The Financial Services Regulatory Authority of Ontario (FSRA) has published its most recent life agent supervision report saying the life and health insurance industry has more work to do to protect consumers.

Between 2022 and 2024 the regulator reviewed 319 agents reported through its Life Agent Misconduct Report (LAMR) system (the same forms are also known as life agent reporting forms or LARFs in other jurisdictions), escalated 55 cases for further investigation and closed 15 cases with no concerns.

Adverse behaviours 

Notably, among the 319 cases reviewed, the regulator identified more than 1,963 best practices issues. Adverse behaviours identified included providing false or misleading information to both insurers and consumers, engaging in coercion, fronting for unlicensed individuals, not providing written disclosure of conflicts of interest and not adhering to best business practices.

Top best practice issues identified included:

  • Agent files missing contemporaneous notes 
  • Absent disclosures regarding the range of products offered 
  • Missing policy illustrations, including illustrations of different product scenarios
  • Missing insurance needs analysis
  • Missing delivery receipts

The number of LAMRs received by the regulator since its inception has increased from 53 in 2019 and 2020, to 123 in 2022 and 144 in 2023 and 2024. They say the increase is likely the result of FSRA encouraging the practice of reporting agents and does not necessarily represent an increase in life agent misconduct.

The Life and Health Insurance Agent Supervision Report, is the fourth edition of the report published since FSRA’s inception in 2019. Insurers are required by law to report to the regulator if they have grounds to believe a life agent who acts on their behalf is not suitable to carry on business. The Insurance Act also requires insurers to establish and maintain a system of compliance that ensures every life agent representing the insurers complies with the Act, with FSRA’s rules and conditions of licensure.

The regulator also notes that in the past year FSRA was unable to act on more than 10 per cent of LAMRs submitted due to insufficient evidence and supporting documentation.

“The outcomes of FSRA’s supervision suggest there is more work for the industry to do to protect consumers,” the report states. “Going forward, FSRA will prioritize working with the industry to improve the quality of LAMRs received.”