The Financial Services Regulatory Authority of Ontario (FSRA) has launched an Innovation Office tasked with enabling innovation opportunities in the financial services sector.
The FSRA announced the new unit in a press release, which says that the Innovation Office will provide a test-and-learn environment to validate and assess potential ground-breaking advancements before they hit the Ontario market.
The office has already started testing a new application, proposed by an insurance company looking to test a direct-access model to distribute commercial insurance products in Ontario.
The proposed model will allow insurers and agents, under the supervision of a common managing general agent, to provide clients access to a suite of niche commercial insurance products from different insurers. The Insurance Act currently limits licensed general insurance agents to acting for a single insurer, unless insurers are carrying on business in a common undertaking.
“It is FSRA's view that in this case, this novel distribution model has the potential to provide significant benefits to consumers and possibly facilitate the modernization of insurance distribution in Ontario,” said Glen Padassery, FSRA executive vice president. “However, we will work closely with the applicant to ensure that undesirable consumer outcomes are avoided and appropriate safeguards are developed to protect individuals and families across the province.”
The regulator also says that during this testing phase, the insurance company is required to ensure the competence of its agents, fair client treatment, proper governance and oversight, and to establish a consumer complaint handling process.
“The insurance company would also have to provide the tools and resources, including training, to assist agents with information about the new products and to ensure consumers’ rights and interests are being protected,” writes the FSRA.