The Financial Services Regulatory Authority of Ontario (FSRA) has launched a public consultation period to get feedback on its proposed guidance regarding the licensing information that life agents must report under the Insurance Act in Ontario. The proposed guidance provides FSRA’s interpretation of legal requirements under the Act, and its approach to monitoring and enforcing compliance with these requirements.
Specifically, the interpretation and approach documents outline the information FSRA requires to assess agents’ compliance and suitability to hold a life agent license and related insurance company obligations.
“The guidance outlines three licensee reporting requirements for life agents: Errors and omissions insurance, continuing education and agents’ contracted insurers,” FSRA writes in its Life Agent Reporting Requirements and Related Insurer Obligations document. The guidance applies to life agents and life insurance companies. It does not apply to general agents or property & casualty companies.
“FSRA uses information collected from life agents to administer and enforce its market conduct programs and regulations under the Act,” they write. “Agents report most of the information at licensing renewal; however, as noted in this guidance, some changes must be immediately reported to FSRA.”
In addition to discussing the information it will require about an agent’s errors and omissions insurance coverage, and the regulator’s continuing education requirements, the guidance also states that agents must also provide a full list of the insurers the agent is contracted with. “To carry out supervisory and enforcement activities, FSRA needs to know the full scope of the agent’s contracted insurers. Where consumer harm is identified, this information enables FSRA to efficiently contact the applicable insurers to determine whether other policyholders may be at risk and assess the effectiveness of the insurer’s compliance oversight program for its agents.”
Insurers, meanwhile, have an obligation to maintain a system to ensure that agents acting on their behalf are in compliance with the Act. “Whether or not oversight functions have been delegated by an insurer to third parties, insurers retain this regulatory responsibility,” the guidance states.
The guidance consultation period closes for comment on October 8, 2021.