The Financial Services Commission of Ontario (FSCO) is overhauling its approach to compliance examinations of insurance advisors.
The regulator plans to conduct “desk reviews” prior to performing onsite exams as part of the new process. These reviews allow the FSCO to gauge which advisors require a more in-depth compliance review.
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“What we’re trying to do by having these layers of examinations and reviews is to try and end up focusing on who are the higher-risk people that we should be taking a look at as opposed to something that’s just random, where you might get the best performing agents,” explained FSCO director of licensing Heather Driver. “We’re looking for contraventions when we do things like this. So, being able to identify risk factors is important.”
Investment Executive reported that the desk reviews will be conducted with a “couple hundred” insurance advisors in Ontario. Participating advisors will be selected based on certain criteria that identify them as having a higher risk of non-compliance.
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Driver said that based on the results of those desk reviews, some of those advisors will be asked to participate in a full on-site examination.
Advisors who receive an email or a letter related to the desk review are required to complete the questionnaire and submit it to the FSCO by email within 15 business days. Those that fail to do so could face disciplinary action.
Advisors will also be required to submit supporting documentation with their questionnaire. These documents include proof of their errors and omissions (E&O) insurance and continuing education (CE) credits.
Those advisors selected for an onsite examination could find that the exam process is different than the previous system, Driver warned. The examinations could be tailored to the individual agent based on the results of his or her desk review, she explained.
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