FSCO to make additions to annual on-site exams

par Susan Yellin | November 08 2017 01:30PM

Photo: Freepik

The Financial Services Commission of Ontario (FSCO) will be making some additions to its annual on-site exams of life insurance brokers this year.

Heather Driver, director, licensing with FSCO, told the fall summit of the Independent Financial Brokers of Canada in Toronto on Nov. 8 that FSCO will add a layer of supervision with a new desk review approach to focus on the highest-risk advisors.

Failure to respond

Not all life advisors will receive the questionnaire but those who fail to respond within the required 15 days will be escalated to regulatory disciplinary officers.

FSCO will be looking at a number of key issues, including unlicensed activity, false information on application forms, continuing education credits, having E&O insurance as well as a new section on failure to disclose a conflict of interest or potential conflict of interest, said Driver.

Disclosure of conflicts of interest

"During recent examinations ... it was revealed that some agents were unaware of this or were aware and didn't think it was important to comply with the requirement" to disclose conflicts, she said.

Driver noted that failure to provide this information to clients carries with it a potential penalty of $3,000 for each time regulators uncover the infraction.

E&O insurance

Driver also said the percentage of Ontario life advisors who have E&O insurance recently rose to 94.5 per cent from its previous level of 91 per cent.