The Financial Services Regulatory Authority of Ontario (FSRA) published its 2023 – 2026 Annual Business Plan, focused on deliverables related to emerging risks, supervisory capacity, innovation and the need to better protect and educate consumers.
“This plan builds on the progress FSRA has made to meet the demands of the fast-paced financial environment, which includes adopting a principles-based, outcomes-focused approach and sector-specific supervisory plans,” the regulator states in its announcement about the business plan’s publication.
In Ontario, FSRA regulates eight sectors, including property and casualty insurance, life and health insurance, credit unions and caisses populaires, health services providers, pension plans, and financial planners and advisors. Going forward, FSRA says it will focus on operational efficiencies in core compliance, supervision and enforcement areas. It also says it is maturing as an organization. “New or revised priorities reflect an enhanced need to protect the public interest while enabling creative ideas and more choice within Ontario’s financial services sector.”
The business plan states that FSRA intends to use a portion of its accumulated surplus to maintain charges to regulated entities at rates substantially, despite inflation. Ontario’s Minister of Finance reportedly approved the plan April 12.
The report goes on to look at the funding of defined benefit pension plans, the profitability of credit unions, at auto insurance rates, and conditions for both property and casualty (P&C) and life and health insurance.
Notable trends, they say include the increased use of telematics in auto insurance. “Although FSRA encourages innovation such as telematics in the auto sector, the technology also has the potential to disrupt the fair treatment of customer outcomes,” they write.”
The rising use of digital platforms, meanwhile, also comes with heightened fair treatment concerns, as do efforts to implement automation. Issues and trends discussed include open banking, vulnerable persons, suitability-related issues, consolidation of pension plans, new ways of looking at retirement and decumulation and third-party outsourcing. Title usage among financial planners and advisors is also discussed, along with cyber-risk, and environmental, social and governance (ESG) risk they say is particularly present among insurance companies and pension plans.
