How we act matters

The insurance industry continuously goes through cycles of soft markets followed by hard. It’s the hard markets that tend to cause the biggest strain with respect to ethical conduct. Currently, the industry is going through one of the hardest markets in recent memory and brokers are feeling the challenge. But it’s important to understand that these times will pass and how we deal with the current situation will define us as an industry.   

This year marks the 40^th anniversary of RIBO – the self-regulatory body for insurance brokers in Ontario. RIBO regulates the licensing, professional competence, insurance related financial obligations, and ethical conduct of all independent general insurance brokers in the province. The creation of RIBO was deemed necessary as a response to a changing legal environment around consumer protection and included a Code of Conduct which is, at its core, a code of ethics. It provides a standardization of what is right and wrong in the broking profession.  

RIBO’s code provides a clear definition of what is right and wrong. It removes the uncertainty and replaces it with a practical set of ethical obligations based on a uniformly accepted concept of right and wrong. It covers ethical obligations regarding personal accountability, conflict of interest, confidentiality, discrimination, obligation, honesty, equity, and fairness.

This is how it protects the public. And as a bonus gives brokers the cachet of professionalism.

Of course, the designation of “professional” is a double-edged sword. Brokers are now held to a higher standard of business conduct. If you don’t understand your obligations under the code, you are more likely to deviate from the code at some point. 

A review of complaints made under RIBO’s Code of Conduct shows that there are generally three main types of offences.

There is the deliberate wrong-doing or Malfeasance complaints. Human nature being what it is, this isn’t that surprising and likely not avoidable.

The other two are “failing to act” – omission – and acting incorrectly – error. These are the ones should not happen. They could be avoided through a thorough understanding of the Code of Conduct and through knowledge and, yes, competence. RIBO is very clear in its position that ignorance is not accepted as a defence in the event of a complaint.

Brokers should remind themselves of the RIBO Code of Conduct. It’s important to the profession and the industry should be encouraged to review the Code of Conduct regularly. Whether it’s a hard market or a soft market how the insurance industry acts is important. To review the Code of Conduct, click on the link below.