Offering further protection to life insurance customers with segregated fund contracts
In our ongoing efforts to strengthen protection for life insurance customers with segregated fund contracts, Ontario’s financial services regulator, FSRA, is proposing a second amendment to the Unfair or Deceptive Acts or Practices (UDAP) Rule. The amendment has been submitted to the Minister of Finance for approval.
This proposed amendment stipulates the following:
- Insurers must remove the deferred sales charge option from existing segregated fund contracts for future deposits, if possible.
- If insurers cannot remove the deferred sales charge option from a contract, insurers must provide the contract owner with information to help the contract owner decide if it is suitable to continue making deposits that will be subject to deferred sales charges.
- If insurers remove the deferred sales charge option from a contract, but the contract owner had previously arranged to make future payments that would be subject to deferred sales charges, insurers must explain the contract owner’s options for future deposits.
If approved by the Minister, the amendment would take effect 15 days after his approval. If the Minister takes no action, the amendment would take effect on March 23, 2024.
We thank all stakeholders who submitted feedback during the second consultation. No further material changes resulted. Full details of the second proposed amendment to the UDAP Rule and a summary of stakeholder feedback are now available.
Learn more:
- Board-approved Amendment 2
- Proposed Consolidated Rule, blacklined with pending changes per Amendment 2
- Publication about Amendment 2
- Summary of stakeholder feedback received during the first public consultation regarding Amendment 2 and FSRA’s responses
- Summary of stakeholder feedback received during the second public consultation regarding Amendment 2 and FSRA’s responses
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.