New FSRA insurance sector guidance comes into effect January 1
The Financial Services Regulatory of Ontario (FSRA) has issued new guidance advising Ontario’s insurance sector that it will use the Canadian Council of Insurance Regulators (CCIR) and the Canadian Insurance Services Regulatory Organizations (CISRO) joint document, Guidance: Conduct of Insurance Business and Fair Treatment of Customers, issued September 27, 2018 when supervising the conduct of insurers and other entities FSRA regulates, when it comes to the fair treatment of customers (FTC).
FSRA’s new approach takes effect January 1, 2021. The guidance affects insurance companies, agents, corporate and partnership insurance agency businesses, insurance adjusters and their businesses.
Going forward, FSRA says it will assess whether entities follow the guidance when setting and maintaining business policies and practices. Mortgage brokering, loan and trust, credit unions and caisse populaire sectors will continue to be governed by guidance issued by FSRA’s predecessor organization, the Financial Services Commission of Ontario.
“FSRA expects licensees to assess themselves against the guidance when setting or revising policies and procedures and operating their business,” the approach document states. “Licensees have some latitude to determine how best to achieve the expected outcomes, and reasonably demonstrate application of the principles in ways appropriate to the nature, size and complexity of their business operations and activities.” (An approach document describes FSRA’s internal principles, processes and practices for supervisory action.)
FSRA adds that it prioritizes the reduction of regulatory burden for licensees, and the adoption of single or national standards for a sector where available. “Harmonizing guidance regarding the fair treatment of customers in insurance with the Guidance (document) supports this priority.”