Ontario’s Minister of Finance has approved a second amendment to the Unfair or Deceptive Acts or Practices (UDAP) rule, affecting Ontario consumers with existing segregated fund contracts. In some cases, the Financial Services Regulatory Authority of Ontario (FSRA) says deferred sales charges (DSCs) simply won’t apply. In other cases, consumers will be given information to help them decide if it’s suitable for them to continue to make investments that may be subject to DSCs.
“In February 2022, the Canadian Council of Insurance Regulators (CCIR) and the Canadian Insurance Services Regulatory Organizations (CISRO) issued a public release strongly recommending that insurers stop selling individual segregated fund contracts with DSCs by June 1, 2023. The first amendment to the UDAP rule, which introduced a ban on deferred sales charges for new individual segregated fund contracts, took effect on June 1, 2023,” the regulator stated in an announcement about the finance minister’s decision to approve the rule.
“On January 30, 2024, the Minister of Finance approved a second amendment, which will take effect on February 14, 2024. The rule strengthens the supervision of insurance industry conduct and enhances consumer protection by clearly defining outcomes that are unfair or otherwise harmful to consumers,” they write.
