The Financial Services Regulatory Authority of Ontario (FSRA) will strengthen its supervisory activities for Managing General Agencies (MGAs) and licensed agents in the life and health insurance sector.
Through a joint cooperative review of three life and health MGAs, the FSRA and the Canadian Council of Insurance Regulators (CCIR) have identified four main concerns in market conduct:
It was also found that MGAs with a tiered-recruitment business model lacked the necessary mechanisms to protect consumers from being treated unfairly.
In light of the identified concerns, the FSRA vowed to take the following actions:
This comes on the heels of the FSRA’s move to suspend the licenses of 106 health service providers who had failed to file their Annual Information Returns (AIR) between 2018-2021. In late August, FSRA also issued warning letters to other non-compliant health service providers.
"The observations of the review, combined with the rapid growth of these MGAs and newly sponsored agents in Ontario, point to the potential for consumers to be harmed,” Huston Loke, executive vice president of market conduct at FSRA, said in a press release. “FSRA will continue to protect consumers and ensure they receive suitable product recommendations from their life insurance agents."