In its economic update, Ontario says it’s introducing legislation to establish the initial parameters of the new Financial Services Regulatory Authority (FSRA) aimed at modernizing governance and providing an accountability framework to ensure consumers’ perspectives are considered. The FSRA is the result of recommendations made by an expert advisory panel that was established in 2015.
“The FSRA would represent an important first step toward the panel’s vision for modernizing and strengthening the regulation for financial services and pensions in Ontario,” says the economic update. It appears the FSRA would replace or modify FSCO, the Financial Services Tribunal and the Deposit Insurance Corporation of Ontario.
The government says it intends to take other important steps, such as the appointment of FSRA’s initial board of directors — if legislation is passed — and the development of a detailed implementation plan.
At least one industry group, the Insurance Bureau of Canada, applauded the news. “Canada’s insurers are pleased that the government is reforming the way Ontario regulates insurance,” said Kim Donaldson, vice-president, Ontario, in a release. “Today’s Economic Outlook outlines a process for establishing a world-class insurance regulator that can adapt to changing consumer needs and industry trends.”
The Ontario update also noted the independent committee reviewing the regulatory framework relating to financial advice is expected to release its report in early 2017.
In June 2016, an Advisor.ca investigation revealed that nine reps kept their insurance licences for at least six months after being permanently banned by their SROs between 2013 and 2015. At the time, all nine of those reps had been licensed by FSCO.
A 2014 Ontario auditor general report slammed FSCO for inadequate “procedures and information-sharing arrangements” and for failing to “routinely initiate any proactive examination of disciplined life insurance agents when it was aware of them.”