FSRA introduces major new supervisory framework guidance

The Financial Services Regulatory Authority of Ontario (FSRA) has released its Insurance Prudential Supervisory Framework Guidance for public feedback and consultation.

FSRA’s Insurance Prudential Supervisory Framework lays out the regulator’s processes for assessing the risk profiles of insurance companies incorporated in Ontario. According to the regulator, this will allow it to better protect customers by helping FSRA identify any areas of concern, while determining how much the FSRA needs to step in to supervise and intervene on issues.

“This is an important milestone that will promote high standards of business conduct in the insurance sector and protect the rights and interests of policyholders and consumers,” said FSRA executive vice president, credit union and insurance prudential Mehrdad Rastan.

Rastan added that the FSRA’s new approach would allow Ontario residents to continue to have confidence that locally incorporated insurers “will act in their best interest and treat them fairly.”

The framework was developed with input from FSRA’s Technical Advisory Committee on Regulatory and Supervisory Initiatives, as well as other consultation participants.

FSRA has stated that the framework is risk-based, principles-based and aligned with national and international practices. It also takes into consideration the size, complexity, and risk profile of each institution. In addition, the framework increases the effectiveness of FSRA’s supervision by allocating the regulator’s resources to problem areas that are of the greatest risk, a release said.

Other stakeholders and the public are invited to provide feedback on the framework until September 06, 2022.