FSRA draft priorities focus on reducing costs

The Financial Services Regulatory Authority of Ontario (FSRA), the province’s new, designated insurance regulator, has published a consultation paper on its priorities and initial budget, which highlights the new agency’s planned focus on reducing regulatory costs.

In its Draft 2019-20 Priorities and Budget published Monday, the FSRA states that in its first year, it will focus on “burden reduction and regulatory effectiveness” across all of the sectors that it will oversee, including insurance, pensions and credit unions.

To that end, the consultation paper sets out the FSRA’s intention to use “greater expertise, rule-making and other regulatory tools and improved processes to reduce burden and increase regulatory effectiveness while keeping costs as low as reasonably possible.”

To find ways to reduce regulatory costs, the FSRA plans to review existing guidance, data, filing requirements and service standards to ensure that they are relevant and valuable. “Regulatory effectiveness is about ensuring that we achieve our legislative objectives and protect the public interest through industry and regulatory expertise, enhanced collaboration and transparency, efficient processes and use of technology and enabling innovation,” it states.

In addition to the goal of reducing the burden across all sectors, the consultation paper also sets out specific objectives for particular sectors.

For the insurance sector, the FSRA plans to improve conduct regulation through the adoption of new conduct standards, improving the licensing system and harmonizing guidance on treating clients fairly. “Strengthened conduct standards will eliminate oversight gaps in the industry, ensure a level playing field for all industry participants and help increase fairness to consumers,” it states.

“FSRA will work with stakeholders and other regulators to seek harmonized conduct expectations and provide clarity about how this guidance is to be interpreted and applied in day-to-day business through the product life cycle,” it adds.

On the financial front, the FSRA proposes to levy $97 million in fees and assessments on the industry, to cover its $95.6 million in initial annual operating costs and to start recovering its startup costs.

The FSRA also states it will not simply represent a rebranding of the agencies that it’s replacing, the Financial Services Commission of Ontario (FSCO) and the Deposit Insurance Corporation of Ontario (DICO). “With an ambitious transformation mandate, FSRA will not simply be a continuation of existing Ontario regulators. We are committed to doing the right things and doing things right and we will build on the strengths of both FSCO and DICO,” it states.

The consultation runs until Feb. 8. After that, the FSRA will finalize its priorities and budget, which will then go to Ontario’s finance minister for approval.

The FSRA initiative comes alongside the Ontario Securities Commission’s own new effort to examine ways to cut regulation in the securities sector.

Staff

The staff of Advisor.ca have been covering news for financial advisors since 1998.