FSRA reviews life insurer supervision of MGAs to enhance consumer protection

The Financial Services Regulatory Authority of Ontario (FSRA) is committed to protecting consumers by requiring fair treatment of consumers in insurance distribution and compliance with Ontario insurance laws.

FSRA has done a review to gain a deeper understanding of life insurers’ compliance frameworks for supervising Managing General Agencies (MGAs). While no separate licence is required to operate as an MGA in Ontario, most life and health MGAs perform services that require them to be licensed as insurance agents or corporate agencies. Therefore, life and health MGAs are required to comply with the legal obligations that apply to agents. Insurers must maintain a system to oversee agents acting on their behalf to ensure they comply with the Insurance Act, its regulations, and the agent’s licence requirements. Insurers must do this for all agents, including insurer-contracted MGAs who have been delegated oversight responsibilities as well as agents who are contracted with MGAs.

FSRA found that:

  • The most prevalent way life insurance is sold is through agents who may represent more than one insurer and who are contracted with an MGA.
  • Contracts between insurers and MGAs do not explain in detail what actions MGAs are required to take, and what standards they are required to meet, for screening, training, and monitoring insurance agents.
  • Insurers lack an in-depth process to assess the risks associated with their MGAs. A comprehensive risk assessment helps insurers to identify higher risk MGAs that may require more attention.
  • Insurers do not conduct a meaningful volume of agent reviews to assess if they comply with regulatory obligations and industry best practices.

These observations are based on a review conducted between September 2020 and March 2021. FSRA reviewed a combination of large and smaller insurers in Canada. Together, these companies make up approximately 50 per cent of the Ontario life insurer market share.

FSRA will use these observations to develop a proposed regulatory framework and supervisory approach for distribution channels that rely on MGAs. FSRA also plans to build supervisory capacity to oversee insurers and agents that rely on MGAs.

Learn more

FSRA is continuing to work with those we regulate to ensure financial safety, fairness and choice for consumers and members. Learn more at