A new note from Insurance Bureau of Canada (IBC) president and CEO, Celyeste Power, applauds the government for commitments made in the most recent federal budget to reduce the regulatory burden on financial institutions. The statement adds that the property and casualty (P&C) insurance industry hopes the government goes further and embeds economic growth into regulators’ mandates.

She notes that Canada’s regulatory system is fragmented and increasingly complex: The country has 44 financial regulators, and most have significantly expanded their size and scope, “with some doubling or tripling their headcount,” she says. “As regulators broaden their mandates, including oversight of non-financial risks and strategic business activities, insurers are forced to scale their internal teams just to keep pace.” 

This, she adds, is a drag on innovation, investment and growth. At the end of the third quarter of 2025, the P&C industry was subject to 38 active consultations and initiatives.

Compliance costs have surged 

“Regulatory compliance costs across Canada’s P&C insurance sector surged 81 per cent since 2022, according to a new Regulatory Compliance Cost Survey by the IBC. That’s nearly 13 times the rate of inflation, and six times greater than the industry’s own revenue growth,” she writes.

According to the IBC, in 2024, regulatory compliance costs in the P&C sector alone reached $753-million, up from $416-million in 2022. Internal labour accounted for nearly three quarters of total costs, including a 26 per cent increase in the number of full-time compliance employees. Broken down, they say 40 per cent of compliance time is spent on the Office of the Superintendent of Financial Institutions’ (OSFI) requirements, with the remainder spent on provincial regulator’s compliance requirements. “This proportion has remained relatively stable from 2022 through 2024,” she writes. 

Canadian insurers reportedly spent 17 per cent of their operating costs on compliance in 2024.

Unlocking productivity 

“While regulatory costs in Canada’s insurance sector are rising sharply, other jurisdictions are moving in the opposite direction. The European Union, the United Kingdom, Australia and South Korea have all announced reforms aimed at reducing regulatory burden and modernizing oversight frameworks. These efforts are designed to unlock productivity, improve affordability and create space for innovation,” she writes. “The IBC does not oppose regulation; there is no question that regulation is essential to maintaining market integrity and protecting consumers. But the current system is out of balance.”