FSRA is currently in the final stages of a more comprehensive conduct review with the results expected to be made public in a matter of weeks.DragonImages/iStockPhoto / Getty Images
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Spring cleaning is well underway at the Financial Services Regulatory Authority of Ontario (FSRA) as the regulator updates existing policies and introduces new measures to increase oversight of the insurance industry.
Last month, FSRA issued new guidance for life insurance agents, representing the latest in a wide-ranging consolidation effort that has been ongoing since 2019 when the new regulator replaced the Financial Services Commission of Ontario (FSCO). The more hands-on approach is already starting to show results, according to Huston Loke, executive vice president of market conduct at FSRA in Toronto.
“Our predecessor regulator didn’t have a lot of activity in terms of supervising life agents proactively whereas we have a dedicated life agent team,” he says.
Complaint volumes have gone up over the past year, Mr. Loke says, but that’s “not necessarily because more mistakes are being made.”
FSRA has tried to be very responsive to complaints when they’re made, including prompt follow-ups and taking action when required.
“I believe what is happening now is it’s more clear that those complaints are heard, action is taken and people are held to account,” he says.
“That builds a self-reinforcing process in which we then hear the next round of complaints from, let’s say the insurer or whomever first brought those complaints to our attention,” Mr. Loke says.
Update on education credits
Meanwhile, the new guidance, which clarifies the rules around errors and omissions insurance and what qualifies as continuing education (CE) credits, is a welcome “burden-reduction development” for the industry, says James Ryu, vice president of advocacy and general counsel for Advocis, the Financial Advisors Association of Canada.
“These were previously expectations that were scattered through various documents. Before, when it was in various different pieces of regulator guidance, it was hard to keep it all in mind,” Mr. Ryu says. “What [FSRA] has been doing is going piece by piece and trying to see what’s still applicable, or if something is out of date to repeal it.”
One particular point of clarity the update provided was on the question of whether courses focused on practice management and lead generation could be counted towards the requirement for agents to undergo at least 30 hours of CE every two years. That was previously a “bit of a grey area,” Mr. Ryu says, because some courses could be seen as sales training in nature, but also contain more technical knowledge elements.
“The areas that lead to building businesses are not going to fit the mould for continuing education requirements,” Mr. Loke says. “In those cases, we will ask agents to find more appropriate areas to build out their proficiency and knowledge.”
Mr. Loke says FSRA had to introduce new requirements to keep pace with investor needs and expectations.
The regulator is currently in the final stages of a more comprehensive conduct review with the results expected to be made public in a matter of weeks, Mr. Loke says.
“You have agents out there and they have their business and they want us to take action against other agents who are engaging in improper practices,” he says. “The reputation of the sector rises and falls based on the behaviour that is observed.”
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Jameson Berkow