Insurer-MGA relationships, consumer complaints, title regulation, increased scrutiny of the auto insurance industry’s data, and increased oversight to protect life and health insurance consumers are all on the list of priorities the Financial Services Regulatory Authority of Ontario (FSRA) plans to focus on in 2021 and 2022.
The regulator published its proposed 2021-2022 Statement of Priorities and Budget for public consultation Oct. 13. The list of proposed expenses, strategic investments and sources of funding will form the core of FSRA’s annual business plan to be submitted to the Minister of Finance before the end of December 2020. In addition to consulting with its stakeholder advisory committees and consumer advisory panel, FSRA is calling for stakeholders and the public to comment on its priorities before Nov. 3, 2020.
Increased conduct supervision
“FSRA proposes a $104.1-million budget for 2021-2022 costs to achieve its mandate and stated priorities,” they write. “The $4.7-million increase is due to investment in regulatory enhancements and increased conduct supervision, regulatory effectiveness and digital transformation.” FSRA says it will invest $1-million in increased conduct supervision “to achieve acceptable minimal levels of supervisory oversight of life agents, auto enforcement and credit union conduct.”
In insurance, the regulator says it will be paying closer attention to life insurers’ distribution systems. It also plans to review the commercial practices of tier-1 insurers to evaluate the implementation of fair treatment of customers (FTC) principles across distribution channels. It plans to “establish enhanced market conduct oversight” and plans to implement an industry code of conduct for intermediaries. It also proposes to review FTC principles to determine whether or not new standards are needed to enhance investor protection when it comes to the sale of segregated funds.
Title protection framework
FSRA also plans to implement its title protection framework which will require individuals in Ontario who use ‘financial advisor’ or ‘financial planner’ as a professional title to be appropriately qualified. On its list of priorities, FSRA says it plans to complete the consultation process for all rules and guidance governing title protection, develop and implement a supervisory approach and accept applications from entities seeking approval as credentialing bodies.
In auto insurance, meanwhile, FSRA says it will take action to protect consumers, including claimants in property and casualty insurance generally, with a specific focus on auto insurance rates regulation. It also plans to finalize proposed rules for defining unfair or deceptive acts or practices under the Insurance Act. In addition, FSRA has also convened a new residents’ reference panel on auto insurance which will make recommendations on automobile insurance regulation in Ontario. It plans, as well, to improve its data processing to better oversee the auto insurance sector: “As the amount of data generated by the insurance industry and collected by the regulator continues to grow and change, the importance of leveraging collected data to support rate and underwriting regulation transformation an auto insurance reform becomes critical. FSRA will continue to develop and implement its auto insurance data and analytics strategy with a focus on modernizing FSRA’s data infrastructure and analytical capabilities to enhance the regulation of Ontario’s auto insurance sector.”
In addition to the different insurance sectors, the priorities also focus on credit unions, mortgage brokering and pensions in Ontario.
To learn more, consult the the statement of priorities here.
