Purpose of the consultation

FSRA held a 90-day public consultation on the Proposed Unfair or Deceptive Acts or Practices (UDAP) Rule (the Proposed Rule). The consultation was posted from December 18, 2020 to March 18, 2021 on FSRA’s website.

UDAP are prohibited under Section 439 of the Insurance Act and currently prescribed in O. Reg 7/00 (the Regulation) under the Insurance Act. UDAP may apply to insurers (including the officers, employees or agents of insurers), brokers, intermediaries, adjusters and providers of goods and/or services engaged in the insurance sector.

The Proposed Rule is intended to replace the Regulation and uses rulemaking authority provided to FSRA under section 121.0.1 (1) 67 of the Insurance Act, which enables FSRA to prescribe “any activity or failure to act that constitutes an unfair or deceptive act or practice under the definition of “unfair or deceptive acts or practices” in section 438” and prescribing associated requirements.

The 90-day consultation on the Proposed Rule included 27 submissions, 24 comments and 10 questions from interested members of the public. Respondents included insurers, brokers, agents, lawyers, health care professionals, car rental operators and consumer advocates. FSRA also held 12 follow-up meetings with industry associations to discuss issues specific to the Life and Health Insurance sector. In addition, FSRA convened a Residents Reference Panel on Automotive Insurance in Ontario that provided further insight regarding consumer expectations in its final report to FSRA, which was released on March 12, 2021.

Stakeholder submissions were generally supportive of the Proposed Rule but identified some substantive issues that required further review. FSRA has considered the feedback and comments provided and has made proposed amendments to the Proposed Rule where necessary.

The amended UDAP Rule will be released for a secondary public comment period of 30-days on August 11, 2021. 

This document summarizes the feedback received during the consultation and FSRA’s response. A full list of respondents to the consultation is provided in Appendix A of the Notice and Request for Comment. Submissions, comments and questions are available on FSRA’s website .

Restatement of proposed rule’s intent in response to stakeholder feedback

FSRA’s response to stakeholder feedback and amendments to the Proposed Rule continue to be guided by the original objectives and principles set forth in FSRA’s Notice of Proposed Rule and Request for Comment (the Notice). While the Notice remains the definitive statement of the Proposed Rule’s guiding objectives and principles, a brief restatement respecting outcomes-focused drafting and the implementation of the Proposed Rule is in order given feedback received through the course of the 90-day public comment period.   

The Proposed Rule has been drafted in support of FSRA’s broader transition towards principles-based regulating. Although based on the Regulation, the Proposed Rule provides a regulatory framework that better aligns with the FSRA Act and current market conditions. Outcomes-focused drafting and criteria are intended to provide FSRA with the discretion to determine whether unfair or deceptive practices have occurred based on clear legal tests and upon consideration of all relevant circumstances.

To advance FSRA’s mandate and statutory objects, the Proposed Rule holds the Insurance sector to a high standard of business conduct in keeping with the Regulation and in further alignment with certain sections of the Canadian Council of Insurance Regulator’s (CCIR) Fair Treatment of Customers (FTC) Guidance. At the same time, FSRA expects regulated entities to bear greater responsibility for ensuring compliance with the Proposed Rule, including exercising judgment regarding appropriate conduct on matters of public interest such as potential UDAP violations. Using a principles-based approach to regulation and supervision, regulated entities are expected by FSRA to treat consumers fairly, which includes accountability for fair conduct in cases where the law is subject to interpretation and all ambiguities have not been removed through prescriptive drafting focused on prohibiting or permitting specific business activities.

FSRA expects insurers and other market participants to undertake whatever work is necessary to ensure compliance with the Proposed Rule before it comes into force. FSRA will continue to take an outcomes-focused approach to monitoring compliance with the new UDAP Rule, including supervision, deterrence and encouraging proper market conduct to ensure public confidence and safety. FSRA will continue to apply a methodical and criteria-based approach to assessing potential compliance issues with the highest impact and priority, which may be subject to further investigation and review, to ensure the fair treatment of customers. FSRA will be pleased to answer whatever questions the sector may have respecting the interpretation of the Proposed Rule and ensuring operational compliance.

Summary of comments

Reasonable person test and principles-based regulation

Rebating / incentives

Prohibited conduct in auto insurance


Principles-based regulation and implementation

Unfair claims practice

Other sections or aspects of the proposed rule