June 26, 2007


To: GA, AGA, National Accounts and advisors operating in the Province of Newfoundland & Labrador

As you may be aware, the Government of Newfoundland and Labrador has released a consumer protection document entitled Principles for the Sale of Insurance (Principles). These Principles and the accompanying press release can be accessed directly through the government's website.

This one-page document must be provided to a purchaser of an insurance product in Newfoundland and Labrador. The Bulletin does not provide any detailed clarification on the use or application of the document, it simply sets out the expectation that the document must be used "as is" with no modification. Specifically, it indicates that:

  • the document must be provided to an insurance consumer on the delivery of the contract and with any renewal or cancellation notice;
  • the document cannot be edited but must be printed in its entirety;
  • the industry should begin the process of implementing the document and the principles therein immediately; full compliance is expected by July 1, 2007;

Upon review of this document you will notice that some elements within the document may not apply to life insurance. However, one important element is that "consumers have the right to know compensation arrangements ... including the amount of commission being paid for the transaction."

Standard Life respects the right of clients to ask for additional information. Should a client ask for this information, our Regional Centre would be pleased to work with you in order to both satisfy the client’s inquiries and comply with the spirit of the principles.

Please keep in mind that the intent of this document is to inform consumers of insurance products of their right for information. The Advisor Disclosure Reference Document developed in 2005 by the CLHIA in cooperation with various industry groups, when used at the point of sale, provides clients with good and meaningful disclosure, and is in substantial compliance with this requirement. However, the advisor disclosure, made at point of sale, does not replace the requirement to provide the client with the principles.

We encourage you to provide the Principles for the Sale of Insurance document to your clients, in addition to any other disclosure that you are already providing, to ensure that:

  • clients are aware of their right for information;
  • clients have adequate information to fully understand their new product; and
  • you are in full compliance with regulatory requirements.

 

The following links will provide you with further information:

News release: http://www.releases.gov.nl.ca/releases/2007/gs/0125n05.htm
Principles: http://www.releases.gov.nl.ca/releases/2007/gs/0125n05principles.htm
Advisor Source: http://advisors.standardlife.ca/en/index.html
Advisor Reference Document and Sample Letter: http://advisors.standardlife.ca/en/tools/reference/compliance.html