The Financial Services Regulatory Authority of Ontario (FSRA) has published new proposed guidance setting out the requirements which make agents suitable to hold a life insurance agent’s license in Ontario.
“FSRA wants to ensure all life agents, including managing general agencies (MGAs), have the skills necessary to be licensed and will comply with the law, treat customers fairly and adhere to all legal and regulatory obligations,” the regulator states in its announcement about the new guidance. “The proposed guidance provides a reference for applicants and agents to understand how past and current conduct may affect their suitability to hold a life insurance agent licence. It also reiterates oversight responsibilities for life insurance companies.”
They further add that the guidance is part of a six-point action plan “to correct troubling business practices in the life insurance sector.”
The regulator also plans to publish a new rule introducing new requirements and duties related to compliance monitoring and the oversight of life agents and their conduct. It adds that it plans to consult on the draft rule in the coming months. The consultation period for commenting on the new guidance published November 21, closes February 9, 2024.
“FSRA’s supervisory reviews have found gaps and a lack of clarity relating to the roles and responsibilities shared among insurers, MGAs, and independent agents. This includes a lack of agent training and supervision, unsuitable product sales, and agent recruitment and compensation models that may lead to the unfair treatment of customers,” they state.
“The six-point action plan sets out an enhanced approach to sector supervision, a new regulatory framework, industry guidance, enforcement, whistleblower protection, and a consumer education campaign.”