Sunday, December 9, 2012

(No.222) CISRO, the AMF & a new LLQP: cui bono?

CISRO, the AMF and a new LLQP life insurance licensing regime:
to whose benefit?

by Alastair Rickard

In early October I wrote a column (No.216) "CISRO's 'harmonizing': life insurance licensing revisited", expressing my scepticism about the wisdom of the proposal from the life insurance regulators who comprise CISRO (the Canadian Insurance Services Regulatory Organizations) to introduce a new modular regime (exams and content) to be developed by Quebec's AMF (the Autorite des marches financiers) for use in both Quebec and the common law provinces.

It has been dubbed "the Harmonized Life Insurance Licensing Qualification  Program". It would replace the existing content and exam of the LLQP program (the Life Licensing Qualification Program).

Regulators like those in CISRO know, both through instinct and experience, that it is easier to win an argument when you get to frame it yourself. Following the presentation by CISRO of this plan to industry and other stakeholders in July as an implied fait accompli it seems to have taken a while for those affected to focus and push back.

This too is one of the several parallels with what occurred when the regulators came down from the mountain more than a decade ago with their initial approach to the original LLQP.  I was a somewhat reluctant participant in the lengthy process involving regulators and industry reps which followed.

Among the 14 approved LLQP course providers I am aware of only one which seems in favour of the new CISRO plan for an AMF-designed 'LLQP mark II'. In comparison with the July tabling by CISRO of their holy tablet, an October letter to all 14 LLQP providers from Saskatchewan's Ron Fullan, the lead regulator on this file, was considerably less peremptory in tone and worked at appearing somewhat conciliatory.

The opposition to the proposed new approach seems to range from serious doubt to vigorous opposition. My guess is that most would welcome enhancement of the existing LLQP content but oppose a new AMF-designed modular regime on the exiting Quebec model to be imposed on the common law provinces. This all the more so because the existing AMF life insurance licensing regime in Quebec has not produced results superior to the LLQP, i.e., results to which LLQP course providers might at least have cause to aspire.

In a nutshell many of these providers and stakeholders wonder: why complicate and make it more expensive and difficult for those in the common law provinces who might seek to become licensed to sell life insurance when a proven licensing regime (the LLQP) already functions and is in place, one which followed a lengthy process in which stakeholders were directly and materially involved? Cui bono? To whose benefit?

As I pointed out in my previous column on this subject, a core element of the answer involves more money and funding from applicants and stakeholders to provincial government licensing programs and agencies -- not improved licensing standards.

I speculated previously and continue to be interested by Quebec's "involvement with a supposed 'harmonization' of the Quebec [licensing] system with those of other provinces" and that this deal with the common law provinces on a new national licensing regime "may well run afoul of the recently elected PQ minority government (including ... the removal of Quebec's unique CGEP requirement as part of the 'harmonization' deal with CISRO). This separatist government, including its Finance Minister Nicolas Marceau, may not be all that keen on any 'harmonization' of a unique Quebec system with that in the common law provinces ...."

Minister Marceau is a former university professor and a committed sovereignist. The AMF exists within Revenu Quebec -- his ministry. Because of the new PQ government's minority status in the Quebec legislature the minister and his premier Madame Pauline Marois have had to abandon or dilute several of their separatist-related election positions.

I find it interesting that Quebec's Finance Minister Marceau (if indeed he is even aware as yet of the deal the AMF has negotiated with provincial insurance regulators outside Quebec) would allow the replacement of a licensing regime developed by and unique to Quebec by one that will necessarily have to accommodate and be diluted by at least some of the needs and desires of English-Canadian regulators.

The intention is that development and implementation of this new process is to stretch over a three year period. I think it is a fair bet that at some point sooner rather than later Minister Marceau may well be asked about this action and policy change vis-a-vis the PQ government's approach to the other provinces of Canada; also to clarify the muddy water around its lack of harmony with the commitment he and his PQ cabinet colleagues have made to enhancing, not diminishing Quebec's approach to sovereignty.




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