L&H Insurance Technical Advisory Committee (TAC):
Insurer Oversight of MGAs
Meeting summary
Date: June 2, 2023
Time: 9:30 – 11:00 AM ET
1. Opening remarks
FSRA opened the meeting and welcomed new members.
- Amy Stahlke, Sun Life, replacing Matthew Onyeaju
- Heidi MacDonald, Financial Horizons Group, replacing David Stewart
- Patricia Ziegler, Empire Life, replacing Paul Holba
FSRA noted that the objective of the TAC meeting is to update members on the proposed regulatory framework for Life & Health (L&H) MGAs.
2. Regulatory framework update
I. Overview
FSRA outlined plans to strengthen the regulatory framework through the implementation of a proposed Rule and Interpretation Guidance. The aim of the changes is to establish practical, outcomes-focused standards and requirements to address customer related issues FSRA identified through its supervisory work.
II. Supervisory activities
Over the last three to four years, FSRA has reviewed L&H MGAs from different perspectives: from MGAs, the insurers that delegate activities to them, and the agents MGAs recruit and contract with to solicit the insurers’ products. FSRA found rapid growth of some MGAs with significant increases in new recruits and agents, inexperienced agents selling complex products, a lack of appropriate agent training, and a lack of adequate controls to screen and monitor the suitability of agents.
III. Policy approach
To address the supervision findings, FSRA is developing a regulatory framework in which insurers and intermediaries involved in the distribution of L&H insurance operate to high compliance standards, resulting in consistent and fair outcomes for L&H insurance customers. This includes:
- MGAs to have clear compliance obligations and being subject to, and accountable for, appropriate regulatory requirements and best practices
- insurers to achieve their compliance obligations with consistently robust compliance programs that oversee MGAs’ contractual obligations and compliance in relation to the regulatory framework
- customers to have access to appropriate L&H insurance products that deliver reasonably expected benefits and can make informed decisions based on having access to educated and professional life agents equipped to provide fair advice and pertinent information based on the consumers’ needs
IV. Proposed rule outline
FSRA provided an overview of the proposed MGA Rule. The overarching aim of the proposed Rule is to provide consistent and fair outcomes for customers. The scope of the Rule will be activity based; it will not only include MGAs, but intermediaries that are performing targeted activities that have the potential for causing customer harm. The Rule will create new obligations and prohibitions that FSRA may enforce against.
V. Proposed Guidance
The proposed Guidance will clarify agent suitability requirements under the Ontario Insurance Act. It will apply to applicants and life insurance agents (individuals, corporates, and partnerships). It will also outline key factors and circumstances FSRA will consider when assessing the suitability of a person for licensing, including additional suitability factors for MGAs.
3. Next steps
FSRA encouraged TAC members to provide feedback on the planned changes to the regulatory framework.
FSRA will schedule the next MGA TAC meeting for later in 2023.
Attendance
| Invited/Attended |
Company |
Attendance |
|---|---|---|
| Adam Barrett | MoF | Attended |
| Andrew Fitzpatrick | Canada Life | Attended |
| Amy Stahlke | Sun Life | Attended |
| Brent Mizzen | CLHIA | Attended |
| Carol Allen | FSRA | Attended |
| Chris Caldarelli | FSRA | Attended |
| Colin Simpson | Equitable Life | Attended |
| David Sutton | The Edge Benefits | Attended |
| David Stewart | Financial Horizons Group | Replaced |
| Erica Hiemstra | FSRA and TAC Chair | Attended |
| Erin McKee | Echelon Partners | Attended |
| Nina Kavalinas | Financial Horizons Group | Attended |
| Huston Loke | FSRA | Attended |
| Heidi MacDonald | Financial Horizons Group | Attended |
| Isaac George | MoF | Attended |
| John Caldwell | FSRA | Attended |
| Jusleen Dhaliwal | MoF | Attended |
| Joel Gorlick | FSRA | Attended |
| Jason Harris | FSRA | Attended |
| John Lewsen | FSRA | Attended |
| Jelena Pejic | FSRA | Attended |
| Kirubel Abebe | FSRA | Attended |
| Kim Hayes | Manulife | Attended |
| Kevin Lim | FSRA | Attended |
| Kelly Picard | FSRA | Attended |
| Lucy Kang | MoF | Attended |
| Laura McLellan | FSRA | Attended |
| Monica Liang | MoF | Attended |
| Matthew Onyeaju | Sun Life | Replaced |
| Mari-Jayne Woodyatt | BFG Financial | Attended |
| Nathan Aranha | FSRA | Attended |
| Nathan Fahey | MoF | Attended |
| Nathan Tam | FSRA | Attended |
| Olivia Lee | FSRA | Attended |
| Paul Holba | Empire Life | Replaced |
| Patricia Ziegler | Empire Life | Attended |
| Rosemary Steffler | FSRA | Attended |
| Swati Agrawal | FSRA | Attended |
| Sohail Deen | FSRA | Attended |
| Stephen Hope | FSRA | Attended |
| Sean Sorensen | Walker Sorensen LLP | Attended |
| Sheldon Stier | Stier Financial Advisors | Attended |
| Serina Yau | FSRA | Attended |
| Tamara Brooks | FSRA | Attended |
| Terri Botosan | Hub Financial Inc. | Attended |
| Tim Miflin | FSRA | Attended |
| Teri Ryan | Equitable Life | Attended |
| Wendy Horrobin | FSRA | Attended |