Providing consumers with better information on their segregated funds

Total cost and performance information would align with that in the securities sector

Ontario’s financial services regulator (FSRA) is taking steps to better protect and inform life insurance customers with individual variable insurance contracts (segregated fund contracts).

FSRA has submitted the Board-approved Total Cost Reporting Rule to the Minister of Finance for approval.

If approved, this rule would require insurers to provide customers with enhanced annual statements that clearly disclose total costs and investment performance.

These enhancements would allow customers to more easily compare their segregated fund contracts with other investments supporting informed financial decisions. These requirements would also align with those in the securities sector.

In response to stakeholder feedback from the public consultation, the Board-approved rule includes two new exceptions that should avoid unreasonable implementation costs for insurers, which may be passed on to customers. Insurers using these exceptions would need to meet a number of conditions. One of these requires insurers to submit an attestation to FSRA. FSRA may rely on the attestation and take a risk-based approach when determining supervisory actions, if needed.

If approved by the Minister this year, customers should begin receiving enhanced annual statements in 2027, for the year ending on December 31, 2026.

FSRA thanks all stakeholders for their feedback during the consultation. There were no further material changes.

Learn more: 

• Board-approved Rule 2024 – 002 Total Cost Reporting
• Publication of Board-approved Rule
• consultation feedback summary
• Canadian Council of Insurance Regulators’ national guidance

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.