B.C. amends law in effort to address sky-high condo and townhouse insuranceSynergy Mortgage
Regulatory changes end insurance referral fees to strata managers, require commission disclosure by agents
The B.C. government has announced regulatory changes aimed at bringing more transparency to condo insurance premiums, which have risen by as much as 40 per cent.
The Finance Ministry says effective Nov. 1, insurers or insurance agents will be required to give 30 days’ notice to condo or “strata” corporations if they intend not to renew a policy or to make any changes.
It says that would ensure stratas have advance warning of cost increases in order to seek other insurance options if they wish.
Referral fees to strata property managers from insurance transactions are also prohibited, effective immediately.
The legislative amendments also mean insurance agents will be required to disclose their commission amount, or a reasonable estimate, to the corporations.
Those who fail to meet that requirement face penalties of up to $25,000 for an individual or $50,000 for a corporation.
The changes will “help strata corporations maintain their financial stability by providing them with the information they need to make informed decisions about their insurance needs,” the Ministry of Finance said in a release.
Stratas, or councils involving condo and townhouse owners, have been calling on the province to step in as insurance costs have risen to unaffordable levels.
A government-commissioned report released in June found deductibles increased by triple digits as insurance premiums rose.
Finance Minister Carole James said then that commissions could have been 20 per cent of the cost, but ending referral charges and disclosing commissions would increase competition and may lead to lower rates.
The B.C. Financial Services Authority is expected to release its final report in the fall.