Unlike its predecessor organization which previously issued non-regulatory scheduled invoices at the end of their fiscal year, the Financial Services Regulatory Authority of Ontario (FSRA) surprised many recently when it issued their invoices at the end of November – the beginning of FSRA’s fiscal year.
Worse, say industry watchers, the regulator has significantly increased the fees they are charging. “This is especially true for smaller pension plan sponsors – the minimum fee has tripled from $250 to $750 per year,” writes Jason Vary, president of Windsor and Toronto based Actuarial Solutions Inc. “What I don’t understand is why the same fees apply to all types of pension plans. A defined benefit pension plan definitely requires more supervision than a defined contribution pension plan, yet they pay the same fees. I worry this may drive more employers to set up Group RRSP plans rather than true defined contribution plans.”
Vary says FSRA did send out a blanket email to all plan sponsors before the invoices were sent, but only provided one week’s notice and left details about the fee changes buried behind internet links. The regulator also failed to inform service providers about the changes.
Although it is not immediately clear if insurers face a similar hike in fees, the new FSRA assessments were also likely received by members of the insurance industry as well. The calculations used to assess fees were similarly buried in FSRA’s Rule 2019-001, Assessments and Fees.
The FSRA assessment is calculated by subsector using a formula where an insurer’s direct written premiums are divided by total direct written premiums for the subsector and multiplied by budgeted expenditures, net of fees. Small insurance companies pay a minimum assessment $1,000 and fraternal societies a minimum assessment of $100.
License application fees for a new Ontario incorporated insurer, meanwhile, are now $4,000 per application. Agents will pay a licensing fee of $150 for a two year license. Corporation agent license fees are set at $400 for a two-year license.
