The Canadian Association of Independent Life Brokerage Agencies (CAILBA) is stepping up its efforts to become the accepted and recognized representative association of managing general agents (MGAs) in Canada. Its goal is to sign up the majority of MGAs across the country in order to represent a unified industry to the regulators and the insurance companies.
David Prince, President of the association, says that it currently has few members, but all are very large and significant MGAs. He says he suspects that its members account for a large portion of the total national sales. To find out for sure, CAILBA is completing a survey of its members to determine the production power of the association as a percentage of the industry.
The outcome, if the numbers support the assumption, will be used to raise CAILBA’s presence and involvement during industry discussions with regulators and insurers. “We want regulators and insurance companies to listen to us more, and recognize us as a stake holder,” explains Mr. Prince.
Already CAILBA is becoming increasingly active at the table. Mr. Prince says Alberta regulators recently invited it to participate in its discussions regarding life licenses. (The Canadian Insurance Self-Regulatory Organization (CISRO), headed by the Alberta Insurance Council, is currently working on a new life licence examination for all provinces except Quebec.) “We’re becoming more involved and important in the industry,” Mr. Prince says.
Expanding its political strength will also serve to attract the smaller MGAs to the association, adds Mr. Prince.
He says CAILBA was regarded as an elitist association, but it has evolved. Now, “we have to speak on behalf of all MGAs,… and they can have a voice in their association.” Even the Quebec MGA association, the Association des cabinets gestionnaires de courtage en assurance de personnes du Québec (ACGCAPQ) has become a member.
Among the advantages of being a member of CAILBA, which include specially designed errors and omissions insurance and insight into new regulations and compliance issues among others, is access to a “debt list.” The debt list is a list of brokers who have a debt with an MGA. The list is a controversial issue for many brokers, says Mr. Prince, but finds that it is a valuable asset to its members.
As an MGA is financially responsible for the brokers, MGAs have to pay up when policies are cancelled and charged back to the broker, and the broker refuses to pay. “This is a massive problem to MGAs. The current total is in the seven figures since the association was formed,” reveals Mr. Prince. The list is a way for MGAs to be aware of, and warn others of these brokers.
Another important initiative of CAILBA is its annual national conference. It is the only congress put together for distribution, Mr. Prince says. It gets all the MGAs and insurance companies, as well as regulators, to discuss the issues relevant to the industry. This year’s conference, entitled «Delivering On The Value Proposition» is in September, in Toronto. The issues, says Mr. Prince, are the future of distribution, and developing common administrative platforms.
The future of distribution is a concern stemming from the threat of consolidation, he explains. “Claude Garcia of Standard Life has agreed to speak on the insurance company’s view of distribution. We will have other speakers providing their viewpoint of the future of distribution and also the important issue of how IT will shape our industry.”
The development of a common administrative platform is key to the profitability of the MGA, and one of the reasons CAILBA has joined the Canadian Life Insurance EDI Standards Association (CLIEDIS). “Now we have to deal with multiple applications, underwriters, and software systems for each company. We want to bring them together,” he says. “Every company thinks its application is the best one. They have to come together and find common ground.”
Support in the industry for these standards is encouraging, he continues. “We were pleased to get a letter of support for this particular initiative from BRM. They are the first consolidator to do this.” BRM’s involvement (now under the banner of Balanced Planning Financial Group) in CLIEDIS comes via its purchase of Balanced Planning and Investment Centre, which was already a member.
“Our membership drive is in full swing as we try to attract new MGA’s to join our association,” Mr. Prince continues, “we are the only national body that represents the interests of the MGA distribution channel.” He says he expects the survey to be completed by the end of May.
