Saskatchewan has introduced a new restricted auto license allowing unlicensed motor license issuers that work in a brokerage to sell extension auto coverage throughout the province.
The move effectively streamlines the process in a broker’s office, so that the public will have better access to extension auto coverage. Take-up rates for auto extension coverage in the province are lower than those in Manitoba, a neighbouring province with a comparable public auto insurance system, according to the province’s broker regulator. (Statistics were not available at press time.)
In Saskatchewan, “plate insurance,” a base insurance product, is sold along with a person’s license at a brokerage. Plate insurance includes a $700 deductible and a $200,000 liability. Brokers routinely try to interest clients in purchasing more coverage through extension policies.
Motor license issuers working in a brokerage do not need a broker license to sell plate insurance. The Auto Fund had 400 motor licence issuers in 300 communities across Saskatchewan in 2011.
However, motor license issuers do need a broker license to sell “extension” auto coverage, which is sold by private insurance companies and allows people to change deductibles and liability limits.
Motor license issuers are not licensed to discuss auto extension coverage with buyers, so they must pass consumers along to a licensed broker in the office who can discuss the extension product. As a result, consumers would say, ‘No thanks, not today,’ and leave the office with just the basic plate insurance.
Motor license issuers balked at taking their Level I broker’s license – or brokers did not feel the need for issuers in their office to get a Level I license – because that involved learning about home and commercial insurance.
“I have front-end people who can do the plate insurance, but I’m not going to go out and get them Level I or II or III licenses, because then you can do home or auto or commercial, and most people will never do that,” said one brokerage office manager, who asked to remain anonymous because she was not authorized to speak for her brokerage. “They’re just my front-line people selling you auto insurance.”
The General Insurance Council of Saskatchewan has created a restricted license that allows issuers a type of beginner’s license to deal only in auto insurance. To obtain the restricted license, issuers must pass a government bylaw exam, as well as a course offered by either the Insurance Brokers Association of Saskatchewan or the Insurance Institute of Canada.
“When someone is buying auto insurance, you want them to know what their options are,” Ron Fullan, executive director of the General Insurance Council of Saskatchewan, told Insurance Business. “You want the people who are selling the plates to be able to talk to consumers about the additional coverage as well so that the consumer knows what the options are and they are well-served.”
