The new testing system could lead to higher costs, less agents, and less people buying life insurance, according to Primerica, which bills itself as the largest independent financial services marketing company in North America.
The company is upset the new national testing system will be administered by the stock-market regulator in Quebec, where there are significantly higher testing fees than other provinces.
It says Canadians already have less insurance coverage than most OECD countries, and Quebec is at the lower end of that range. It says the testing system to be implemented in 2016 will only make matters worse.
The company says any additional barrier to new licences will disproportionately affect working-class and immigrant communities, which it views as its target market. If less agents sign up for the tests from those communities, it says fewer people from those communities will buy insurance.
"Our representatives sit at the kitchen tables of middle-income Canadian households, rural Canadians, new Canadians — under-served communities," said Karen Sukin, the company's head of government relations.
"The new licensing system will reduce the number of licensed life insurance representatives available to help families. It also will kill jobs and the livelihood of thousands of Canadians."
The company points to two particular concerns — the potential fee hike, which would be passed down to prospective agents and consumers; and the new four-module exam system, which will test people in separate areas unlike the all-in-one system that currently exists in most provinces.
But the company can't put a number on how much the changes would cost them, or how many people would be affected.
Primerica says that's part of the problem — it can't quite gauge the impact because it says regulators acted in haste, without consulting them or conducting a thorough impact assessment.
The Canadian Insurance Services Regulatory Organizations calls those concerns blown out of proportion.
The new exam will cost $65 to do the test, with an additional $65 fee for next five years to help recover the costs of the reform, and course providers will also charge additional fees as they already do, said CISRO chair Ron Fullan.
He says that's far cheaper than the $700 figure being floated by some opponents of the new system. In return, he says, Canada will get a single, harmonized testing system that will simplify things for interprovincial call centres and for people who move between provinces.
Another benefit, he said, is that the new four-part test will ensure agents have minimal knowledge of various aspects of their industry, while also allowing them to retake one module should they fail it — instead of having to redo the whole exam, like they do now in most provinces.
"We believe the changes made are going to enhance consumer protection, on one side," Fullan said. "And some of the revisions will also make the exam experience better for applicants. We believe it's a win-win."
One of the companies that writes the current licensing manuals and course materials, however, warns that it could go out of business.
Toronto-based Oliver Publishing Inc., which employs 20 people, says insurance manuals are a main revenue source for its operation — and it can't believe a regulatory body might be allowed to steal its business.
It says CISRO and Quebec's Autorite des marches financiers are expropriating their livelihood.
"They're gunning for private business," said Callum James, vice-president of Oliver Publishing.
"We actually build the market, show it's viable, and then they come gunning for us.... This should be of concern to anyone who runs a business that is regulated."
Primerica won't say whether it might seek legal recourse. For now, it says, it's hoping regulators might back down, or be forced to do so under political pressure.
One expert on Canada-U.S. trade, who conducted research on the issue for Primerica, said the $4 million cost to implement the new system might have been worth it — if it was actually fixing a real problem.
"You can handle paying more for a test, or a new administrative system, if there's a problem that you're solving — if there was a fundamental flaw with the previous test, if the insurance regulators are getting complaints, if consumers are unhappy, if there's a real impetus across the country for harmonization," said trade consultant Laura Dawson.
"But none of those things is actually happening... Is it really a solution looking for a problem?"
She said most of the country's testing system was already harmonized, but Quebec's wasn't. So the rest of the system moved toward Quebec, she said.
CISRO bristles at the way the new system is being characterized as some kind of Quebec takeover. Fullan says the new system will incorporate ideas from different parts of the country. The four-part exam system comes from Quebec, while ideas from other provinces will be incorporated such as group-insurance on the exam and mandatory pre-test courses, which currently aren't required in Quebec.