FSRA steps up efforts to ensure fair outcomes for customers
FSRA steps up efforts to ensure fair outcomes for customers | Insurance Business Canada
Legal Insights
FSRA steps up efforts to ensure fair outcomes for customers
Financial watchdog unveils review of 115 higher-risk agents
Legal Insights
By
Miko Pagaduan
The Financial Services Regulatory Authority of Ontario (FSRA) has released its first Life and Health Insurance Agent Supervision Report, outlining the results of its review of 115 higher-risk life agents in 2021-22.
The aim of the report is to promote transparency, and disclosure of information, and deter deceptive or fraudulent conduct, practices, and activities.
The report shows that the life agents reviewed need to improve their overall business practices, and insurers need to review their life agent compliance oversight programs to better monitor and report unsuitable agents.
FSRA executive vice president, Market Conduct, Huston Loke, emphasized the importance of insurance for individuals, families, and businesses, stating that “these customers deserve insurance that meets their needs,” and that FSRA’s “supervision and enforcement efforts” are in place to “ensure consumers are fully protected and that insurance professionals can review and improve their market conduct.”
Of the 115 agent examinations, FSRA took action in 79 cases, escalating 35% of cases for further investigation, issuing a business practice letter in 23% of cases, and closing 21% of cases with no concerns. In addition, the report includes outcomes from 61 agent suitability complaints received through Life Agent Reporting Forms (LARFs) in 2021-22. FSRA closed 57% of these LARF cases and escalated 43% of cases for further review.
FSRA highlighted that its efforts to ensure life and health insurance agents are compliant with legislation and regulations, and working towards fair outcomes for customers, are essential for maintaining public confidence in the insurance industry.
The release of the Life and Health Insurance Agent Supervision Report is a step towards increasing transparency and accountability within the industry, and providing customers with the information they need to make informed decisions about their insurance coverage.
“The outcomes of FSRA’s 2021-22 life agent examinations suggest that the life agents examined need to improve their overall business practices and that the insurers who are obligated to monitor those intermediaries authorized to sell their products need to review their life agent compliance oversight programs. The outcomes also appear to demonstrate a link between contraventions of the Act and not following industry best practices. Since best practices help demonstrate that a policy sale or change is both suitable and in the consumer’s interest, FSRA intends to consult on how such practices may become requirements in Ontario in support of fair treatment of customers,” the report concluded.
With continued market conduct supervision and enforcement activities, FSRA is committed to protecting consumers and promoting fair outcomes in the insurance industry.
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