P&C industry responds to governments’ urgent call to knock down internal trade barriers
Moves by the United States administration to implement tariffs on its closest ally and largest trading partner has generated a new push by Canadian officials to consider ways to break down barriers to interprovincial trade and labour mobility. This is good news for the property and casualty (P&C) insurance industry, specifically as it relates to adjuster mobility. In a recent op-ed, Anita Anand, Minister of Internal Trade, specifically cited “lengthy certificate recognition and licensing processes [that] delay regulated workers from going where they are needed most”.
Governments across Canada are now calling on industry to identify barriers that impede the free flow of goods and labour within the country.
In response, a coalition of 8 P&C associations has renewed its long-standing plea for Canadian policymakers to eliminate a pain point that impacts the industry’s ability to effectively respond to consumers after severe weather events.
In a February 10 letter to the Canadian Insurance Services Regulatory Organizations (CISRO), the coalition calls for major reforms to Canada’s adjuster licensing regime. Currently, each Canadian province has its own licensing requirements. This acts as an impediment to the mobility of adjusters, who are prevented from operating in other provinces without special permission from regulatory authorities. The industry is calling on CISRO and Canadian policymakers to adopt a system of reciprocity – meaning if an adjuster is licensed in one province, their license would be recognized across the country.
Past efforts to knock down labour mobility barriers have stalled
The proposal for licensing reciprocity is not new. In 1990, the federal, provincial, and territorial governments (FPT) established the Agreement on Internal Trade (AIT) to facilitate the free flow of trade and worker mobility in Canada. In 2011, FPT Ministers committed to adding financial service occupations, which would include insurance adjusters as approved professions under Chapter 7 on labour mobility. The format amendments to Chapter 7 came into force in 2021.
The labour mobility provisions of the AIT were reaffirmed in 2017 with the introduction of the Canadian Free Trade Agreement (CFTA) and provide the framework for implementing a national system of reciprocity. In 2014 CISRO agreed to implement a pilot to streamline reciprocity process in recognition of the need for insurance companies to be able to deploy enough adjusters to a disaster zone to quickly begin the claims process.
However, the pilot did not mature to a fully operational framework.
The case for knocking down adjuster licensing barriers once and for all
There has never been a more critical time to examine the barriers impeding adjuster mobility across the country, for two primary reasons.
First, a Canada-US trade dispute could pose limitations on Canada’s ability to tap into American adjuster capacity, in which case Canadian adjuster capacity would be tested like never before.
Second, the rapid growth in the severity and frequency of severe weather events is testing domestic adjuster capacity. Canada just experienced its worst ever year for insured losses caused by severe weather events, and the ability to rapidly deploy labour across the country is critical.
In its communications with policymakers, the coalition has noted that other jurisdictions have found ways to facilitate the free flow of adjusters. For example, in the United States, all but three states offer reciprocity on adjuster licensing (New York, California, and Hawaii being the exceptions).
The coalition has also highlighted the similarities between Canada’s provincial licensing requirements (e.g. hours of training, nature of education, scope of license, oversight requirements), noting that the similarities between regimes confirms that there is no reasonable public policy rationale for not introducing a system of reciprocity.
Looking ahead
Minister Anand was recently asked if interprovincial barriers could be dealt with within 30 days, the length of the pause on tariffs granted by the US administration. Her response: “the short answer to your question is yes”.
In the face of the US threat, Canadian governments appear to be willing to undertake the difficult work necessary to facilitate the movement of goods and labour within the country.
The P&C industry stands at the ready to work constructively with governments and regulators to remove barriers to labour mobility, improve the claims landscape, and ultimately make Canada a more resilient country.
