FSRA issues tough new licensing suitability requirements
TORONTO, Nov. 21, 2023 /CNW/ - To better protect consumers, the Financial Services Regulatory Authority of Ontario (FSRA) has proposed Guidance that clearly sets out the requirements to be suitable to hold a life insurance agent licence in Ontario.
FSRA wants to ensure all life agents, including managing general agencies (MGAs), have the skills necessary to be licensed and will comply with the law, treat customers fairly and adhere to all legal and regulatory obligations.
The proposed Guidance provides a reference for applicants and agents to understand how past and current conduct may affect their suitability to hold a life insurance agent licence. It also reiterates oversight responsibilities for life insurance companies.
"We are taking action to help ensure that individuals and families are treated fairly and get life insurance that is right for them today and well into the future," said Huston Loke, Executive Vice President, Market Conduct at FSRA. "We have seen some troubling practices in the life insurance sector and we believe this guidance will help improve the conduct of professionals who Ontarians trust to provide sound life insurance advice."
FSRA is releasing this proposed Guidance as part of its six-point action plan to correct inapproariate business practices in the life insurance sector. FSRA's supervisory reviews have found gaps and a lack of clarity relating to the roles and responsibilities shared among insurers, MGAs, and independent agents. This includes a lack of agent training and supervision, unsuitable product sales, and agent recruitment and compensation models that may lead to the unfair treatment of customers.
The six-point action plan sets out an enhanced approach to sector supervision, a new regulatory framework, industry guidance, enforcement, whistleblower protection, and a consumer education campaign.
FSRA continues to take action to strengthen the regulatory framework for MGAs and other intermediaries that distribute life insurance products. This includes, but is not limited to, the implementation of a new proposed Rule which would introduce new requirements and duties relating to developing compliance monitoring systems and overseeing the conduct of life insurance agents. FSRA plans to consult on a draft Rule in the coming months. In addition, FSRA has heard directly from stakeholders that additional options should be considered to strengthen the regulatory framework. For example, some stakeholders have suggested the creation of a new licensing class with specific requirements and obligations.
FSRA is committed to making sure consumers and industry members understand this proposed guidance. That's why we're asking the public to join us live online for an overview of the publication and an interactive Q&A session. The date will be announced shortly.
To review the proposed Guidance and submit your feedback, please visit FSRA's website. The consultation period is now open and will close on February 9, 2024.
FSRA continues to work on behalf of all stakeholders, including consumers, to ensure financial safety, fairness, and choice for everyone. Learn more at www.fsrao.ca.
- Consultation on Life Insurance Agent & MGA Licensing Suitability Guidance
- Life Agent Thematic Examinations: Tiered-Recruitment Model MGAs (October 2023)
- Observed Practices in the Distribution and Sale of Universal Life Insurance (October 2023)
- View related enforcement action
Russ Courtney
Sr. Manager, Media Relations
Financial Services Regulatory Authority
C: 437-225-8551
Email: [email protected]
SOURCE Financial Services Regulatory Authority of Ontario
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