Table of contents
In this first article, I will draw an overall picture of the insurance industry in Canada so that you have a better overview of the history and market of the industry. However, I will focus my information on the health & life insurance industry market as the main one to avoid the article being too broad and rambling.
A- History of the insurance industry in Canada
Do you know that the insurance industry in Canada is older than Canada?
Prior to the Confederation of Canada in 1867 (the year that marked the formation of the Dominion of Canada), foreign businesses dominated the life and fire insurance market share in the British colonial provinces, including those that make up present-day Canada. These businesses mainly provide insurance services in the maritime sector. In 1804, the Phoenix Company of London first opened a branch in Montreal (which is present-day Toronto), offering fire insurance, marking the beginning of the insurance industry in Canada. During this time, local companies also began to spring up and develop a variety of other insurance services. However, it was only in 1868, after the three British colonial provinces merged into the Dominion of Canada (now known as the Dominion), that the Dominion Insurance Act was established. This law officially marks the strong development of the domestic insurance industry due to strict laws on the protection of policyholders, including the requirement that insurance service providers must have business licenses to meet the stricter conditions of this law.
Thus, it can be seen that the insurance industry in Canada with a history of more than 200 years and the Insurance Act with a history of more than 150 years has been constantly changed and adjusted in accordance with the changes of society, which has helped Canada’s insurance industry become solid and develop as it is today.
Royal Insurance Building in Montreal in 1864
B- Market overview of the current health & life insurance industry
With such a long history, it is not strange if you know that the number of life and health insurance providers in Canada is about 150 businesses, as of 2022. In which, about 94% of businesses have existed for more than 50 years. Thus, it can be seen that the insurance market in Canada is very stable due to its long history. Over the past 10 years, total benefits payments for life, health, and retirement insurance have increased by 60%, to $113 billion in 2021. Although these businesses process hundreds of millions of claims each year, the complaint rate is only 1 in 100,000 claims. This figure clearly shows the stability of the insurance industry in Canada.
Source: http://clhia.uberflip.com/i/1478447-canadian-life-and-health-insurance-facts-2022-edition/5?
C- Insurance Industry Management System in Canada
This is an extremely important point that I think few customers really care to learn. I think whether a product / service industry is really successful in a country or not will depend extremely much on the management system (including laws) of this industry in that country. And this is also the reason why I am confident to embark on this profession that everyone considers “very difficult” even though I have only entered Canada for a long time. That’s thanks to Canada’s extremely strict insurance industry management system with very solid consumer protection laws. However, not all customers understand and take full advantage of these advantages. Therefore, there are quite a lot of customers, especially Vietnamese, because of language limitations but are “bullied” because they do not understand the rules. However, I will write about issues related to the law to protect insurance buyers in another article.
Here are the important organizations that regulate the insurance industry in Canada:
1. Office of the Superintendent of Financial Institutions (OSFI)
OSFI is responsible for managing and supervising federally managed life insurance companies, property and casualty insurance companies, including their affiliates, foreign subsidiaries, associates, and mutual companies.
2. Canadian Insurance Service Regulatory Organizations (CISRO)
Canadian Insurance Services Regulatory Organizations (CISRO) is a forum of Canadian regulators, created with the goal of building consistency and ensuring the business standards of intermediaries in the insurance industry. CISRO’s mission is to collaborate on government initiatives to support consumer protection, through regulations for industry intermediaries.
3. Canadian Council of Insurance Regulators CCIR and Provincial Insurance Regulatory Agencies
The Canadian Council of Insurance Regulators (CCIR) is an association of insurance regulators that provides a forum for these agencies to strengthen oversight of the industry in Canada.
The goal of CCIR is to facilitate and promote the effectiveness of the insurance management system in Canada to serve the public interest. Members work together to develop solutions to common legal problems.
The council will comprise the Insurance Regulators of each province. For example, these agencies are in some of the following provinces:
– Alberta: Superintendent of Insurance
– British Columbia: BC Financial Services Authority (BCFSA)
– Saskatchewan: Financial and Consumer Affairs Authority
– Manitoba: Financial Institutions Regulation Branch (FIRB)
– Ontario: Financial Services Regulatory Authority of Ontario (FSRA)
– Quebec: Autorité des marchés financiers (AMF)
After the above organizations, maybe you guys are a little tired, right? However, this is the first and foremost organization that all insurance customers need to know and remember.
OLHI is an organization that provides free, independent and fair services to Canadians in resolving disputes between customers and insurance companies. If there is any dissatisfaction and a dispute arises with the insurance company, the first organization you should approach is this organization.
In addition, there are some other organizations involved that are briefly summarized as follows:
- Office of the Privacy Commissioner of Canada: provides legal advice and information to all individuals for the purpose of protecting personal information.
- Financial Transactions and Reports Analysis Centre of Canada (FINTRAC): The organization’s primary mission is to combat money laundering and counter-terrorism through financial transactions in Canada.
- Assuris: is an organization that protects policyholders, guarantees the implementation of benefits in products issued by life insurance companies in Canada. For example, if an insurance company in Canada goes bankrupt, Assuris will arrange for another company to buy the bankrupt company or pay benefits to these customers when they reach the compensation period if there is no acquiring company.
I would like to pause the article here because it is already long. In the next part 2, I will write about the overview of organizations providing life & health insurance services in Canada.
Sarah Do
Life and Health Licensed Insurance Agent