On February 6, 2012, the Canadian Council of Insurance
Regulators ("CCIR") released a CCIR issues paper entitled
Electronic Commerce in Insurance Products ("Issues
Paper"). The purpose of the Issues Paper is to educate,
stimulate debate, launch a process of consultation and build a
common understanding for regulators and stakeholders regarding
electronic commerce in the insurance industry.
Currently in Canada, there is no regulatory framework specifically
applicable to the online distribution of insurance products,
although a number of voluntary and legislated schemes that apply to
electronic transactions generally exist. Further, there has been
little guidance provided by the Office of the Superintendent of
Financial Institutions Canada and the provincial and territorial
insurance regulators. Most regulators appear to take the position
that the current rules regarding the traditional sale of insurance
apply equally to online transactions.
The following are key aspects of the Issues Paper:
2. Current Use of Electronic Media –
The Issues Paper outlines the current use of electronic media in
Canada to advertise, distribute and maintain insurance products. In
particular, the Paper identifies four main activities relating to
the online distribution of insurance: 1) providing information to
consumers, 2) obtaining a quote, 3) concluding an insurance
contract, and 4) obtaining advice. The information was compiled
based on a review of a collection of websites operated by insurance
intermediaries and insurance companies in Canada.
The CCIR seeks stakeholders' comments on the accuracy of
2. Consumer Protection – The Issues
Paper outlines a number of potential consumer protection issues
which may be of concern to regulators. Some of these issues include
risks to consumers relating to:
the absence or weakening of advice from licensed
lack of understanding as to whether the service provider is a
lack of accessibility to necessary information about the
lack of opportunity to review the accuracy of the information
provided to the service provider;
lack of awareness of the terms and conditions of coverage;
reliability of the online transaction; and
security of personal information.
The CCIR discusses possible ways to address these consumer
The CCIR seeks stakeholders' comments on whether the issues
identified are significant, whether all significant issues have
been identified, and how best to achieve consumer protection goals
in the electronic commerce context.
3. Existing Paper Transactions – The
Issues Paper outlines the current practice of paper beneficiary
designations and termination of insurance policies by registered
mail or personal delivery. In some instances, these paper
transactions are currently mandatory under the applicable insurance
legislation or regulation.
The CCIR seeks stakeholders' comments on the current practice
of designating beneficiaries and terminating insurance policies by
With the increasing importance of e-commerce, it is hoped that
this Issues Paper will lead to the establishment of a harmonized
regulatory framework in Canada governing electronic commerce in
insurance. However, any regulatory change should be flexible enough
to accommodate the increasing frequency with which changes occur in
Internet technology and usage.
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