Ontario’s Financial Services Regulatory Authority (FSRA) has issued a notice regarding the Bermuda-domiciled Relm Insurance Limited, warning that the company is not licensed to conduct insurance business in the province – but the insurer has contended this statement, saying that there has been a “misunderstanding.”
On June 30, 2022, the FSRA issued the notice, which said that Relm is advertising the sale of insurance products in Ontario without a license. The regulator also stressed in its statement that “only a FSRA-licensed insurance agent, corporate insurance agency, or an insurance company can sell insurance products” in Ontario.
Shortly after the FSRA’s statement made the wire news rounds, Bermuda Premier and Minister of Finance David Burt criticized the regulator’s statement, which was covered by the likes of The Royal Gazette. Burt brought the issue to the House of Assembly, alleging that the story was an attempt to deface the government. The premier also told the House that he had contacted Relm to apologize for the report.
As reported by The Royale Gazette, Relm had issued a response over the weekend to the FSRA’s notice, saying that it was aware of the statements against it.
“We believe this is based on a misunderstanding,” the company said, adding that as a Bermuda-domiciled company that is authorized and regulated by the Bermuda Monetary Authority, it does not advertise the sale of its insurance products in Ontario. Relm also explained that it does not present itself as being authorized in Ontario, but it has “acted appropriately and in accordance with the law.”
“Any insurance business for Ontario-based insureds is placed through appropriate distribution channels,” the company continued in its response statement.
“Relm brokering partners are authorised to place business with Relm and also authorised to work with local retail brokers in Ontario to obtain coverage for their clients, where equivalent coverage is unavailable in the local authorised insurance market.”
Relm also noted that brokers must first exhaust all options for finding coverage locally before they can explore and source capacity abroad – this step, the company stresses, is where brokers “must adhere to a strict compliance framework.”
“Relm is actively reaching out to regulators to clarify any misunderstandings as it relates to the statements made by the FSRA,” said Relm co-founder and CEO Joseph Ziolkowski.
“For Ontario companies seeking insurance protection for risks that are underserved in the local insurance market, there is a prescribed path for sourcing capacity abroad, including from insurers that may not otherwise be authorised to transact insurance business in Ontario,” the chief executive added.
In April, Relm launched Relm II – a fully regulated collateralized reinsurance business that can accept both fiat and cryptocurrencies as collateral. The new business’ capability to accept both fiat and crypto for collateral was held as “a critical distinction” in the collateralized reinsurance space, allowing the company to tap into “substantial pools” of aligned investor capital to support traditional lines of coverage.
