A number of managing general agencies (MGAs) in life insurance submitted individual responses to the Financial Services Regulatory Authority of Ontario (FSRA) regarding Proposed Rule 2025-001 – Life and Health Insurance Managing General Agents. The consultation closed on April 30, 2025, and FSRA is now reviewing the approximately 27 submissions received.
These submissions echo the key concerns raised by the Canadian Association of Independent Life Brokerage Agencies (CAILBA). (See related article → Ontario licensing: MGAs push back against insurers shifting oversight burden).
The independent nature of MGAs and their dealings with multiple insurers may not be adequately reflected
– Phil Marsillo, President and CEO of IDC Worldsource
Among the respondents is IDC Worldsource, whose President and CEO, Phil Marsillo, also served as CAILBA President at the time of the consultation. “The independent nature of MGAs and their dealings with multiple insurers may not be adequately reflected in the proposed rules,” Marsillo wrote in IDC Worldsource’s submission. At the CAILBA conference, members elected Adrien Legault as the new president of the association. Legault is Vice-President for Quebec at IDC.
Marsillo believes the proposed regulation could lead to “a compliance regime that seems to perpetuate many of the shortcomings and deficiencies in our current system.”
Greater clarity is required to avoid unnecessary duplication of compliance efforts
– Cathy Hiscott, President and CEO of PPI
Cathy Hiscott, President and CEO of PPI, also submitted feedback, expressing concern that the rule could result in inconsistencies in compliance and oversight.
“Greater clarity is required to avoid unnecessary duplication of compliance efforts among insurers, MGAs and advisors,” Hiscott wrote. She believes this duplication would lead to confusion and delays in accessing advice and service.
HUB Financial, for its part, expressed concern about the compliance costs associated with a rule whose scope is poorly defined and which “introduces multiple compliance obligations,” wrote President Andrew Fink and Vice-President of Insurance Compliance Kim Moffatt in their submission.
They listed heightened requirements in areas such as reporting, training, internal controls, and documentation. “The associated compliance costs may present a significant burden for MGAs,” they wrote.
Overlap or conflict of interest?
On the insurer side, the Canadian Life and Health Insurance Association (CLHIA) also criticized the proposed rule for its lack of clarity regarding responsibilities, and emphasized the need to avoid duplicating regulatory requirements.
“We note an absence of clearly defined and distinct roles and responsibilities for insurers, MGAs, and advisors. This could lead to confusion and overlapping compliance obligations,” CLHIA wrote.
The association called for the rule to be revised “to establish clearly distinct roles and responsibilities for MGAs, insurers, and agents, including a definition of the key activities and regulatory responsibilities of MGAs as core market participants.”
No insurer has a complete view of an MGA’s activities
– CLHIA
CLHIA also argued that MGA oversight should fall under a regulator or self-regulatory organization, not insurers. The association noted that MGAs are independent and work with multiple insurers. “No insurer has a complete view of an MGA’s activities. Independent oversight is therefore essential to prevent potential consumer harm and ensure fair competition.”
CLHIA proposed amending Section 12 of Ontario Regulation 347/04 on agents or using the FSRA rule to ensure that insurers are not subject to the same obligations when advisors are affiliated with MGAs versus those operating through a captive agent network.
Ontario Regulation 347/04 falls under Ontario’s Insurance Act, and Section 12 pertains to insurer compliance systems for agents. Among other things, it requires insurers to maintain a system to monitor agent compliance and to report any issues to FSRA’s Chief Executive Officer.
Full authority to credentialing bodies
On the advisor side, Advocis does not share CLHIA’s concern about potential overlap in advisor oversight under an MGA licensing regime. In its submission, the association welcomed the rule’s clarification “that shared oversight between the MGA and the insurer does not reduce or alter the insurer’s ultimate responsibility for the advisor.”
According to Advocis, it is “deeply misguided” to seek to amend or eliminate shared responsibility on the grounds that Regulation 347/04 is redundant and overly burdensome.
The advisor group sees a potential solution in Ontario’s 2019 Financial Professionals Title Protection Act, which regulates the use of the financial planner and financial advisor titles. Since its introduction, the related professions and the credentialing bodies that supervise them have evolved. Advocis sees an opportunity to delegate full responsibility for overseeing financial advisors and planners to these credentialing bodies. “Credentialing bodies would not be subject to the same concerns or conflicts that currently justify shared oversight between MGAs and insurers,” Advocis argues.
