Understanding Bill 30
Recently, there’s been a lot of talk in the insurance community about Bill 30. This bill is seen as a blessing by some and as a step backwards by others. What does it all mean? And what exactly does it mean for consumers?
Shopping around and signing up for insurance
Let’s go back to basics for a moment. When shopping around for a specific insurance need, whether it’s home insurance, car insurance or something else, we deal with a broker or an agent.
Brokers work with several insurance companies and can help you compare quotes. Agents, on the other hand, usually work for a single insurance company.
Brokers or agents will talk with you to better understand and assess your needs, such as the type of coverage you need, your budget, etc.
Why is Bill 30 such a hot topic?
Among other things, Bill 30 amends the Insurers Act and the Act respecting the distribution of financial products and services.
One of the proposed changes to the Act respecting the distribution of financial products and services would be to withdraw authorization for distributors without insurance representatives to sell replacement insurance policies.
This change is aimed at automobile, RV and leisure vehicle dealers, whose profits would be significantly reduced.
But why?
According to the Report on Financial Institutions, when consumers do business with a vehicle dealer, they typically pay about $500 more for the same replacement insurance product when they go through a car dealer than when they go through a broker. They’re also more likely to be denied coverage altogether in the event of a claim. In an interview with RPM, an APA representative tells us that a proper insurance salesperson earns about 12% commission on an insurance product. On the other hand, according to the same source, this commission can be as much as 35% to 50% for an insurance product through a dealership.
This discrepancy may be due to the current shortage of vehicles. Therefore, dealers have additional leverage and can afford to put pressure on their customers to purchase insurance. In some cases, when buyers reject the dealer’s insurance proposal, they may be implicitly denied service.
Bill 30 would therefore protect consumers from such situations.
What is Bill 30?
Bill 30 aims to amend several laws relating to insurance in Québec. Its main aim is to modernize and adapt the rules governing insurance contracts in the province.
Here are some of the changes that will occur if this legislative proposal is passed.
Consumer protection
Dealers will no longer be able to sell replacement insurance.
As a result, consumers will now be able to decide each year whether or not they still need it.
Insurers will have to provide clearer information about their insurance products, consumer rights and claims procedures.
Insurance documents must be written in plain, easy-to-understand language.
Rate regulation
The bill gives authorities more power to monitor and regulate insurance rates to ensure that they remain fair and reasonable.
Simplifying the claims process
The project will introduce measures to make the claims process simpler and more efficient for policyholders.
Legal protection
Policyholders will have greater recourse in the event of a dispute with their insurer.
Best practice guidelines
Insurers’ commercial practices will be more strictly regulated to prevent abuses.
Data protection
Insurers will be required to protect policyholders’ personal information and use it responsibly.
Adapting to new realities
The Bill seeks to take account of new technologies and developments in the insurance sector.
Protecting policyholders
In short, Bill 30 seeks to improve transparency, consumer protection and efficiency within the insurance industry. It aims to balance the interests of policyholders and insurers, while ensuring that practices are fair and in line with contemporary standards.
Our advice is to always do your homework before you buy insurance. Take the time to read your policies carefully and review them as necessary. Don’t hesitate to contact us if you need further advice!
