post

Ban on Insurance Referral Fees Now in Force

February 15, 2023

read

Ban on Insurance Referral Fees Now in Force

At the end of June of 2020, we published an article addressing the issue of insurance referral fees and whether or not Wynford received referral bonuses or other types of referral compensation.

Does The Wynford Group receive referral fees? No.

As we mentioned previously, The Wynford Group does not receive “referral fees”, kickbacks, or any other remuneration related to placing insurance on behalf of our clients. Furthermore, Wynford does not receive referral fees from any 3rd party vendor, and we intentionally remain at arm’s-length from all service providers. As Agents working on behalf of our clients, this is intentional, and it is critical we have zero conflicts of interest.

Read the whole article here.

To provide additional context and updates to this matter, it should be noted that on Friday, September 4, 2020, the BC Provincial Government has officially banned the payment of insurance referral fees to anyone who is not an insurance licensee, including strata managers and strata management brokerages. Below is a copy of this notice sent out to Strata Managers by the Real Estate Council of British Columbia.

On Friday, September 4, 2020, the Province approved changes to the Financial Institutions Act prohibiting the payment of referral fees to strata managers for the sale or renewal of strata property insurance. The changes came into force immediately, meaning that the practice of paying referral fees is no longer permitted. Insurance agents are now prohibited from paying referral fees or compensation for the sale or renewal of strata property insurance to anyone who is not an insurance licensee, including strata managers and strata management brokerages.

Other changes include new disclosure obligations for insurance agents and insurers related to the notification periods for any cancellation or renewal period change to a strata insurance policy, in addition to compensation disclosure requirements regarding strata insurance. The new disclosure obligations will come into force on November 1, 2020.