The Financial Services Regulatory Authority of Ontario (FSRA) is rolling out a new campaign to educate consumers about navigating the complexities of life and health insurance purchases.
It targets vulnerable consumers and their families, providing them with the knowledge to pose relevant queries, comprehend offered products, and make well-informed decisions.
A review conducted by FSRA earlier this year uncovered instances when managing general agencies (MGAs) and their agents used inappropriate training materials and sold complex products that failed to meet the needs of their clients.
This consumer education campaign is part of the regulator’s response to these troubling business practices.
“Consumers deserve better,” said Huston Loke, executive vice president, market conduct. “The regulatory breaches and lapses in best practices among agents associated with these MGAs are unacceptable.”
“We will continue to scrutinize this sector, including insurance companies where necessary, take enforcement actions and educate consumers to help ensure they receive policies and products that are right for them and their families.”
The consumer education campaign is designed to furnish consumers with crucial information, including:
Additionally, consumers will be educated about how an agent is expected to elucidate the concept of life insurance, its workings, and the optimal options for the consumer and their family.
According to FSRA, the agent's responsibilities include conducting comprehensive insurance needs analysis, outlining the risks associated with investment components, and explaining ongoing costs or implications.
They should also assist in completing and submitting applications and addressing any queries raised by the consumer.
“Life insurance is meant to protect individuals, families and businesses, and these products should meet the consumer's individual needs and match their financial circumstances,” said Loke.
“It's important that individuals and families know about the potential risks of purchasing complex insurance policies and understand that they are not obligated to buy if they don't feel any of the products are right for them.”
Research conducted by FSRA in 2022 found that vulnerable consumers were 16 % more likely to encounter issues in the life and health sector compared to their non-vulnerable counterparts. This demographic includes new immigrants, older persons, students, and those with low financial literacy.
What are your thoughts on this story? Feel free to comment below.
