FSRA’s webinar on the Point of Sale Test and Learn Environment (January 14, 2026)

0:01

Thank you for joining today's webinar for the point of sale test and learn environment.

0:07

My name is Stephanie and I will be your host for today's webinar.

0:11

Let's begin by going through today's agenda.

0:14

We'll begin with introduction of today's speakers, followed by a land acknowledgement.

0:20

We'll then provide some background context, walk through the key design details of the point of sale TLE, outline next steps and conclude with Q &A session.

0:31

I'm joined today by my colleagues Scott Boutilier and Rosie Petrides, both of whom are senior policy and technical leads in FSRA's Innovation Office.

0:40

Scott and Rosie will be presenting this morning.

0:43

Later in the session, we'll also be joined by other FSRA colleagues who have been working on this initiative to support the Q &A portion of this webinar.

0:54

Please enter your questions as they come to you so we can address them during the Q &A portion.

1:00

If we receive similar questions, we'll group them together and address them in a single response.

1:06

And to help keep us on track, we will be prioritizing questions specifically related to content from today's presentation.

1:14

If we are unable to answer your question today, please feel free to reach out at [email protected].

1:23

Please note that a link to the recording on the FSRA website will be sent next week.

1:29

Before we start the presentation, it is important to acknowledge the land we are on is the traditional territory of many nations, including the Mississaugas of the Credit, the Anishinaabeg, the Chippewa, and the Haudenosaunee, and the Wendat peoples, and is now home to many diverse First Nations, Inuit, and Métis peoples.

1:52

We acknowledge that Toronto was covered by Treaty 13 with the Mississaugas of the Credit, the Williams Treaties signed with multiple Mississaugas and Chippewa bands.

2:05

Thank you, and with that, we'll move into today's presentation.

2:10

As many of you are aware, the government announced in the 2025 Provincial Budget that it was moving forward with a regulatory amendment that would enable the sale of auto insurance at motor vehicle dealerships under FSRA's TLE, and that FSRA would be responsible for developing the scope, consumer protection safeguards, and overseeing the TLE testing period.

2:33

With respect to this specific TLE, FSRA would grant an exemption from the prohibition against the sale of auto insurance at an automobile dealership set out at section 231 of the Insurance Act.

2:50

For those of you joining us this morning, who may not be as familiar with the test and learn environment, also known as the TLE, it is FSRA’s regulatory sandbox.

3:08

It is a dedicated space to support the testing of new products, services, or business models in the real market.

3:15

It offers companies the ability to test activities not currently permitted under the current regulatory framework for a limited time, and it allows visitors to put in place tailored safeguards to ensure consumer protection during testing, and in turn allow us to monitor the impacts and consumer outcomes.

3:36

The results and findings can help validate new products or approaches before they are introduced more broadly into the market, and insights from the testing period help inform future refinements to regulatory approaches.

3:53

A few key points to highlight before we move into the presentation.

3:57

The government's goal for this pilot is to enable the testing of new distribution models to improve consumer convenience when purchasing auto insurance.

4:08

Under this TLE, auto insurance products will continue to be distributed through licensed agents or brokers and sold within OMVIC-related regulated dealerships.

4:22

And there will be an emphasis on enhanced transparency and disclosure to ensure we maintain robust consumer protection and achieve the intended outcomes.

4:33

I will now turn it over to Scott for the presentation.

4:41

Great, thanks Stephanie.

4:43

So I'm going to spend a few minutes talking about our approach to TLE at FSRA and the scope we're working within and then we'll get into more details around the expectations for applications and for applicants for the Point of Sale TLE.

5:01

So like Stephanie mentioned, our goal with this point-of- sale TLE really is to test new delivery models in Ontario for the sale of auto insurance, specifically at the point of sale at automobile dealerships.

5:15

And there's three main things that we've been focused on in putting together this TLE and will continue to be focused on as tests are approved and implemented over the coming months.

5:29

So the first and most important is safety.

5:32

Consumer protection is a core priority at FSRA and so in this TLE we are really focused on making sure that measures are put in place throughout the testing process to protect consumers, mitigate risks, and respond to any potential unintended impacts that may arise.

5:53

The second transparency.

5:55

So we wanna be fostering transparency between FSRA and test participants so that there is open communication and shared understanding of how the tests are progressing.

6:07

And we also wanna foster transparency for consumers so that consumers are aware that there is a test that's happening and they know where to go to seek out more information or help if needed.

6:20

And then finally, collaboration.

6:23

The whole purpose of using the test and learn environment is to test new ideas.

6:28

So we're really focused on working together with test participants to understand whether their tests are performing as expected and are meeting the outcomes that are being set out.

6:39

In terms of what success looks like for this TLE, there are two main things that we plan on monitoring.

6:49

The first, like Stephanie alluded to earlier, is consumer convenience.

6:54

So are the projects that are being tested through the TLE providing improved convenience for consumers?

7:00

Are they using the new distribution model that's available to them?

7:03

And are they having a good experience when they're doing so?

7:06

And then second, consumer protection, with these models that we're going to be testing, are we seeing new or additional risks or impacts to consumers?

7:18

And if we are, are those being effectively mitigated through measures that have been put in place, some of which we'll talk about a bit later in the presentation.

7:30

So on the next slide, now I'm going to start talking a little bit about the bounds of the point of sale TLE.

7:37

So, what's the space that we're going to be testing within?

7:41

We are testing, like Stephanie mentioned, the sale of auto insurance products at motor vehicle dealerships in Ontario.

7:47

I want to stress here that beyond the exemption that we articulated for approved TLE projects, nothing else is changing regarding the sale of auto insurance.

7:58

So, that means that as with the current regulatory framework, We are still expecting auto insurance to be distributed by licensed individuals in the TLE.

8:08

And similarly, the TLE applies to auto insurance products that are classified as such under the existing framework.

8:18

In terms of the duration of this point of sale TLE, our exemptive authority allows for a test duration of two years, plus a possibility of renewal for an additional two years.

8:30

So, there is potential for a four-year testing duration for projects that are approved for these tests.

8:37

And to address the note on the bottom in terms of implementation, the policies that fall within approved projects must have an effective date on or after July 1st of 2026, so July 1st of this year.

8:51

And as some of you listening to the webinar may know, there are changes to accident benefits coverage for auto insurance that are coming to effects on July 1st of this year as well.

9:02

So with this start date for approved projects within the point of sale TLE, all of the tests will be occurring under this new change to the auto insurance framework.

9:16

So eligibility, who should be applying to the TLE?

9:20

We understand that models proposed for this TLE could involve a number of different players.

9:27

So FSRA is really open to receiving applications from many different business types.

9:33

And we do in fact expect to see applications that involve multiple parties submitting a joint application.

9:40

With that being said, the parties that are involved in an application must be licensed and in good standing with their applicable regulator.

9:49

And those participants should also be able to demonstrate sufficient expertise to execute on whatever is being proposed in the application and so this could include relevant information like professional experience or proof of available capacity to deliver on the proposal while adhering to the safeguards that FSRA is setting out.

10:17

So I've talked about the bounds of the TLE so the scope and eligibility.

10:23

In the next few slides myself and then my colleague Rosie We are going to talk more about the application and our expectations for applicants.

10:32

What I'll say before we get into that is at FSRA, we use the test and learn environment as a collaborative tool to support innovation in our regulated sectors.

10:42

So we really encourage you to connect with us in advance of submitting a formal application to discuss your proposed model.

10:51

We're really committed to working with applicants to support your application within a reason affordable effort and get them closer to a stage of readiness for a formal submission.

11:03

For this point of sale TLE, we are really interested in your ideas and approaches.

11:08

So within the scope and eligibility that I articulated on the previous slides, we are really open to considering a variety of different models and customer journeys to test.

11:20

But I do want to outline and in some cases reiterate some minimum requirements for applications that we'll be expecting.

11:28

As we've mentioned a couple of times, and I'll reiterate here again, the sale of insurance must be conducted by a licensed distributor.

11:35

In addition, all existing legal and regulatory requirements must be adhered to.

11:43

So aside from the exemption that's going to be granted, we're still expecting all relevant legal and regulatory requirements to be adhered to.

11:53

All parties that are involved in a proposed model should also be involved in the application and agree to the details that are included in that application.

12:03

So in a very simple example, if you are proposing a model in your application that involves a partnership between a dealership and an insurance broker, we would want to see both of those parties involved in putting together that application.

12:21

And then finally, proposals that are submitted should really be demonstrating clear accountability for managing conflicts of interests and ensuring professional conduct throughout the duration of the test.

12:32

With this TLE, we are testing an activity that has been prohibited in Ontario.

12:38

So we're really looking for consideration of that as part of the applications that we receive.

12:46

Okay, application components.

12:48

So there's three main components to the TLE application that we'll be looking for applicants to complete.

12:55

And really the goal here is to provide us with enough information in order to determine whether a proposal falls within the scope of the TLE that I've outlined and whether we have enough information and have enough comfort to accept it for testing.

13:13

And I'll reiterate again, We are willing to work with applicants to help get them to a stage of readiness, you know, where we have the level of information that we need at FSRA to make a decision on whether to accept or reject an application.

13:28

I'm going to go into these components in more detail on the subsequent slides, but just to talk about them at a high level description of a proposed model, obviously we'll want to understand what your model looks like and who's involved.

13:42

risk management plan, what are the anticipated risks associated with your proposal, and what strategies would you put in place to mitigate them if that proposal is approved?

13:55

And then data and reporting.

13:57

So as we're going to touch on in a few slides, there will be data collection and reporting requirements for test participants as part of the testing process for this TLE.

14:05

So what we'll be looking for applicants to include as part of the application is, you know, what structures will be put in place by participants or applicants to monitor the activities of the model and effectively report back to FSRA on those.

14:26

So description of proposed model.

14:28

So again, in this component, we're really looking for applicants to describe in detail what the proposed model looks like if approved.

14:37

And that will include questions across a number of different aspects, including participants.

14:46

So who's going to be involved in delivering the proposed model?

14:50

What is their specific role going to be?

14:53

And what is their current licensing status?

14:57

Consumer journey.

14:59

So we want to understand what the consumer journey looks like as part of the model, how that interacts with the individuals and parties that are involved and other aspects of the model that are being proposed.

15:11

And for this, we'll want to understand the different stages of the consumer journey and what's occurring at each stage for the consumer, who they are interacting with, and how the insurance sales process and the vehicle sales process are occurring within that journey.

15:28

And here we'll be playing close attention to make sure that relevant legal and regulatory requirements are being adhered to.

15:39

Another component that we'll want to know about as part of this component of the application is compensation.

15:45

So how will participants or parties to the proposal be compensated under the proposed model and what does that specific compensation arrangement look like?

15:58

Consumer inquiries and complaints.

15:59

So under the proposed model, how will consumers be receiving information and what's the process for them to seek out more information and submit complaints to test participants, if necessary.

16:13

And then finally, post purchase interactions. So what do the ongoing interactions with customers look like after they've purchased insurance at the point of sale?

16:22

For example, what will the insurance renewal process look like for customers?

16:29

And if they have a claim to submit, what does that process look like?

16:36

On the next slide is the second component of our application, which is the risk management plan.

16:45

As part of the application, applicants should be identifying potential consumer or operational risks that might arise from the implementation of the proposed model and describe mitigation strategies that we would be put in place to address them if the model is approved.

17:02

This plan should include how the model will comply with existing legal and regulatory requirements given the nature of what's being proposed.

17:12

As I mentioned earlier, we are testing something that has been prohibited in Ontario, so how applicants make sure that any new or additional risks from a compliance perspective are going to be mitigated if the test is approved and moves ahead.

17:28

Some of the requirements that I'm talking about are listed on the slide here.

17:31

Certainly not an exhaustive list, but it gives you a sense for the kinds of things that we'll be looking for.

17:39

In addition to the requirements that are listed here that are within FSRA's purview, so things like the UDAP rule or take commerce.

17:46

There may also be additional requirements from other regulatory bodies to enable participation in this TLE.

17:53

Here I'm thinking about regulators like the Ontario Motor Vehicle Industry Council or ONVIC and the Registered Insurance Brokers of Ontario or REBO.

18:03

And if there are any exemptions that are needed from those specific requirements, then that should be accounted for and spoken to the application for the TLE as well.

18:15

So now I'm going to pass it over to my colleague, Rosie, who's going to take us through the final component of the application and the remaining portion of the presentation.

18:25

Thank you, Scott.

18:27

On the next slide, the third application component focuses on data and reporting.

18:32

So because this is a test, we want to collect the right data and information to assess whether the models are achieving the desired outcomes and are continuously monitoring consumer protection.

18:44

As part of this TLE, participants will be required to report into FSRA with key information at regular intervals throughout the test.

18:52

Applicants should describe their capacity to effectively meet the defined reporting requirements, including the governance structure and developed infrastructure, to ensure that proposed models are effectively monitored and also to enable timely and accurate reporting of information back to FSRA when requested.

19:10

We'll work to finalize the specific reporting requirements and details, including how participants will report into FSRA and at what frequency, but these elements will all be confirmed before approved tests commence.

19:24

As Scott outlined earlier on in the presentation today, we are focused on two key measures of success for the Point of Sale TLE on the left-hand side of the slide.

19:32

Improved consumer convenience when purchasing auto insurance, and monitoring for no additional adverse risk to consumers.

19:41

On this slide, we've outlined some proposed performance indicators that we plan on tracking to measure success of the models.

19:48

For measuring consumer convenience, we'll be examining the consumer's experience when purchasing auto insurance within the TLE through information like the number of quotes or policies bound or the number of interactions between licensed agents or brokers and consumers within the live models.

20:05

Looking at monitoring risk to consumers, we're aiming to measure consumer satisfaction and knowledge of the process or incoming complaints from consumers.

20:15

However, as noted, this is not an exhaustive list and all the specific data and reporting elements including methods of collection would be developed before a test is approved to commence.

20:27

And some of this data could come from reporting back to FSRA from approved participants and others from independent data collection by FSRA throughout the duration of the test.

20:39

As Scott outlined, consumer safety and transparency are core to our approach for the TLE, especially since the activities being tested were previously prohibited.

20:50

Because of this, any approved tests will be required adhere to a number of consumer protection safeguards and enhance measures to maintain consumer safety and transparency throughout the duration of the testing period.

21:03

We have highlighted some of the key consumer protection mechanisms we will be implementing through the TLE on this slide.

21:10

First, as part of this TLE, we are planning to introduce a specific condition for enhanced disclosure in addition to existing disclosure requirements when purchasing an auto insurance Ontario.

21:22

We want to make consumers aware that they are participating in a test and that they know where to go to get more information, provide feedback, or submit a complaint about their experience.

21:34

We also want to remind consumers of their right to shop around and that they aren't limited or restricted to buying insurance at the dealership when purchasing a vehicle.

21:44

Also, we will be including some information about any financial arrangements between the dealership and distributor in the interests of for consumers, which will all be determined and finalized as projects commence.

21:57

These measures will also make consumers aware of any cancellation policy available to them.

22:03

In addition to the consumer disclosure form, there will be additional requirements for TLE participants put in place throughout the testing period.

22:12

As mentioned in the application component section, a mandatory risk management plan will be developed and put in place to ensure risks are proactively identified, appropriate mitigation strategies are contemplated, and mechanisms are put in place to address them.

22:29

There will be increased accountability on participants to manage conflicts of interest and maintain professional conduct throughout the duration of the test.

22:39

Test participants will also be required to undergo a mandatory review of legal and regulatory obligations to ensure that they have a clear understanding of activities that are and are not allowed within the context of this test.

22:52

And as Stephanie noted in the overview of the TLE, if a test is found to have adverse or unintended consequences to consumers, FSRA has the ability to pivot or halt tests if necessary.

23:06

In addition to these requirements, FSRA will ensure that consumers can access information regarding the TLE through a number of different communication channels.

23:13

We will generate awareness of other tools that can be used to educate consumers, like FSRA's regulator rate ranger that provides consumers with an estimated range of insurance costs based on identified metrics.

23:27

And we are working with our regulator partners to develop a clear complaints pathway for consumers should they need to file a complaint regarding their experience when purchasing insurance within this TLE.

23:40

Looking to next steps for the Point of Sale TLE, we want to encourage interested participants to connect with FSRA after today's webinar and prior to submitting an application to engage with our team and answer any questions or discuss early ideas.

23:55

And you can do that at the email address noted previously, pointofsaltle.fsrio.ca.

24:03

In early March, the TLE will officially launch, and Fizzra will begin accepting applications for the Point of Sale TLE through a developed application form.

24:14

Applications will initially be accepted on a rolling basis, and tests may officially begin on or after July 1, 2026.

24:21

I'll now pass it back to Stephanie, who will be facilitating the Q &A component of this presentation, and I encourage you to put any questions you may have in the chat box now. Thank you.

24:33

Thank you, Scott and Rosie. We'll now take some time to respond to the questions we have received through the chat.

24:40

If you have any questions, you can still enter them using the Q &A icon on your screen.

24:46

And joining us for the Q &A portion of the webinar are Hafiz Alibi, Senior Policy and Technical Lead, Auto Policy, David Bell, Relationship Manager, Auto Insurance Supervision, and Jay Harris, Director, Legal for Policy and Rulemaking and Deputy General Counsel.

25:06

Please note that any questions not answered during the Q &A today will be answered and shared, and we'll be focusing on questions directly related to today's presentation.

25:17

So several questions have already come in.

25:20

The first question is for Scott.

25:24

Do you need to have a partnership before applying to the TLE?

25:32

Yeah, thanks, Stephanie.

25:35

And the answer is yes.

25:37

We do expect applicants to seek out and form their own business arrangement for or between the relevant parties of an application before submitting an application for the TLE.

25:50

So in that simple example that I referenced earlier between a dealership and a licensed distributor, we would want to see that arrangement formed in advance of submitting an application.

26:00

And we'd expect that any legal agreements that document that arrangement would be included in the application.

26:08

We wouldn't be at FSRA working or taking on the role of facilitating arrangements between different groups to support a proposal.

26:17

But like I mentioned earlier in the presentation, we do really encourage you to reach out to us in advance of submitting a formal proposal so we can better understand know, the nature of the proposal and see if there'd be additional information we'd want you to be including.

26:35

Great.

26:36

Thanks, Scott.

26:37

It looks like the second question is also for you.

26:41

So is FSRA expecting specific models and customer journeys through the TLE, or is there an opportunity for innovative and new ideas?

26:54

Yeah, I think the purpose of using the TLE is really to support innovative ideas.

27:01

So we're really encouraging, like I mentioned in the answer to the previous question, really encouraging interested parties to reach out to us to discuss what you're imagining.

27:13

And we can determine whether that might fit under the scope of the TLE and meets the requirements that we've set out um because we really want to be considering under the point of CLTLE things that fall within the scope and to reiterate some of those requirements again the sale of insurance should be conducted by a licensed distributor within these projects.

27:39

The parties to an application should be licensed in a good standing with their applicable regulator and the proposal should demonstrate clear accountability for managing conflicts of and maintaining professional conduct in whatever the model is that's being proposed.

27:57

Great, thanks Scott.

28:00

So the next question is, does the point of sale TLE apply to only insurance products for private passenger vehicles?

28:11

So passing this one over to Jay.

28:15

I think Stephanie, so to confirm it does, but it applies to all automobile.

28:20

So it will cover private passenger, non-private passenger and fleet.

28:26

I think it's important to note that the exemption being applied to only applies to auto.

28:30

So other types of insurance aren't impacted.

28:33

And where that's likely very important to people is that a lot of times auto is sold with home.

28:37

So you get a multi-product discount.

28:40

There's no prohibition currently on selling home.

28:42

So there's, so that will continue to be allowed so that people will be able to buy their home and auto together through the TLE.

28:52

Great, thanks Jay.

28:54

So this next question, I will pass it over to Hafiz.

28:58

What happens after the two years plus an additional two years of testing?

29:05

How would FSRA determine whether to extend a TLE project?

29:12

So we do not have the authority to extend the tests beyond the two plus two year periods of testing.

29:17

Once completed, the participants will need to comply with Section 231, as they would have without an exemption, unless the government changes the Insurance Act.

29:27

We will also assess live TLE projects throughout the initial testing period and will use identified KPIs and metrics to assess whether to recommend that the government make legislative changes.

29:37

After the testing period, the findings from implemented TLEs can help validate the distribution model with insights on how it might enhance or adapt current regulations.

30:14

Bear with us a moment. We're having a technical issue with Stephanie Sound. Hold on. Again, forgive us for the technical issue.

30:51

Hi, can you guys hear me?

30:53

We do.

30:55

Okay, great. Thanks. So moving on to the next question.

30:59

question. This one's also for Hafiz.

31:08

What specific data and reporting requirements will participants have within the point of sale TLE?

31:16

So approved TLE projects will have identified data and reporting requirements that align with PHISRA's desired outcomes and are also specific to the models being tested.

31:25

So we several KPIs and two overarching outcomes for the TLE.

31:30

They are improving consumer convenience and monitoring for no additional adverse risk to consumers.

31:36

So the core KPIs and associated metrics will be enhanced based on the scope of the approved projects.

31:42

Variables, reporting frequency, and other elements related to data and reporting will also be defined in advance of the approved projects.

31:50

There will also be a condition for participants to share additional information as requested by FSRA on an as needed basis.

32:16

Again, we do apologize.

32:18

There is another technical issue with sound.

32:20

Please bear with us another moment.

32:34

So the next question is, will different models be tested live through the TLE?

32:41

Will tests occur at the same time?

32:44

David, I'll pass this one over to you.

32:47

Thank you.

32:47

Yes, so as of July 1st, 2026, on a rolling basis, the projects can be live.

32:56

FSRA is seeking to enable the testing of new distribution models to improve customer convenience through this TLE.

33:03

And we're open to considering different operational models and customer journeys that meet the minimum requirements and adhere to all legal requirements.

33:20

Thanks, David.

33:20

Okay, so the next question is moving to Jay.

33:27

Would a digital direct carrier meet the requirements for licensing?

33:33

Could a carrier's computer terminal be installed in a dealership and the client complete the transaction?

33:41

So dealership employee needs to be licensed and the dealership obtain some type of compensation from that carrier.

33:51

So there's two parts of that question that I think are important to look at.

33:56

So the first part is what can happen in a dealership today.

34:00

There's nothing illegal today with if a customer comes into a dealership and doesn't have auto insurance yet, that they jump on a computer or their own personal smartphone and arrange the insurance.

34:11

But the dealer's not part of that, other than they might say, hey, if you don't have someone, I know a guy who's a good insurance agent or broker.

34:19

So, that's okay today.

34:23

The difference here is that the idea is that the auto insurance could be more integrated with the sales process through the dealership.

34:30

The compensation is a more complicated question.

34:34

In Ontario today, it is not legal for an insurance company, agency, or broker to pay compensation to somebody who's not licensed as an agent or broker to sell insurance, and that doesn't change.

34:46

So, as you look at your models for how you want to deal with the compensation side, it's going to be very important to recognize that generally the person being paid will need to be licensed by Fisher as an insurance agent or by Rebo as an insurance brokerage.

35:02

Thanks, Jay.

35:03

Our next question, in this new model, could a salesperson in a dealership be licensed either with repo, example repo, sell a vehicle to a customer, then at the same time, sell them insurance or the sale of the vehicle and insurance need to be separated, i.e.

35:25

the salesperson passes it off to the insurance rep.

35:29

And I'll hand that one over to you, Scott.

35:33

Yeah, thanks, Stephanie.

35:34

So I think in general, our expectation that the two steps would be done by different people Our major concern here is around issues of conflict of interests and having access to certain information that the respective parties shouldn't for the respective transactions.

35:56

So I think we do want to see the insurance transaction remaining or those activities remaining separated and distinct for the consumer and making sure that any conflicts of interests are managed.

36:09

Um, I'll reiterate to that, uh, you know, in that process, the consumer really should be aware that they do not have to purchase insurance at the dealership that is an option for them.

36:21

Um, but they, they wouldn't be required to, um, sorry, one other thing I can mention here too is that there might also be restrictions on, um, the licensing of a salesperson, um, as a distributor as well.

36:36

So the applicants who would be proposing a model like that would have to ensure that they are compliant with any specific requirements related to dual licensing.

36:48

Thanks, Scott.

36:49

So our next question is, how would FSRA regulated Ontario credit unions that are currently authorized to refer auto insurance in their branches factor into this new TLE?

37:02

How can Ontario credit unions potentially participate in these changes?

37:08

And I'll pass that one to you, Hafez.

37:11

Sure. So the focus of this TLE is selling auto insurance at a motor vehicle dealership by license agent and brokers.

37:18

Ontario credit unions would function as usual in regards to auto insurance and would not be directly impacted by these changes.

37:27

Thanks, Hafez.

37:28

Next question, just to clarify, the test environment will apply to leasing, not just sale and finance of motor vehicles.

37:38

Pass that one over to you, David.

37:44

Yes, that's right. It would be any transaction that can happen within an auto dealership.

37:54

Thanks. Next question is for Jay.

37:58

Would a digital direct carrier meet the requirements for licensing?

38:02

could a carrier's computer terminal, oh, I'm sorry, I read that one already.

38:07

Sorry for that, that was a repeat question.

38:09

The next question, I will pass it over to Scott.

38:13

Will FSRA write a standard consumer disclosure form or would each participant be required to write one?

38:22

Yeah, so, you know, Rosie articulated the different elements that we'd expect to see in a consumer form and we'd be, you know, drafting language for each of those specific requirements and there might be elements that are specific to a model that, you know, applicants have approved would have to include, but we would have standard language for many of those elements that we're requiring as part of the form.

38:46

Thanks Scott.

38:48

Our next question is, are you offering both personal and commercial insurance?

38:52

David?

38:59

Yes.

38:59

Right now we would consider any of the insurance products that come in through the application process.

39:08

Great, thanks.

39:09

Next question, consumer protections during the test.

39:13

Will there be a similar requirement post-test or is this still under consideration?

39:19

Pafez?

39:21

Sure, so consumer protection is a core focus of the whole point of sale TLE.

39:26

So during the test, depending on the nature of the proposed models and customer journeys, FSRA has the ability to enhance consumer protection measures and tailor projects to address emerging risks to consumers alongside existing measures.

39:39

So again, post TLE, outside the TLE, consumer protection is still valid.

39:44

The same protections would apply and the same existing measures would need to be enforced even outside of the point of sale TLE.

39:53

So for the TLE, they may be specific requirements because of what the model is proposed, but outside of that model, the same consumer protections that are still existing would apply.

40:05

Great, thank you. So this next question is for you, Scott.

40:09

What channels of communication should we use to reach out to you in advance of submitting a proposal? Yeah, thanks Stephanie.

40:22

So I think like Stephanie mentioned, and I think should be included on one of the slides, we do have a dedicated email address for this specific TLE.

40:34

So it's pointofsailtleatfsrao.ca.

40:38

You can reach out to us there.

40:41

Alternatively, you can reach out to anyone on the call today and we'd be happy to field your inquiry or request.

40:48

And maybe I'll reiterate again, since I've been talking about this a lot anyways, but we do really encourage you to reach out in advance if you are considering, you know, submitting an application.

40:57

We'd really like to learn more about it and understand whether it falls within the scope and, you know, we can let you know about specific information we'd want to see included in a formal application.

41:12

Great. Thank you. Next question. Is the program dealer or manufacturer specific, e.g. I can own a BMW and a Honda dealership.

41:23

As the distributor, do they have to be rated using the same criteria?

41:30

David, maybe I'll hand this one over to you.

41:34

Yes, the rating, excuse me, the rating would be through the insurers filed and approved risk and rate classifications.

41:46

Thanks, David.

41:46

Our next question is, high-level explanation, what is the process of the dealer and broker involvement to a consumer purchasing a vehicle?

42:00

Hafez?

42:12

Sorry, can you repeat that question?

42:15

On a high level, using a high-level explanation, what is the process of the dealer and broker involvement to a consumer purchasing a vehicle?

42:27

So again, the dealer and the broker have separate roles, right?

42:33

So there's the sale of the vehicle and the purchasing of insurance.

42:36

And again, the purchase of insurance is through a licensed agent or broker.

42:41

And the purchase of the vehicle is through a licensed salesperson.

42:43

So again, those two are distinct.

42:47

And so that's what we want to try to keep to reduce conflict of interest.

42:52

But again, the sale of the vehicle is a separate process and sale of insurance is also a separate process. Great. Thanks, Hafiz. Our next question is for Jay.

43:04

Would it be a pool of insurers offering insurance on different products as all insurers may not offer coverage on all products, especially high-end luxury vehicles? Thanks, Stephanie.

43:22

So the normal rules of auto insurance would apply.

43:26

This is just about distribution.

43:28

So most insurers are going to have rules on what type of business they write and the question is correct.

43:33

A lot of the standard insurers are going to have a rule that sort of says a car worth more than a certain amount of money we don't insure being the high-end luxury cars.

43:44

My suggestion would be if you own a dealership that is selling high-end luxury cars you talk to and look for somebody that works in that space as a broker or insurer.

43:54

Similarly, if you're somebody that sells, you know, the average consumer car, you know, family sedan, SUV, that you talk to an insurer who provides products for those.

44:05

All vehicles sold in Ontario do have insurers that provide coverage, so there should be matches out there.

44:11

As far as using a pool element, certainly that's legally possible, but that's not something I think we've seen in the market historically.

44:18

And again, because this is about distribution, there's not necessarily a pool aspect that we've seen, but certainly, if somebody had ideas, it's something we can talk about.

44:31

Great. Thanks, Jay. This next one is for you as well.

44:34

Will one dealership be able to accept proposals by more than one intermediary?

44:45

So I think we could look at that.

44:47

There's going to be rules about mixing up agent and broker intermediaries, that would come into play, but it is also possible to have different ways to do it.

44:57

So for example, if a dealer has multiple locations, they might be able to have a different partner at different locations, things like that.

45:03

So those are certainly the types of questions that are important to come in and talk to us with specific situations in mind.

45:10

Great, thanks. This next one is also for you, Jay.

45:14

Are you saying, Jay, that the dealership is not allowed to receive compensation as a result of the sale of insurance within their dealership unless they were licensed?

45:28

Well, so technically, the way the law is written, it's not on the receiving the payment is legal, it's making the payment that's illegal.

45:36

So it would be offsides for the insurer or agent, broker, partner to make the payment to the dealership.

45:42

The dealership itself receiving the payment is enough size, but aside from that legal technicality, the answer to that is correct in order to make money off of this or insurance in general, one has to be licensed as an agent or broker in Ontario.

45:55

And that is true for pretty much all insurance.

45:59

Great, thanks.

46:01

Our next question, could UBI be combined in the TLE and will FSRA be able to meet a July date?

46:09

So David or Jay, if either of you could weigh in on that.

46:17

Yeah, I can say, again, if an insurer has a UBI product that's already available, then they can definitely be offered.

46:26

Any insurance product that's currently sold through an agent or broker that's already approved for any given insurer can be sold through this process as well.

46:39

So I'd add to that, again, this is about distribution.

46:43

UBI, or for those that don't know, is usage-based insurance, which is sort of where they'll put a tracker that kind of sees how you drive to decide whether you're a high-risk or low-risk driver and then adjusts your rates accordingly.

46:54

That's an area of lots of new technology.

46:57

There's lots of exciting things in that space.

47:00

We're very interested in speaking to people about that in any context, including the TLE.

47:05

So if you have UBI ideas or programs or technologies, that's certainly something we would be very interested in engaging with.

47:12

Her next question, how does this differ from a dealership having a referral program with a broker right now, if the motor vehicle dealership has to refer them to a licensed agent anyway?

47:27

David, could you take that one?

47:31

Yeah, the difference right now is the prohibition that's being lifted is that broker or agent can actually be within the confines of the dealership, which where today you cannot be.

47:42

It's totally understood that, as Jay mentioned earlier, there's probably dealers out there that say, hey, I've got a good agent or broker, if you don't have one, and that's perfectly fine.

47:52

But today, that agent or broker cannot come within the confines of the dealership to meet the customer.

47:59

With the TLE, they're able to do so.

48:03

Thanks, David.

48:04

I want to add to that, Stephanie.

48:07

The referral fee element of that, sort of connecting to what I talked about, there are rules on referral fees with brokers.

48:14

Those rules don't apply to agents.

48:17

So I think that's an important thing to be cognizant of if someone's thinking about how they respond to that question.

48:22

And then the other thing is referral fees are not the same as the compensation of the commission income that I was talking about in my last answer.

48:33

Great, thanks for that.

48:35

Our next question is what parameters are in place with FSRA to ensure there is diversity among insurers associated with dealerships to avoid funneling prospective business to the same insurer repeatedly?

48:51

Jay, maybe if you could take that one.

48:54

Sorry, could you repeat the question Stephanie?

48:56

Sure.

49:00

What parameters are in place with FSRA to ensure there is diversity among insurers associated with dealerships to avoid funneling prospective business to the same insurer repeatedly?

49:18

So there aren't safeguards, but that's also not one of the intended outcomes.

49:22

We know today there are some insurers that have partnerships with certain OEMs or original equipment manufacturers or the people that actually make the cars with insurance programs today.

49:35

And there's programs like that we see in the US that you can see OEMs bringing to Canada.

49:41

So, when they do that, they do tend to funnel to one insurer.

49:45

That will really be the decision of the person setting up a particular partnership, how they want to set it up.

49:50

If they want an exclusive arrangement with one insurer, they're likely going to need to use an agent model.

49:54

If they want to have the opportunity to have a number or two or more insurers, then they need to be using a broker model.

50:01

And in Ontario, for those who don't know, that's the key difference.

50:04

A broker generally sells for two or more insurance companies, and an agent is exclusive to one company. Thanks, Jane. Our next question is for Hafiz.

50:16

Could the cost of insurance be bundled into the sale price and or lease of the vehicle?

50:27

So in terms of bundling, the main bundling is through home and auto insurance.

50:31

And if you were talking about embedded insurance or like an embedded insurance product, then again, interested parties are encouraged to reach out to FSRA to discuss potential We're open to considering proposals that fall under the scope of the POS TLE and meet the core requirements.

50:49

We also encourage those interested in this to consider some of the considerations set out in FSRA's guidance on innovative auto insurance product subscriptions, which is also found on our website.

51:00

Great, thank you.

51:01

Our next question, will FSRA confirm that tides selling is prohibited under the TLE?

51:09

Scott, I'll pass this one to you.

51:14

Yes.

51:18

Great.

51:19

Our next question, will the TLE also be able to look at changes in the claims process?

51:27

Hafez, do you want to take that one?

51:30

So we're not looking at changing any other processes, it's again just the distribution model of selling insurance at auto dealerships, so your claims and the claims process would not be impacted by that.

51:44

It would continue the same as what's outlined in the insurance contract.

51:52

Thank you.

51:53

I want to add to that.

51:54

I think just because it's not part of the TLE, the visitors are still very interested in talking about that.

51:59

So people have ideas of how to change and improve claims processes that might be related to a program like this.

52:05

That's certainly something we're happy to talk about.

52:07

Just because it doesn't technically fit in the tele doesn't mean there aren't other opportunities to work with people to provide other sort of innovative opportunities that we can help facilitate. Thanks, Jay. Our next question is for Scott.

52:22

Will the guidelines be clear to separate any discussions around the financing or leasing of the vehicle and any insurance discussion?

52:32

For example, to uphold provisions in the Bank that insurance cannot be offered at the point of granting credits?

52:44

Yes, we are expecting that those discussions are separate as part of the TLE.

52:52

All other existing legal and regulatory requirements should also be adhered to, but we do expect, like I mentioned earlier, to answer those processes to be separate and distinct.

53:04

Thanks, Scott.

53:05

Next question is, do dealerships need to become a licensed insurance broker before establishing a partnership with a licensed distributor?

53:17

Hafez?

53:20

So, no, a dealership would not become a licensed insurance broker.

53:24

Dealerships already are licensed by OMBIC, and the brokerage is already licensed because licensing is separate.

53:33

Again, what we're trying to do is have licensed insurance agents and brokers sell insurance at a motor vehicle dealership.

53:44

So we're just changing the place where the insurance is sold rather than having a new licensing regime.

53:54

Thanks, Hafaz.

53:55

Our next question is, can a dealership become a licensed insurance broker and have a dedicated licensed insurance agent, not in the sales process, providing the insurance quotes and products.

54:11

David? Yes, we would consider that. It's a process for sure.

54:20

But yeah, if somebody wanted to go ahead, Jay? So under the REBO rules, there's going to be challenges with that type of mixing.

54:28

So I agree with David. Fister might be okay with it.

54:30

But if you're using an insurance brokerage structure.

54:32

There are more restrictive rules with REBO, and REBO has a process where there's a committee that oversees providing exemptions that would need to be worked through.

54:42

So we wouldn't have the, Fisher wouldn't have the authority, we would have to work closely with REBO to facilitate anything like that. If it's just an agent, then we're able to do that. Thanks, Jay.

54:53

I'm going to pass the next one over to you as well.

54:55

I understand the point of the TLE, but I have a question about current environment. Could a dealer rent space in their dealership to a broker?

55:07

The assumption would be that there would be no other compensation to the dealership or their staff.

55:15

So so much of the last answer I gave.

55:18

If the question is specific to broker, there's specific rules that Rebo has provided dealing with shared space.

55:25

And so that's not something Fisher can address, but that's that that would need to be worked out with Rebo.

55:30

If the question was tweaked slightly and was about an insurance agent, then there are no shared space restrictions on agents.

55:39

So there wouldn't be anything limiting that.

55:42

There are, however, legal risks in doing that because certainly it's very easy to, you know, share space and have your processes start to cross the line where your offsides either selling, having the sale of insurance being integrated with the sale of the which would be where you need our exemption or that that your offsides the omvic legislation as far as you know making sure the invoice has all the pricing in and all the other stuff that certainly is outside our expertise but those in the dealership world you know I think know those rules well. Thanks Jay.

56:15

Our next question is will there be any more consumer protection measures included within the TLE? HFES or Scott? I can take that one, HFES. The short answer is yes.

56:34

Once we start to see applications coming in and the specific models that are being proposed, there may be additional safeguards that are more specific to those models that we look to put in place to make sure that consumers are protected throughout the duration of the test.

56:50

But again, really once we start to see the specifics of what you know people are proposing that we'll get to that point. Thanks Con.

57:02

Our next question for David will insurance rates be higher for consumers buying insurance at the point of sale within the TLE? No the short answer is no.

57:16

The insurers still have their filed and approved rates and those would continue through the TLE.

57:21

Thank you.

57:24

Next question.

57:25

Will participants and projects under the TLE be public?

57:30

Scott?

57:33

Yes.

57:35

So, this is similar to the approach we've taken with the Territories TLE, which is another auto insurance focused TLE that is live right now.

57:44

We do plan on publishing the names of approved point of sale TLE participants on our website.

57:53

I'm just mindful of time, so the next two questions will be our last questions.

57:59

I'm going to pass this to David.

58:01

Will this TLE be restricted to the sale of auto insurance within the physical building of an auto dealership?

58:13

I'll say yes, because the TLE is actually removing the restriction.

58:18

Otherwise, you have just what you have today.

58:21

But realistically, a broker agent can start that conversation in the dealership and move it outside.

58:27

We would look at multiple models as they get proposed.

58:31

Great, thanks. And I'm sorry with that, that will be our last question.

58:37

Thank you everyone for taking the time to be with us this morning.

58:41

I would also like to remind you that a link to the recording on the FSRA website will be sent next week.

58:47

We hope you found this information helpful and we hope you enjoy the rest of your day.

58:52

Thank you.