New Marketing Strategies For Your Insurance Company Have Arrived!

Do you have trouble finding new creative methods to market your insurance business? Have Insurance Act rules on Incentives, rebates and inducements been restricting your explorative opportunities? If so, this article may be for you!

Firstly, for those who are unfamiliar with the term Inducement, an Inducement is anything that persuades another individual to alter their behavior. For example, offering an object of monetary value to an individual to persuade them to choose one certain product over another.  

Previously under the Ontario Insurance Act, Inducements were prohibited within an insurance environment in any form, which has played a significant role in how individuals in the insurance industry conduct the marketing strategies of their business. An Inducement is a business tactic that aids marketers to better display and differentiate their product from other competitors to their consumers, while strengthening consumer-business relationships. For the sake of the benefits derived from this tactic, other Canadian provinces such as Alberta have little to no restrictions against the use of Inducements by Insurance companies. 

A prominent example of the prohibition of Inducements is within the recent Bell Canada v. lNL3D Distributing Inc. Case, which took place in Federal Court. Investigations in this matter lead to the discovery of several Insurance regulations being broken by INL3D through the sale of unauthorized IPTV service, which facilitated unauthorized access by Canadian users to content. In this case, the largest challenge for INL3D was to attempt to defend their prohibited use of inducements. Eventually, the Federal Court found INL3D guilty of inducement because they knowingly offered inducements to convince the wholesalers to buy the boxes. The inducement offered here was in the form of exclusive monetary deals and prices attached to the products, which induced the wholesalers to make a purchase on the box that they were weary of.  

Opportunely, we can inform you that this constrictive rule is about to change! On December 20, 2021, the Financial Services Regulatory Authority of Ontario submitted their proposal for a new Unfair or Deceptive Acts or Practices document to the Minister of Finance. This is to replace and strengthen the supervision and laws of conduct within the current Insurance Act. This includes Inducements being permitted in all sectors other than the Health and Life Insurance Department, unless the inducement is used to sway the consumer to make a decision that would be of a detrimental nature to what they are trying to achieve.  

Once approved, insurance companies will be able to bring to light a variety of new strategies to market their services, but still must remain cautious about the way they offer an inducement to consumers.  

We can aid you in the process of marketing your insurance business while guiding you through the legal guidelines and regulations surrounding the proposed marketing methods. This material is for informational purposes only and should not be relied upon as legal advice. To book a consultation with Buzaker Law Firm regarding marketing or expanding your business in Ontario, contact us at: info@vblegal.ca or (905) 370 – 0484 

 

Buzaker Law corporation

Buzaker Law corporation

About Buzaker Law Firm

Buzaker Law Firm strives to provide high-quality legal services with integrity, professionalism, and respect for our clients and the community. Our law firm focuses on ethics while solving and negotiating any situation with significant knowledge and skills gained through years of practicing law in Toronto, Ontario.

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