Reminder to licensees on strata insurance requirements

Published June 15, 2023

Licensees who do strata insurance business are reminded about the regulatory requirements related to referral fees, compensation disclosures, and notification of non-renewal or changes to strata insurance per Insurance Council practice advisory Notice ICN 20-003 Requirements for Strata Insurance Business. These requirements apply to all strata property insurance business, including commercial strata properties and all residential strata properties regardless of size.

The requirements were first updated and published in September 2020 following the provincial government’s introduction of regulatory requirements to increase clarity and transparency of strata insurance business through legislative changes to the Marketing of Financial Products Regulation now renamed the Financial Products Disclosure Regulation.

For ease of reference, we’ve summarized some of the requirements below, however, licensees should review Notice ICN 20-003 Requirements for Strata Insurance Business as it provides an overview of the regulatory requirements and outlines the Insurance Council’s expectations for insurance licensees, and includes a Q&A document to provide further clarity.
Referral fees prohibited
Effective September 4, 2020, referral fees for strata property insurance cannot be paid to a property manager or any other party, nor can a commission be paid to any unlicensed person, even if an agreement was entered into prior to this date.
Disclosure of compensation
Effective November 1, 2020, the total dollar amount of commission or other compensation received by an agency for a strata property insurance policy must be disclosed in writing to the strata corporation. If that information is not available, an estimate of that amount and how it will be calculated must be provided. Licensees must ensure they provide disclosure within the required notification period. Where an estimate has initially been provided, licensees must follow up with another disclosure of the actual compensation amount once known.
Disclosure of material changes or non-renewal
Effective November 1, 2020, in instances where a client’s strata property insurance will not be renewed on the same terms and conditions or where there is a material change to the strata insurance contract, there is a requirement for insurers to provide clients with notification of the insurer’s intention and proposed terms within specified timelines. The licensee is then required to provide the terms and notification of non-renewal to the client in a minimum of 35 days prior to the policy expiration. Where the proposed terms are not known within the notification period, licensees must disclose to the client what they do know about the status of the policy to keep them informed.

The Insurance Council’s Code of Conduct requires agents to provide 60 days’ notice to their clients regarding non-renewal or changes to terms. This means that licensees should initiate communication with clients no less than 60 days in advance of policy expiry. Licensees should use this lead time to start the process of communicating with clients and insurers, even if they do not have all the information at this stage.
Disclosure method
Disclosures must be provided in writing directly to the strata council although the strata council may delegate communication to a strata property manager or other legal representative. Licensees may use their own disclosure format, but it should be clear and easily understood by the client.

Additionally, ICN 20-001 Brokering Best Practices includes information about licensees’ obligations under the Code of Conduct, including the 60 days’ advance notification referenced above.

Have questions about the notice or how the regulations apply to you? Please contact our Practice and Quality Assurance Team at 604-695-2008, toll-free at 1-877-688-0321 ext. 3, or email us at