Insurers have ignored brokers on new guidelines, says advisory group

The new guidelines on compensation disclosure in group benefits have proven highly divisive in recent months. In February, the CLHIA attempted to address this schism by announcing it was holding back implementation of G-19 until the new year. Its reasoning was the delay would allow more time for consultation with the affected parties, principally advisors and brokers. But according to Rob Taylor of the newly formed National Coalition of Benefit Advisors (NCBA), their pleas have mainly fallen on deaf ears.

“If you look at any industry, when one side of the table decides they want to get together on their own and try to impact all other stakeholders, we start to question what the actual intent is,” he says. “We don’t really think, deep down, that this is all about the consumer. It’s about ‘can we make more money and have access to more of the market’ – that is what CLHIA is governed by.”

In response, Taylor joined with group benefits advisors from across Canada to form the NCBA earlier this year. Their primary mission is to provide a voice for their profession, thus acting as a counterpoint to the insurance providers. In his opinion, the role of the advisor is crucial in acting as a buffer between these huge conglomerates and plan sponsors. And for that reason, he is skeptical of the insurers’ reasoning for G-19.

“Does it mean they want to go direct – who knows? What I do know is that when other jurisdictions around the world tried to do the same thing, it failed miserably and the consumer was harmed by increased costs and less stewardship and protection,” he says.

Speaking to Life-Health Professional last month, Lyne Duhaime, SVP, Quebec Affairs and President, ACCAP-Quebec, was adamant that advisor support was crucial to the successful roll-out of G-19. To achieve that, the CLHIA would hold a number of consultation meetings across Canada to gauge opinion on this issue. Taylor was present at one such meeting in Vancouver, but in his opinion, the important decisions had already been made by the insurers.

“What we know for a fact is the CLHIA is not consulting with anyone,” he says. “What they are doing is rolling out town hall sessions on implementation. These are not feedback sessions and it is very disingenuous for CLHIA to ever mention that they are embarking on a feedback tour.”

Rather than offering critique of G-19, Taylor wants advisors to have a proper seat at the table. In his view, they entire process has been massively flawed and lacking in transparency, which is bad news for brokers, but also for those buying group benefits.

“Insurers can put themselves at an advantaged position where a uniformed consumer might think going direct to an insurer might save them money, and an insurer could imply that,” he says. “If an insurer is going to create a cost structure that is cheaper, it would mean clients who have intermediaries are likely going to subsidize the insurer delivering it cheaper.”