October 30, Ontario’s Minister of Finance, Peter Bethlenfalvy released the province’s 2024 fall economic update, the 2024 Ontario Economic Outlook and Fiscal Review: Building Ontario for you. In it, the province repeats its plans for a proposed licensing framework for certain distributors under the Insurance Act.
“Ontario recognizes the important role that the life and health insurance sector plays in our economy. Increasingly, insurers have been selling products and services through distributors such as managing general agents (MGAs),” the document states. “To align with sector development and better protect consumers, the government is proposing to create a licensing framework for distributors under the Insurance Act, and clarify the roles and responsibilities of insurers, distributors and agents.
This builds on previous work by the government and FSRA to promote greater transparency and consumer protection through banning deferred sales charges in Ontario and initiating the implementation of total cost reporting for individual variable insurance contracts.”
Strong support from industry association
In response to the news, the Canadian Life & Health Insurance Association (CLHIA) published its own statement from CLHIA’s president and CEO, Stephen Frank. “We welcome this commitment by the provincial government,” he says. “Our industry strongly supports this initiative by the Ontario government. Enhancing consistency of oversight of intermediaries is a critical first step towards modernizing the existing legislative framework and strengthening consumer protection in today’s distribution network across Ontario.”
In the broader document the Ontario provincial government is now projecting a $6.6-billion deficit in 2024 and 2025. Over the medium term, the government projects a deficit of $1.5-billion in 2025-2026, followed by a surplus of $900-million the following year.
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