee and possibly our task force, as this issue ratchets itself up from the regulatory level to the political level.” As of now, the issue is in somewhat of a holding pattern, with the ball being very squarely in the regulators’ court. The CCIR is expected to conduct more consultations before issuing some kind of further report.

Technology also found its way onto the IBAC agenda in Quebec City – specifically the implementation of the Centre for Study of Insurance Operations’ (CSIO) Internet-based company-to-broker “portal.” The single-entry, multi-company interface technology is intended to make brokers’ workflow more efficient, by offering brokers “single sign-on” access to participating insurers, the ability to submit all new business and guaranteed quoting.

Insurers have agreed to pay to belong to the portal, so long as they see it being used by the broker force. As a result, IBAC CEO Dan Danyluk and Insurance Brokers Association of Ontario COO Randy Carroll have made presentations throughout Ontario in an attempt to sign brokers onto the portal. The initial goal was to sign up 215 brokerages, IBAC’s annual report notes.

“Because there has been so much effort put (into creating and populating the portal), and the portal is a good tool, the insurers have been willing to fund the project until the end of 2005 without any questions asked,” the annual report notes. “CSIO will have the majority of markets available to Ontario loaded into the system, as it has been opened up to all insuerers, and that we, as brokers, should be using the portal as our source for requesting quotes.”

Wilson informed the Quebec City meeting that the technology front has been quiet of late. But he said he remained “very optimistic about the portal” and “I think we have to keep our eye on the ball.”