FSRA proposes new Rule requiring life insurance companies to improve annual statements for segregated fund contract owners – Join webinar & share feedback
Ontario’s financial services regulator (FSRA) is taking steps to better protect life insurance customers with individual segregated fund contracts (seg funds).
FSRA is proposing a Rule that would require insurers to provide customers with improved annual statements about the performance and embedded costs and fees associated with owning seg funds. If approved, the approach to disclosing total costs and fees will be consistent for investment and seg fund holders, making it easier for consumers to compare and decide on the product that’s right for them.
FSRA has been working with the Canadian Council of Insurance Regulators, as well as with the Canadian Securities Administrators, to enhance and harmonize how performance and fees are disclosed for investment and seg funds.
Insurers are required to provide annual statements right now. The FSRA rule will increase the information insurers would be required to provide on the annual statements, such as:
- informing customers of the total cost of investing, including ongoing embedded fees such as management expenses and trading expenses
- improving customer awareness of their segregated fund investment performance
- advising customers of their rights to guarantees under their segregated fund contracts and how certain actions might affect their guarantees
- allowing customers to more easily compare the cost of owning segregated funds with the cost of owning other investments
Some insurers already provide some of the above information on a voluntarily basis.
The proposed Rule will set out requirements that would be applied consistently across the sector in alignment with the Individual Variable Insurance Contract Ongoing Disclosure Guidance published by the Canadian Council of Insurance Regulators in 2023.
The consultation period for the proposed Rule is now open and will close on July 26, 2024. FSRA invites stakeholders to review the proposed Rule and submit their feedback.
Join FSRA live online for an overview of the proposed Total Cost Reporting Rule, as well as an interactive Q&A session.
Wednesday, June 19, 2024
11 a.m. – 12 p.m. EDT
Register now
Learn more:
FSRA continues to work on behalf of all stakeholders, including consumers, to ensure financial safety, fairness, and choice for everyone.
Learn more at www.fsrao.ca.