Ontario's financial services regulator (FSRA) has proposed a new rule aimed at strengthening the oversight of life and health insurance managing general agents (L&H MGAs) and enhancing consumer protection.
The proposed rule seeks to ensure that consumers receive consistent and fair treatment, with guidance from well-trained and properly supervised agents.
"Our proposed rule will improve protection for Ontarians by ensuring they receive life and health insurance advice and product recommendations from well-trained and properly supervised agents," said Huston Loke, executive vice president of market conduct at FSRA.
Loke further noted that FSRA's supervision had identified concerning practices within the MGA distribution channel, which the new rule aims to address.
The rule builds on recent amendments to the Insurance Act, which established a distinct licensing category for L&H MGAs in Ontario. It outlines clear requirements for licensing, compliance, and agent oversight for businesses involved in specific regulated L&H MGA activities related to selling life and health insurance.
Additionally, the proposed rule seeks to increase accountability for both L&H MGAs and insurers by clarifying their respective roles and responsibilities in supervising agents. It also introduces new requirements for agents working with L&H MGAs.
This proposed rule is part of FSRA's broader six-point action plan, designed to address troubling practices within the life and health insurance sector that have been negatively impacting consumers. FSRA is encouraging stakeholders to provide feedback on the proposed rule, with the consultation period open until March 31, 2025.
The regulator recently ramped up its efforts to address compliance issues in the health services sector by launching its 2024 to 2026 Health Service Provider Supervision Plan, which targets specific areas of non-compliance.
