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Life agents fare poorly in FSRA compliance review

Close up on a file tab with the word life insurance, focus on the main text and blur effect. Concept image for illustration of family protection policy
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Regulatory actions included agents giving up their licenses, warnings, and escalation for possible discipline.

“FSRA identified 105 contraventions of the Insurance Act resulting in formal regulatory findings against 20 life agents (29%),” the regulator said, adding that it found 334 instances of industry best practices not being followed (in reviews of 240 client files) involving over half (56%) of the agents it reviewed.

“These outcomes suggest that life agents need to improve their overall business practices, and that the insurers who are obligated to monitor the intermediaries authorized to sell their products need to review their life agent compliance programs,” the regulator said in its report.

In the year ahead, FSRA is planning to expand its supervisory reviews, with the goal of examining “a reasonable and proportionate volume based on the number of licensed agents in Ontario.”

The regulator also said that it intends to consult on the volume of agents it should be aiming to review each year, along with consulting on improving the life agent reporting process and integrating industry best practices into its supervisory reviews.

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“Consumers buy life and health insurance to protect themselves and their families against the unexpected. We have developed this new framework to help ensure they are treated fairly and offered products that meet their needs,” said Huston Loke, executive vice-president, market conduct at FSRA, in a release.

FSRA said it expects the new framework to determine misconduct, and to promote industry transparency and disclosure.



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