Norfolk Mutual Insurance Company (“Company”), its Brokers and Agents are expected to act in accordance with the highest level of ethical corporate standards in the sale and distribution of insurance products.
We are committed to meaningful disclosure to consumers that is easily understood, relevant to the transaction, mitigates real or potential conflicts of interest, and is easily comparable in the marketplace of personal lines and commercial insurance products.
Our Brokers and Agents are expected to undertake a thorough client needs analysis before making any recommendations on particular products to consumers. The Company expects our Brokers and Agents to know their clients. Norfolk Mutual Insurance Company believes that assessing product suitability for the consumer, and documenting it, is of the utmost importance.
This Code of Business Practice (“Code”) sets out our established standards of business practices. Following this Code will ensure that our Brokers and Agents continue to earn our trust and confidence. Most importantly, they will retain the trust of the consumer.
In their contracts or agreements with Norfolk Mutual Insurance Company, our agents and brokers agree to abide by a number of ethical guidelines and to carry on business in a manner consistent with the highest standards of professional ethics. This Code, together with any codes of ethics issued by provincial regulatory bodies, reflects the high standards to which Brokers and Agents of Norfolk Mutual Insurance Company are expected to comply.
Norfolk Mutual Insurance Company expects that its Brokers and Agents will identify it as a company that they place significant business with. The nature of the business relationship should be disclosed to the consumer along product lines.
The Broker’s & Agent’s responsibility, authority, and relationship with Norfolk Mutual Insurance Company must be made clear when selling insurance products or services.
It is important that our Brokers and Agents provide sufficient information for the consumer to understand the basic business relationship between the Broker or Agent and the Company with respect to compensation. Specific dollar amounts are not required, but the consumer should have a basic understanding of how the Broker or Agent is paid.
Priority of the Client’s Interest
Our Brokers and Agents must be committed to providing the highest quality of personal service that can reasonably be expected. Honesty, fairness and service are hallmarks of the way the Brokers and Agents of Norfolk Mutual Insurance Company conduct business.
Information provided to the consumer must be clear, honest, relevant, factual and as complete as is practical. Our Brokers and Agents are expected to sell our insurance products and services on their merits, with a full description of the benefits and costs.
- Our Brokers and Agents must place the interests of policyholders and prospective purchases of insurance ahead of their own interest
- Our Brokers and Agents must act with integrity, competence and the utmost good faith
- Our Brokers and Agents must not take advantage of a consumer/client’s inexperience, ill health or lack of sophistication
The recommended product must always be suitable for the needs of the consumer. Norfolk Mutual Insurance Company expects that its Brokers and Agents will explain and document their reasons for recommending a particular insurance product. In situations where the product is offered without advice, they should inform the client that no advice is being offered.
We expect that our Brokers and Agents will carry out fact finding appropriate to the circumstances and complete an assessment of the client’s specific needs. This needs assessment should reflect the underlying risk, the client’s objective, and the complexity of the product being sold. A product recommendation should always meet the client’s identified needs.
Our Agents must explain why a particular product was chosen. We expect our Brokers to explain why a particular product was chosen over a wide array of others in the marketplace and demonstrate that the product is competitive.
It is important that the product recommendation be based on the suitability of the product for a client’s needs. This means Brokers must explain the availability of adequate or comparable substitutes. Brokers and Agents must also explain their relationship with the insurer.
Documentation and Client Privacy
To ensure the confidentiality and proper use of personal information relating to clients, agents must conduct business in accordance with the insurance company’s privacy code and the Personal Information Protection and Electronic Documents Act (PIPEDA).
This includes information that is gathered during the process of documenting the product suitability.
Our Brokers and Agents must maintain a written account of this process for purposes of the client file. This may include information gathered from the client; the needs assessment analysis; copies of any engagement letter; product comparison information presented to the client; intermediary disclosure documents addressing conflicts of interest; and any formal suitability letters presented to the client.
In addition, it is important that the client’s file be kept accurate and up to date to demonstrate that the analysis process is ongoing. In addition, the consumer has the right to request additional information, including your qualifications or the nature of your business relationships.
Remuneration & Rebates – Disclosure of Compensation for Services
Our Brokers and Agents must fully advise their clients of the nature of their relationship with Norfolk Mutual Insurance Company. If Norfolk Mutual Insurance Company has an interest in your business, you must divulge it.
Brokers and Agents will need to provide the client with enough information to understand that upon completion of the transaction the Broker or Agent will be remunerated by way of a commission that will be paid to you by Norfolk Mutual Insurance Company or your brokerage or agency. You should also advise that in addition to your sales commission at the time of the sale, you may receive a renewal or service commission if the policy is renewed.
In addition, it is important that the consumer be advised if the Broker or Agent is eligible for additional non-contractual compensation (cash or non-monetary incentives) based on other factors (such as volume of business placed with the Company).
Brokers and Agents shall not, directly or indirectly, rebate or attempt to rebate all or any part of a premium. They must not split commissions with, or pay any other form of compensation to any other person for soliciting or placing any product offered by the agent, unless that person is properly licensed.
Conflict of Interest
Situations must be avoided where your personal interests conflict, or might appear to conflict, with your responsibility to policyholders or the Company. The consumer must be provided with sufficient information to be able to assess whether or not a conflict of interest may be influencing the advice they are being given.
The need to disclose conflict of interest applies on an ongoing basis. In determining whether a conflict of interest might exist which would require disclosure, you must consider whether it would appear to a reasonable, informed person looking at the facts that you acted in the best interest of your client.
The client must be apprised of anything that could be considered to bias your advice.
The Broker or Agent must also consider whether your advice or the product offered would have been different if the situation or incentive giving rise to the potential conflict of interest did not exist. Some examples of perceived conflicts of interest might be company relationships or the nature of your compensation.
Our Brokers and Agents must not take advantage of their status with the Company or use confidential information acquired in the product suitability process to gain, either directly or indirectly, personal benefit for themselves or for others.
Brokers and Agents must ensure that their actions or decisions are free from any undue influence which might be regarded as conflicting with the interests of the consumer or of Norfolk Mutual Insurance Company.
Both Brokers and Agents are expected to make timely disclosure to the Manager or the Chairman/President of the Board of Directors, in writing, of all personal business, commercial or financial interests or activities where such interests or activities might create, or appear to create, a conflict of interest.
Our Brokers and Agents are authorized to solicit applications for such policies as Norfolk Mutual Insurance Company may issue. Brokers and Agents have such other authority as is expressly given by their contract with Norfolk Mutual Insurance Company, but they may not, on behalf of the Company, amend policies, waive policy provisions, or bind the Company by promise of agreement under any other circumstances. Brokers and Agents are obligated to provide full disclosure of information to the Company regarding applications or claims.
The assets of Norfolk Mutual Insurance Company consist of property and information to which the Company is legally entitled. This may include funds, facilities, equipment and supplies.
These assets are not to be used in any way for personal gain. This also applies to intellectual property and trade secrets such as client lists and software.
Compliance with Laws and Regulations
Brokers and Agents must comply with both the letter and the spirit of all laws and regulations governing their business. They must make every effort to become familiar with the insurance laws that are applicable to them.
Brokers or Agents who are under investigation by a regulator or the disciplinary branch of any professional organization must report that fact to the President/Chairman of the Board of Directors or the Manager/President of Norfolk Mutual Company immediately.
NOTE: Provincial regulations, if any, take precedence over this Code of Business