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

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 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.

CAFII Holds a Webinar on “Travel Trends and Travel Insurance Implications As Society Emerges From the COVID-19 Pandemic” 

CAFII held a 3 November, 2022 webinar with four expert panelists: Eliot Draga, from the Travel Health Insurance Association of Canada; Sheila Burns, from the Canadian Life and Health Insurance Association; Katia Umotonuwase, from Manulife and the Chair of the CAFII Travel Insurance Experts Committee; and David Moorcroft, travel blogger and host of “The Business of Blockchain” podcast.   

David Moorcroft said that travel is still recovering, with only half the travel globally in January to May 2022 relative to 2019.  Elliott Draga said that travel spend in Canada is about 75% in Q4 2022 relative to 2019, so that is another indication that there is still more recovery to occur.  Sheila Burns also noted that some of the Canadian travel may be due to use of travel vouchers, so the numbers may not even be as good as they seem.  Katia Umutoniwase agreed that there is definitely a recovery in place, and hopefully things will return to normal in 2023.  

Another factor is that people are thinking of cutting back on travel due to inflation and higher interest rates.  On the other hand, people have accumulated significant savings over the past few years during COVID.  Snowbirds are also less likely to be affected by inflation than other Canadians.  Older Canadians who wanted to travel but could not due to COVID are likely to spend what is needed to get the experience they want, no matter the cost.    

The panel spoke about some of the challenges at airports and with obtaining passports.  There are definitely significant service delays as governments and airlines try to adopt to heightened delays, mostly due to a staffing problem.  This is the same situation with the surge in demand for passports, with the government not anticipating the level of demand that occurred in a short span of time.   

The panel was asked about how travel has changed, and Katia Umutoniwase said that clients are now initiating questions about travel insurance.  There is an increase in people taking large, complex trips, she added.  Elliott Draga said that there are definitely more travel insurance policies being issued, and people are paying more attention to the terms and conditions of their insurance.   

The panel spoke about the adjustments that have been experienced in other areas, such as the shortage of pilots, the chip shortage, and the challenges in the car rental business.  There was also reference to some issues with the system for easier passage across the Canada-United States border, called Nexus.   

It was noted that now that there are lower level advisories regarding COVID, it is now covered in regular travel insurance for most policies, without the need for purchasing additional coverage or riders for COVID.  It is still very important for consumers to do their research and determine exactly what a policy covers, and what it does not.   

Most panelists felt that the next time a pandemic occurs, governments will be better prepared and will use a more scientific approach to some of their requirements.  The population may be better educated about the best response to take individually including more willingness to be vaccinated.  However, every situation is different and it is hard to predict how such a situation will unfold in future.  

Some polling questions were asked during the webinar and the results can be found here:  

https://www.cafii.com/wp-content/uploads/2022/11/CAFII-Webinar-Nov-3-English-Poll-Results.pdf

In attendance at the webinar were representatives from allied industry Associations the CLHIA and THIA, and from the Regulatory and Policy-Maker community:  

The British Columbia Financial Services Authority (BCFSA);  

Alberta Treasury Board and Finance;  

The Alberta Insurance Council; 

Insurance Council of Manitoba;  

the Financial Services Regulatory Authority of Ontario;  

Quebec’s Autorité des marchés financiers, or AMF;  

The New Brunswick Financial and Consumer Services Commission, or FCNB;  

The Office of the Superintendent of Insurance, Government of Nova Scotia;  and 

The Office of the Superintendent of Financial Institutions, or OSFI.  

CAFII Holds a Webinar with Pollara Senior Vice President Lesli Martin on Consumer Preferences and Product Development Trends

CAFII held a 5 October, 2022 webinar with Lesli Martin on Consumer Preferences and Product Development Insights–Emerging From Recent Research In Financial Services and Relevant Comparator Industries.  Ms. Martin, a Senior Vice President at Pollster Pollara Strategic Insights, presented a deck on “Consumers in the Post-Pandemic World.”  Her presentation noted that out of the pandemic, there were heightened mental health struggles for many Canadians, including higher than usual levels of anxiety and depression.  The worries that people struggle with ran the gamut from health concerns, economic worries, and learning how to do things differently.  Ontario has the highest level of mental health issues in Canada; Quebec has the lowest, but it is higher than usual everywhere in the Canadian. 

Canadians are also learning new ways of doing things, including increased digital sales, with Canadians conducting more e-commerce sales than ever before.  Work had changed as well, with many Canadians working from home.  As the pandemic appears to recede, new issues are now confronting Canadians, including high inflation, high interest rates, and international instability.  Two-thirds of Canadians expect inflation to rise in the coming months, and remain high for at least one year.  Canadians also do not believe that their wages will keep up with inflation. 

Pollara has also started a “rage index” which measures Canadians anger around six issues: the federal government, the provincial government, the Canadian economy, their own personal  financial situation, the types of changes happening in Canada, and the latest stories in the news.  An average of 49% of Canadians are annoyed or angry about these six topics, and 14% are very angry about the six topics.  On the other hand, while 25% of Canadians feel exhausted and burnt out, almost two-thirds are hopeful about the future.

Pollara has also noticed that Canadians are changing their behaviours due to inflation, with 73% buying cheaper brands of groceries, 68% spending less money on vacations this year, 72% eating out less at restaurants, and 67% delaying major purchases.  These trends are being observed in all parts of the country, and the impact is the same in urban and rural Canada.  But the impact is being felt most by lower income Canadians.

One of the impacts that Pollara has tracked is that both credit protection insurance and travel insurance are more likely now to be purchased online as opposed to before the pandemic.  However, consumers still want the ability to talk to someone, even if making an online transaction.  In general, the pandemic caused Canadians to be more comfortable with online banking than ever before. 

Post-pandemic, many Canadians want to continue to be able to work from home at least part-time, especially women.  Almost half of women say they are likely to quit their jobs if asked to return to the office full-time.  Most Canadians say that they will return to pre-COVID patterns of in person arrangements for loans and buying insurance. Getting the interaction right with customers around financial transactions is important, as over half of Canadians report feeling stress when interacting with the financial services sector.

A poll of participants asked: “Have you cut back on important purchases due to inflation?”   Of respondents, 20% said they had significantly cut down due to inflation, and 44% said they had cut back moderately; 37% said that they had not cut back at all.  Ms. Martin said that this was very aligned Pollara’s own research. 

Another poll of participants asked: “Tell us where you are in terms of a return to working from the office: just like before the pandemic?; still only working from home?; or hybrid, working from the office sometimes, but not every day.”  From respondents, 95% said they are only working from home or working in a hybrid model. 

There was excellent regulator and policy-making participation in the webinar, with the following organizations registered:

• the Financial and Consumer Services Commission of New Brunswick, or FCNB;
• the Nova Scotia Department of Finance;
• Quebec’s Autorité des marchés financiers, or the AMF;
• the Financial Services Regulatory Authority of Ontario, or FSRA;
• the Ontario Ministry of Finance;
• the Government of Alberta;  and
• the British Columbia Financial Services Authority, or BCFSA.