CADRI Code of Conduct

Preamble

Direct marketing of property and casualty insurance enables consumers to buy directly from the insurance company, a sales method commonly known as “direct response”. Direct response has found widespread consumer acceptance and is now the fastest growing sales channel for property and casualty insurance in Canada. The Canadian Association of Direct Response Insurers (CADRI) was formed in 1997 as a result of this substantial growth in our industry.

CADRI’s objectives are to ensure that consumers have access to the insurance market through direct response, promote the benefits to consumers of direct response purchasing, and maintain the highest standards of consumer protection. This Code was developed to set clear standards of conduct for CADRI members.

Application and Scope

This Code applies to all CADRI members, and members are also responsible for parties carrying out work on their behalf.

General Principles

The following principles will guide interactions with consumers:

• Representatives must place the interests of policyholders and prospective purchasers of insurance ahead of their own interests;
• Accuracy and clarity in all communications and accountability for all materials carrying our company name, regardless of who produced them;
• Disclosure of all pertinent information relating to insurance contracts, including any potential or actual conflicts of interest that may exist;
• Product suitability;
• Compliance with all applicable laws.

Communications

Each member shall:

• Provide sufficient information for the client to contact the insurer (by telephone, internet, mail or fax as appropriate); and
• Ensure that all communications initiated by the insurer are truthful, use clear and straightforward language, and are not misleading in fact or implication.

Fulfilment

Written or electronic confirmation of coverage and other product details shall be provided to the consumer in a timely manner and include all pertinent information about the insurance purchased.

Advice on Products and Services

Provincial laws vary with respect to the activities that must be performed by a licensed insurance agent. For example, giving advice to clients about their insurance needs is generally an activity that requires a license, while handling routine information requests is not. In addition to meeting all provincial licensing requirements, member companies will ensure that their representatives are fully trained.

Focus on Consumer Protection

CADRI members will adopt procedures designed to protect consumers in the following areas.

• Representatives will apply due diligence to ascertain the needs of clients in a professional manner and recommend products and services that are suitable to meet those needs.
• Member companies will follow and establish a complaint protocol, accessible upon request.
• Member companies will respect consumers by complying with regulations and industry voluntary codes that limit the hours of telemarketing.
• Member companies will ensure that any potential or actual conflicts of interest are disclosed to consumers in a timely manner.
• Member companies will comply with federal and provincial privacy legislation governing the collection and use of personal information.

Training

CADRI members will make sure that their representatives are qualified, competent and professional. This means that they will be knowledgeable about:

• insurance products;
• their company;
• this Code of Conduct; and
• privacy requirements.

Quality Assurance

Insurers will maintain procedures to review the accuracy of information being conveyed to consumers by their representatives, the overall professionalism of their representatives, and their performance with respect to this Code.

January 2007