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CAFII Holds a Webinar with Dallas Ewen, Canada Life, and David Elder, Stikeman Elliott, on Privacy Issues and Trends in Insurance

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CAFII held a webinar on privacy issues and trends in insurance on 26 January, 2023 with Dallas Ewen, Canada Life, and David Elder, Stikeman Elliott. 

David Elder said that from a business perspective, privacy laws to date in Canada have been quite effective.  In the common-law provinces, those laws are largely principles-based, and Privacy Commissioners have been able to deal with a wide variety of issues.  There are significant non-monetary penalty reasons why companies want to comply with privacy requirements.  One problem, however, is that there is no real way to appeal a ruling made by a Commissioner.  Dallas Ewen agreed that the privacy regime is largely effective in Canada.  He also agreed that there is difficulty challenging privacy rulings, but the new federal Bill C-27 does provide for a tribunal that, to an extent, addresses this shortcoming. 

Dallas Ewen noted that there is a lack of privacy laws harmonization in Canada from jurisdiction to jurisdiction.  There is the federal Personal Information Protection and Electronic Documents Act (PIPEDA) which applies everywhere in Canada except where there are provincial regimes that have been deemed to be substantially similar to PIPEDA — which is the case for British Columbia, Alberta, and Quebec (Personal Information Protection Acts (PIPA) in BC and Alberta, and a different name in Quebec).  But there are some small differences between the different regimes.  The most significant difference between the regimes is around the obligation to report breaches. David Elder echoed Mr. Ewen’s sentiments, but noted that those challenges are not that different from other jurisdictional issues that exist in Canada in other sectors.  There is also broad co-operation and co-ordination between regulators, which is helpful.  However, new challenges may come about with Quebec’s recently modernized privacy legislation, which will make it a bit of an outlier. 

David Elder built on those comments by noting that Quebec has recently taken a very different approach and is making major amendments to its privacy regime.  Quebec’s amendments are taking place over several years and reflect a new direction, which is more similar to the approach taken in Europe (the European Union’s General Data Protection Regulation or GDPR).  In general, there are higher standards and expectations now in the Quebec requirements as well as new, additional requirements. Quebec’s new law is also imposing requirements not just for activity outside of the country, but outside of Quebec.  There are also now significant new monetary penalties in the Quebec legislation, and a right of private litigation.  Dallas Ewen agreed that the new rules are different from elsewhere in Canada and quite intense.  There is more of a philosophy in this new regime around viewing privacy as a human right. 

Notwithstanding Quebec developments, most other jurisdictions in Canada are also looking mainly at international developments, including in California and the European Union’s GDPR.  The federal privacy rules that are being modernized in Bill C-27, if passed, will replicate many of the features of the Quebec rules.  Canadian privacy laws will likely have to be  reformed in order to align more closely the GDPR and with international developments generally, especially in terms of enforcement and having significant monetary penalties for non-conforming businesses. 

Any business that is data-dependent will have to deal with the issues around the use of personal information.  If data was once personal information and in aggregated form could be tied back to an individual, such data could now be captured by the more stringent rules in Europe and elsewhere.

There were attendees at the webinar from allied industry associations CLHIA, THIA, and the Canadian Bankers Association (CBA), and from regulatory and policy-maker organizations including:

  • the Canadian Insurance Services Regulatory Organizations, or CISRO;
  • the Insurance Councils of Saskatchewan, or ICS;
  • the Alberta Insurance Council, or AIC;
  • the Government of Alberta; 
  • the British Columbia Ministry of Finance; and
  • the British Columbia Financial Services Authority, or BCFSA.

CAFII Holds a Webinar with Blair Morrison, CEO of the British Columbia Financial Services Authority

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CAFII held a 1 December, 2022 webinar with Blair Morrison, CEO of the British Columbia Financial Services Authority. 

Mr. Morrison said that as a relatively new organization launched three years ago, BCFSA has undergone a significant journey since 2019.  The Financial Institutions Commission of British Columbia, FICOM, was the predecessor to BCFSA.  The Minister of Finance wanted the new regulatory authority to be “modern, effective, and efficient.” 

BCFSA is an integrated financial services regulator that needed to make changes from the way that FICOM had operated.  In particular, BCFSA has emphasized the importance of dialogue with the industry, and it views conversation and consultation as critical to its mandate.  As an integrated regulator, it is responsible for credit unions, insurance companies, real estate companies, trust companies, pensions, mortgage brokers, real estate licensees, and deposit-taking institutions. 

Mr. Morrison said that there is a Superintendent model at BCFSA where he is ultimately the lead regulator for all the different financial services sectors; but because no one person can manage all those areas, he has many senior people supporting him.  However, there is a functional approach as opposed to a siloed approach, so different staff executives cut across the different sectors.  This is important because decisions in one area will have an impact in many other areas, so executives need to understand the overall picture.  Mr. Morrison also takes a very delegated approach. He said that BCFSA has 350 employees, with a budget of $60 million which comes from fees paid by industry.  Employees operate in a hybrid model, working both from home and in the office.

Mr. Morrison said that he is supportive of a principles-based regulatory approach, but there also need to be rules to ensure consumer protection.  BCFSA knows that it does not have all the answers, and it believes in communication and dialogue; but there are times when enforcement is required.  However, the starting point is the larger principle of what the regulator is trying to achieve.

BCFSA has rule-making authority, and Mr. Morrison said that was necessary to provide it with the types of tools it may need to use for consumer protection.  Rule-making authority, however, is part of a very clear and transparent process and does involve consultation with industry.  BCFSA also has some emergency powers but they are also subject to a process. In terms of regulatory priorities, BCFSA wants the industry to succeed.  It has a three-year roadmap which it has shared with industry. 

There is a BCFSA Insurer Code of Market Conduct consultation that is ongoing.  Industry has provided a lot of input on this, but there are constraints on what BCFSA can do (or not do) because developing a BC Code is a statutory requirement.  Climate change is another major priority for BCFSA.  But all those priorities are subject to ongoing discussions with industry — everyone, the regulator and the industry included, has too many jobs and not enough resources, so it is important to work collaboratively to achieve the best outcomes. BCFSA has strong, productive relationships with the BC Ministry of Finance and with the Insurance Council of British Columbia.  It also consults with federal bodies such as the Bank of Canada, and it works closely with the Canadian Council of Insurance Regulators (CCIR). 

On digitization, Mr. Morrison said that data is incredibly important and regulators will need to use data well to make better decisions.  There needs to be more sharing of data, as regulators will need it to understand what is happening in the industry and how best to respond.  With digitization, there are always risks of leaks and breaches, and regulators need to keep a close eye on those risks.  Regulators will also increasingly need to use regulatory software applications to operate more efficiently. 

Mr. Morrison said that he supports regulatory harmonization, but every province may have different priorities or approaches from time to time.  When that happens, there will be dialogue with industry and an explanation of why that unique or separate approach is being taken.

Mr. Morrison ended the webinar fireside chat by noting the important role of mental health in the workplace and that supporting employees at BCFSA is a key priority for the organization and for him personally. 

There were representatives in attendance at this webinar from the CLHIA and from the Insurance Bureau of Canada, or IBC, and from the following regulator and policy-maker organizations:

the Office of Nova Scotia’s Superintendent of Insurance;

  • Quebec’s Autorité des marchés financiers, or the AMF;
  • the Financial Services Regulatory Authority of Ontario, or FSRA;
  • the Insurance Councils of Saskatchewan;
  • Saskatchewan’s Financial and Consumer Affairs Authority, or FCAA;
  • the Ministry of Finance, Government of British Columbia;
  • the Insurance Council of British Columbia;
  • the British Columbia Financial Services Authority, or BCFSA; and 
  • the Government of the Northwest Territories.

Challenges of Keeping Pace with Canadians’ Evolving Insurance Needs

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By Brendan Wycks, Co-Executive Director, CAFII.

New research by Deloitte Canada has found that collaboration across distributors, underwriters and even regulators of Credit Protection Insurance (CPI) is key to delivering the type of “best-in-class” digital experience that Canadian consumers have increasingly come to expect.

According to the Deloitte study, which was commissioned by CAFII, digitization is one of the insurance industry’s most prominent and disruptive trends; and it demands that the industry respond with new and innovative business models and customer experiences.

The report identifies key trends that are driving the need to transform the insurance business, including:

  • Consumers expect more seamless, convenient, and personalized digital experiences from their insurers;
  • Growing competition from new entrants with tech-enabled business models; and,
  • Increased availability of data and use of advanced analytics have made it possible to generate deeper and more precise customer insights.

In order to deliver an industry-leading digital experience for consumers, the report says that insurers need to have certain attributes and underlying capabilities, including:

  • A well-defined digital business strategy which provides absolute clarity around how customers, products, and purchase channels will be supported;
  • Be highly customer-focused in how they do business and use a human-centred approach in designing their end-to-end user journey and digital experience;
  • Use data-driven insights to inform business priorities, product development, and customer experiences; and,
  • Embed a digital culture, skills, and ways of working throughout the organization in order to drive a holistic culture of innovation.

The report found that there are unique challenges facing Canada’s CPI industry, accentuated by the multiple stakeholders involved including underwriters, distributors, and regulators. For example, the CPI digital experience is highly dependent upon the borrowing journey that consumers go through when they want to take on a new loan obligation (e.g. mortgages, Home Equity Lines of Credit, car loans), and the regulatory environment for that journey can be difficult to navigate digitally, due in large measure to a lack of harmonization across the provinces and territories.

Despite those challenges, the CPI industry is committed to delivering on consumers’ digital experience expectations, with 100% of the CAFII members surveyed by Deloitte indicating that digitizing CPI is a top strategic priority, and 43% saying that they are targeting having up to 40% of consumers’ CPI applications and enrolments be fully digital by 2025.

What’s more, CPI distributors recognize the need for greater multi-channel alignment, with 86% of CAFII members indicating that cross-channel integration is key to creating seamless and satisfying digital CPI experiences for consumers.

The Deloitte report is the latest in a series of research studies commissioned by CAFII over the past seven years that have looked at customer satisfaction with CPI and travel insurance, and how the Association’s members can meet or exceed consumers’ evolving expectations.