Financial institution sets national precedent
It took several years to organize, and a milestone change in provincial legislation, but the Newfoundland and Labrador Credit Union is now doing what no other financial institution in English Canada can do: sell life and death benefits to its clients.
Prior to this, NLCU – like all other financial institutions in the country outside of Quebec – could only offer life insurance, annuities and segregated funds through a separate corporate entity with stand-alone employees. In NLCU’s case, that entity was Credential Financial Strategies.
According to NLCU’s chief executive officer, Allison Chaytor-Loveys (pictured), the situation was less than ideal. “We, on the credit union side, could see and understand that our members – who are our owners – didn’t have enough coverage. We might look at a business owner and think that this person could use key person insurance in case they got sick, but we couldn’t take them by the hand to someone who could talk to them about it.”
Glenn Bolger, NLCU’s chief operating officer, used a typical client scenario to explain how the old way of doing things impeded service delivery: “You would come into the branch to give us all of your information in regards to your mortgage, your loans, your credit cards, whatever business you have with us. A lot of that information is necessary for big picture planning for your financial future. In the past, we would refer you to our insurer, but we couldn’t share any of that information with the insurer. So you would have to go through the process of providing all that information, again, to the insurance person. The convenience of being able to look after everything for you under one roof is a real benefit.”
“Also, as far as efficiencies and costs are concerned, you have the costs of running separate entities but your people aren’t integrated. You don’t have the ability to build that one team,” added Chaytor-Loveys.
Those inefficiencies, bolstered by repeated requested from clients, prompted NLCU to lobby the provincial government to revise the Credit Union Act and Regulations, which it did on July 1, 2009. The change only affects credit unions within Newfoundland and Labrador; it has no impact on chartered banks as they are regulated federally.
Asked why it took two and a half years after the legislative change for NLCU to begin selling insurance in-house, Chaytor-Loveys explained that “we wanted to take our time because we were setting a precedent. We had to make sure that the foundation was right.”
After securing its insurance broker license in December 2011, and integrating the former Credential Financial Strategies staff into the NLCU fold, Chaytor-Loveys says the time was finally right for the launch.
Early results seem to indicate that slow and steady was the right approach to take. Six months after they started offering this new service, Chaytor-Loveys says reaction from clients has been very positive and that NLCU insurance sales have increased. And that, she asserts, is “just the tip of the iceberg.”