FSCO guideline on how to treat customers is also for insurance brokers
Published: April 5, 2018
Updated: July 24, 2018
Author: Luke Jones
On Tuesday, the Financial Services Commission of Ontario published a guideline designed for businesses to give pointers on how to treat consumers. The FSCO has confirmed the guideline is applicable to financial services sectors, including property and casualty insurance brokers.
In a release, the financial regulator says brokers and other financial service providers must “conduct a thorough needs analysis to fully understand the consumer’s objectives and needs based on the facts and information obtained from the consumer.”
In the Treating Financial Services Consumers Fairly Guideline, the FSCO says transparency must remain even if a product is being sold digitally:
“If financial products and services are offered digitally, the same level of transparency and disclosure should be applied as with traditional means, in a manner appropriate to the medium, including, where necessary, access to an intermediary who is qualified to provide advice,” FSCO says.
Additionally, the regulator points out companies in Ontario’s financial sector should do more to “get to know” their customers and tailor solutions to them.
“The means and information collected may differ depending on the type of product and legal requirements, but generally, licensees should collect information about the consumer’s financial knowledge and experience; needs; life-stage priorities and circumstances; ability to afford the product; and risk appetite,” FSCO says. “The discussion should be documented.”
While the guideline clearly applies to financial companies like credit unions and money lenders, the FSCO has confirmed it is also for insurance brokers in the P&C market. The body is now asking for feedback on the document and is actively asking customers to send written comments on the guideline in the hope to improve it.