CAFII Webinar: Quebec‘s Bill 96 (Charter of the French Language): Compliance Requirements and Related Considerations For Communicating With and Serving Consumers In The Life and Health Insurance Sector

On 27 May, 2023 CAFII held a webinar with Romy Proulx, Associate, Stikeman Elliott and Paul Prosterman, Senior Partner, Norton Rose Fulbright.  Romy Proulx noted that Bill 96 builds on the original Quebec Charter of the French Language, which was adopted in 1977 to protect the status of French in Quebec.  That original Charter  provides that French is the official language of the province of Quebec.  However the new Charter amends the charter in many ways, including the language of insurance policies.  The Charter is very recent and there are scant regulations or guidance, leading to many grey areas.

Paul Prosterman said that the rules governing the language of insurance policies is impacted due to new requirements around “contracts of adhesion.”  Such contracts currently may be drawn up in English if that is the express wish of the parties.  Bill 96 will change that by requiring parties to a contract of adhesion to be drawn up in English can only be bound by such a contract if they are provided with a French version of the contract before they enter into the contract.  At a minimum, a French version of the policy must be available to the insured before entering into the contract.  As well, Romy Proulx noted that pleadings must now be made in French.  Filings may be in English, but a French version by a certified translator must be attached.

Paul Prosterman says that the contract of adhesion is one party draws up a contract that is non-negotiable.  Generally, insurance contracts are contracts of adhesion.  Certainly, even if a master policy is negotiated and not therefore a contract of adhesion, that is not true for individuals who are covered by the master policy and issued certificates.  So for credit protection insurance and travel insurance, a French version of the contract must be provided to the individual first. 

Romy Proulx agreed that the Charter is filled with untested elements and ambiguity.  She added that asking the Office of the French Language questions could lead to answers that are not optimal.  There are guidelines on the website of the Office that are quite helpful. 

Both panelists felt that further constitutional challenges of the Charter were possible.  It was noted that these rules in the Charter apply to call centres and interactions on the phone.  If a customer is bound on the phone to an insurance policy, that policy must be presented in French first to the customer. 

In addition to CAFII members, there were attendees from the Canadian Life and Health Insurance Association, or CLHIA; the Travel Health Insurance Association, or THIA; from the Canadian Bankers Association, or CBA; and from insurance and financial services regulators and policy-makers from across Canada, including the following:

• Quebec’s Autorité des marchés financiers, or the AMF;
• The Government of Nova Scotia; and
• Alberta Treasury Board & Finance.

The presentation made can be found here:

https://www.cafii.com/wp-content/uploads/2023/06/Presentation-Bill-96-May-2023.pdf

Summary of Webinar with Nicholas Herbert-Young, Senior Relationship Manager to the International Association of Insurance Supervisors (IAIS), on International Regulatory Trends & the Work of the International Association of Insurance Supervisors (IAIS).

CAFII held a webinar on 27 April, 2023 with Nicholas Herbert-Young, who is a member of the UK Financial Conduct Authority’s International Department, where he has a focus on global institutions, and where, as part of his FCA responsibilities, he is also Senior Relationship Manager to the International Association of Insurance Supervisors (IAIS).  Mr. Herbert-Young was recommended as a webinar speaker by FSRA CEO Mark White, who is the Chair of the Market Conduct Committee of the IAIS, which Committee Mr. Herbert-Young sits on.

Mr. Herbert-Young said that the UK Financial Conduct Authority is one of two regulators in the UK, with a focus on market conduct.  Mr. Herbert-Young’s role is to ensure that the FCA is properly represented at the IAIS and engages on the issues where it can add value.  The IAIS exists to ensure that supervision creates fair and safe outcomes for consumers, along with a focus on financial stability.  The key focus for the FCA on the IAIS is the Market Conduct Committee, which Mark White chairs and which the AMF also has representation on.  The IAIS produces issues papers on matters of interest. 

IAIS has over 200 jurisdictions which represents 90% of the world’s premiums.  Other international organizations are also involved in it, such as the National Association of Insurance Commissioners.  The IAIS sets up layers of principles, standards, and guidance which are agreed between the members.  There are also systems of review so that members can be assessed.  It does not have enforcement capabilities, but review exercises are very important and impactful.  Insurance Core Principles including ISP19 on the conduct of business are also fundamentally important. 

The IAIS has 35 staff members supporting its activities, and there is a paid Executive Director.  There is an agreed five-year plan with stated objectives, and the organization has become more worldwide as opposed to being driven by developed countries only.   Funding comes from the members and is based on premium income for the jurisdictions they represent.  A variety of committees provide input on specific issues.  The head office is located in Basil, Switzerland but meetings are held in different locations, and virtual meetings are now much more common.  There is also an Annual General Meeting each year in November, which is hosted by a member.  The Market Conduct Working Group has over 30 members. 

Nicholas Herbert-Young said that the main contributors to the market conduct work of the IAIS have been the AMF, and more recently FSRA. Key regulatory trends of the IAIS in the market conduct area has been on culture and diversity, equity, and inclusion (DEI).  The work on culture has been done with the Governance Working Group, and has led to some working papers.  The DEI work has focused on vulnerable populations and their treatment by insurers. 

Keith Martin noted the importance to CAFII members of principles-based regulation, and Nicholas Herbert-Young said the IAIS seeks to accommodate that approach.  The IAIS is based on standards and does not take a prescriptive approach, but members may have their own approach.  Mr. Herbert-Young noted that often those who request a principles-based approach follow up with a request for more clarity and detail, which is he said completely understandable. 

The IAIS is also exploring vulnerable populations and financial resilience, with some of this work being explored by the DEI Working Group.  In terms of the challenges caused by COVID-19, the FCA pivoted very quickly to a virtual model.  There was also discussion of the mortality and health impacts of climate change, and the resultant impact on the life and health insurance sector.  This is something that the IAIS is turning more attention to.  The IAIS has a fintech forum and is also monitoring the impact of technology developments on insurance and insurance regulation.  Another topic was operational resilience, which the IAIS has a Task Force on.  Firms need to be able to serve their customers properly, and to overcome financial crises. 

Among the big issues that need to be tackled were the cost of living crisis and the impact it has on vulnerable populations.  Management of risk was another broad bucket that was critical, including in the context of global warming.  International cooperation was another critical requirement going forward. 

In addition to CAFII members, there were attendees from the Canadian Life and Health Insurance Association, or CLHIA; the Travel Health Insurance Association, or THIA; and from insurance and financial services regulators and policy-makers from across Canada, including the following:

• The Financial and Consumer Services Commission of New Brunswick, or FCNB;
• Quebec’s Autorité des marches financiers, or AMF;
• The Financial Services Regulatory Authority of Ontario, or FSRA;
• The Insurance Councils of Saskatchewan, or ICS;
• The Alberta Insurance Council, or AIC;
• The Government of Alberta;
• Alberta Treasury Board and Finance, or ATBF;
• the Financial and Consumer Affairs Authority of Saskatchewan, or FCAA;
• the Government of British Columbia;
• the Insurance Council of British Columbia;
• the British Columbia Financial Services Authority, or BCFSA; and
• the Government of Nova Scotia.

The IAIS Website can be accessed here: https://www.iaisweb.org/

Links to Relevant Resources:

IAIS:

IAIS Year in Review 2022

IAIS Year in Review 2021

DEI stakeholder session, 9 February 2023

IAIS Stocktake on Diversity Equity and Inclusion (iaisweb.org)

Issues Paper on Insurer Culture, November 2021

Application Paper on the Use of Digital Technology in Inclusive Insurance, November 2018

Issues Paper on Increasing Digitalisation in Insurance and its Potential Impact on Consumer Outcomes, November 2018

Issues Paper on the Use of Big Data Analytics, February 2020

FCA:

FCA’s Consumer Duty

Sustainable Insurance Forum:

Sustainable Insurance Forum

At a reception following CAFII’s 4 April, 2023 Board meeting, held in-person in Toronto, Kartik Sakthivel, Global Chief Information Officer, LIMRA and LOMA, made a well-received presentation on broad technology trends. He emphasized looking not at what technology can do, but the customer experience and what customers want.  He repeatedly emphasized that output from data is worthless if the underlying data are not accurate and correct.  He also noted that younger generations have a great facility with technology and there is a need for businesses to recalibrate their approach to these customers, and to realize that they will face social media backlash if they do not perform up to expectations.

Kartik Sakthivel also emphasized that IT and data are not just technology department priorities, they are business-wide priorities.  The amount of data available to analyze is massive, and new developments in artificial intelligence have the capacity to disrupt businesses.  ChatGPT is the fastest growing consumer application in human history, and reached one million users in 5 days, and 100 million active monthly users in January 2023, just two months after its launch.  He noted the dangers to this new technology, however, and cited the example of two AI programs that mutually invented a new language that only they could understand.  The creators of those programs literally had to unplug them in order to contain the potential threats this development posed.

But returning to a constant theme, Kartik said that a great AI platform with bad data will lead to an awful AI experience.  Business leaders need to enhance their skills at what he described as “data literacy.”  He identified five steps to data literacy:

1. Make data an enterprise priority;
2. Communicate from the CEO on down;
3. Think global, act local;
4. Train and educate employees;
5. Engage and empower employees.

The presentation has been posted on the CAFII website and can be found here:

Download Presentation (PDF)

CAFII held a webinar on mental health issues in the workplace on 30 March, 2023 with Paula Allen, Global Leader, Research & Total Wellbeing, TELUS Health; and Nigel Branker, Chief Executive Officer of Securian Canada, and a CAFII Board member.  This is the second webinar on this issue that CAFII has held.   

Paula Allen started the webinar off by citing research that indicates that there was a massive negative mental health impact in the beginning of 2020 due to the pandemic, which produced conditions that the human mind does not like; and that since those increases in high risk were noted in 2020, there has not been an improvement.  In 2019, 19% of workers were categorized as “high risk”; that number jumped to 35% in February of 2023. 

Nigel Branker noted that he was a former colleague of Paula Allen’s at Morneau Sobeco/LifeWorks (predecessor to TELUS Health) and was very pleased to be on a panel with her.  He noted that mental health issues were a primary driver of lost hours in the workplace, and that the workplace is a critical space to help people with mental health issues.  Paula Allen noted that productivity improvements require attention to mental health issues in the workplace. 

Nigel Branker said that organizations need to look at root causes of mental health issues, as opposed to just having programs to help people who have fallen through the cracks.  Workloads have to be looked at, as well as workplace flexibility including working from home.  Commutes are long in Toronto and elsewhere in Canada, and that has an impact on people’s quality of life.  Some people are also not comfortable with returning to the office because of inclusivity issues. 

Progress has been made, Mr. Branker said, in removing the stigma around mental health issues, but much more needs to be done, and many employees do not take advantage of existing programs out of a concern it could impact on their career prospects.  Paula Allen said that stigmatizing people is harmful, and prevents people from seeking help.  Also concerning is that young people have more concerns around mental health issues damaging their careers than older workers.  As well, senior leaders disproportionately feel that revealing mental health issues would impact their careers, and that the values of the company around supporting employees do not apply to their level of seniority. 

Nigel Branker said that someone in the organization who is a high performer but not aligned with the organization’s values can do a lot of damage, and that an organization should not tolerate behaviours that harm other employees.  He added that there are a lot of systemic issues in the workplace that can be addressed.  Paula Allen said that managers need to be trained in these issues so that they can be better prepared to handle them when they arise.  Nigel Branker added that executives give very tangible sales and other targets to employees, and that a similar discipline is required around supporting employees’ mental health in the workplace.

Paula Allen noted that women are more likely to want to work from home, and that the commute for younger people and new Canadians may be longer, as they may live further from where the business is located.  This could result in a less diverse group being in the office physically; and that, in turn, could have impacts on networking and career prospects for those who work from home. 

Paula Allen and Nigel Branker said that financial uncertainty in the economy at this time is also leading to additional stress and mental health issues.  Nigel Branker agreed that financial stress is one of a large number of contributors to mental health issues today.  Both panelists concluded with a call to action by employers to continue to commit to doing better around addressing mental health issues in the workplace. 

There were attendees at the webinar from allied industry associations CLHIA and THIA, and from regulator and policy-maker organizations including:

• The Financial and Consumer Services Commission of New Brunswick, or FCNB;
• The Canadian Council of Insurance Regulators, or CCIR;
• the Insurance Councils of Saskatchewan, or ICS;
• the Alberta Insurance Council, or AIC;
• the Government of Alberta;
• Alberta Treasury Board and Finance, or ATBF; and 
• the British Columbia Financial Services Authority, or BCFSA.

The poll results can be found here:

https://www.cafii.com/wp-content/uploads/2023/04/CAFII-Webinar-March-30-English-Poll-Results.pdf