Top 10 broker gaffes

Major infractions committed by Quebec insurance brokers include acting dishonestly, negligently, or not acting with competence and professional integrity, says the disciplinary committee of the Chambre de l’assurance de dommages (ChAD), the province’s self-regulatory body for brokers, agents and claims adjusters.

ChAD’s 2017 annual report found that the Top 2 infractions were “carrying on activities dishonestly or negligently” (14.7%) or not acting with competence and professional integrity (14%).

The Top 10 contraventions of the ethics code for property and casualty insurance representatives (brokers and agents, excluding claims adjusters) were:

• Carrying on activities dishonestly or negligently (14.7%).
• Not acting with competence and professional integrity (14%).
• Neglecting professional duties while carrying on work-related duties (10.1%).
• “Making a statement which is false, misleading or liable to be misleading” (9.7%). For example, saying an insurance product is the “best product on the market” or verbally confirming that a contract is in effect when it is not or has not been submitted to the insurer.
• Failing to act as a “conscientious advisor” by not informing clients of their rights and obligations and not giving them all the necessary or useful information (7%).
• Not, before finalizing an insurance product, describing the proposed product to the client in relation to his or her identified needs and specified coverage (4.3%).
• Failing to act with integrity towards clients (4.3%).
• Not personally gathering all the necessary information to assess a client’s needs, to offer the insurance product that best meets those needs (3.9%).
• Not, without delay, following up on the instructions of a client or informing him or her that he was unable to do so (3.9%). For example, a broker or agent must obtain the coverage requested, but also respond to any other requests, such as termination or additional coverage. The broker or agent must also inform the client if the risk cannot be covered as of the requested date, “rather than pretend” the coverage is binding.
• Failing to execute their mandate (3.6%). Under the ethics code, a client must be informed of what has, and has not, been done in accordance with his or her instructions. The broker/agent must fully, promptly and proactively report on conditions, requirements, premiums, etc.

Twenty “other infractions” constituted 24.4% of the total contraventions. Among them were:

• Not notifying a client of all the costs that are not included in the amount of the premium
• Using or appropriating, for personal purposes, money or securities entrusted to him
• Directly or indirectly placing him/herself in a conflict of interest situation
• Not keeping records relating to clients, in accordance with regulations
• Advising or encouraging a client to do something that the broker/agent knows is illegal or fraudulent.