The Financial Services Regulatory Authority of Ontario (FSRA) and managing general agency World Financial Group Insurance Agency of Canada (WFGIA Canada) have reached an accord regarding a Notice of Proposal (NOP) issued by FSRA in April of last year.
In the 2023 NOP seen by Insurance Business, the regulator cited a lack of oversight of agent-related delegated functions as a result of multiple gaps in WFGIA’s operations.
“The lack of direct agent monitoring, delegation of monitoring functions without verifying completion of delegated functions, and no formal proactive agent reviews, in combination with a large proportion of gross income generated from the sale of relatively complex permanent life products by newly licensed agents, raise concerns about potential consumer harms,” reads part of the FSRA document.
Now, under its newly reached agreement with the watchdog, WFGIA Canada will form an independent supervision team to evaluate agent compliance. The evaluations will involve risk-based selection, representative sampling, and reviews of newly sponsored agents.
WFGIA Canada will submit regular reports summarizing the reviews and the actions taken to the regulator. Additionally, the MGA retracted its request for a hearing before the Financial Services Tribunal regarding the NOP, which FSRA has since withdrawn.
“FSRA continues to take action to protect consumers and ensure public confidence in the insurance sector,” executive vice president of market conduct Huston Loke (pictured) stated. “These measures strengthen agent oversight and help to ensure agents are selling products that meet their customers’ needs.”
Meanwhile, in a separate enforcement action, the regulator imposed an administrative penalty amounting to $50,000 on WFGIA Canada for paying compensation to Gurpreet Singh Ghuman for soliciting and/or placing insurance policies while he was not licensed as an insurance agent.
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