2010 Major Issues: IBANS

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Focus on Nova Scotia

By Alex Vizer on April 15, 2010

Challenge to Nova Scotia’s Minor Injury Cap: Nova Scotia’s Court of Appeal dismissed yet another challenge to the province’s $2,500 minor injury cap–upholding the cap. In the Hartling v. Nova Scotia decision, released Dec. 15, 2009, a Supreme Court panel set aside appeals to an earlier Supreme Court of Nova Scotia decision that deemed the cap constitutional. In making their decision, the panel underscored the cap legislation’s original intent–to reduce skyrocketing insurance premiums, not to protect accident victims, as the appellants claimed.

The Independent Brokers Assocation of Nova Scotia (IBANS) was pleased with the ruling, stating that the cap seems to work effectively. Their argument supporting the cap is that the widespread displacement of automobile business in the province has disappeared and the rating structure for the product remains constant, even six years after the introduction of the cap. Support of these results comes from obervations of IBANS members, who report that since the implementation of the cap in 2003, brokers living and working in the area were not receiving complaints from their clients with respect to the cap. The Insurance Bureau of Canada (IBC) also welcomed the recent decision to uphold the cap. However, Premier Darrell Dexter, stated that his government was committed to scrapping the province’s $2,500 cap and is continuing with an ongoing provincial review of the cap despite the court decision. The Ministry of Finance said it would release a discussion paper on the cap before the end of 2009, with an eye to draft legislation–if necessary–by spring 2010.

Ken Myers, IBANS president

Banks Selling Insurance: Although bank’s were explicitly told, by the Federal Finance Minister, that they couldn’t sell insurance through their online portals, this issue will probably reappear in 2010. IBANS is ready for this fight.

Forest Fires: In April 2009 a devastating forest fire burned through an area of suburban Halifax. Homes were damaged and thousands of residents were forced to evacuate their homes. IBANS, its members and the regional office of RSA knew the importance of being present during this time. Members could be found at community information sessions and at various shelters–and the industry was able to provide much-needed information about coverage, while offering support. This type of community participation will be essential for independent brokers going forward.

IBANS Campaigns
Raising the Broker Profile
Prompted by the recent growth in the number of different channels that consumers can now use to purchase insurance, IBANS undertook several initiatives to reinforce the role of the independent broker in the insurance transaction. These initiatives include:

(1) Step Licensing: IBANS worked very hard with the provincial superintendent of insurance to launch a step-licensing regime that is tied directly to the CAIB degree. Now a three-step process that involves direct peer supervision, this change to licensing ensures that consumers consistently deal with a trained insurance professional.

(2) Insurance Broker Month: Every April, the premier reads a proclamation read from the floor of the provincial legislature announcing “Independent Broker” month. Throughout the month IBANS sponsors media releases while graduation ceremonies of new brokers are highlighted along with the annual awards banquet.

Perpetuation of the Broker
Over the last few years IBANS has seen a decrease in their membership numbers because of mergers and acquisitions. If this trend continues, the independent broker channel will lose its status as the largest distribution method of P&C insurance products. In order to combat this trend IBANS has embarked on several initiatives:

(1) Continuing Education: IBANS feels strongly that by promoting education they can aid current brokerage principals in building the necessary talents within their offices to promote succession from within.

(2) Grooming the Next Generation: In 2006 IBANS formulated a Young Broker Committee (YBC) that had the mandate of allowing young brokers to interact with the various members of the industry as well as their peers. These individuals will become the leaders of tomorrow so IBANS has continued to place a concerted effort in developing this network. IBANS is pleased that the membership today stands at over a hundred strong and continues to grow.

(3) Improving the Business Climate: At the federal level, IBANS is working in conjunction with IBAC and the CFIB to defer the tax on the sale of a business, within the family, and to raise the capital gains exemption to $1,000,000 (CDN). These initiatives will allow perpetuation within the family to take place more smoothly as some of the taxation burden will be postponed until the brokerage leaves the family.

Reach out to Not-For-Profits
IBANS is working hard to ensure that not-for-profit organizations know that insurance brokers in Nova Scotia can provide the choice and expertise necessary to satisfy their requirements. We plan to assist, where possible, in the education of not-for-profit organizations in issues related to insurance, as well as to educate our members on the specific and unique needs related to these types of organizations.