Monitoring and Enforcement - Glossary of Terms

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oneAdministrative monetary penalties (AMPs):
 
Administrative monetary penalties (AMPs) are monetary penalties that are assessed and imposed against a licence holder for contravention of a legal requirement. AMPs are imposed by the Superintendent or the Financial Services Tribunal instead of a court. The main purposes of AMPs are to encourage compliance with regulatory requirements and to prevent a licence holder from deriving an economic benefit as a result of contravening or failing to comply with a legal requirement. 
 
twoAdvisory Board Hearings:
 
[Information] Please Note: The Advisory Board Hearing Process is only applicable to a Notice of Proposal that has been issued on or before December 31, 2014. If the Notice has been issued after January 1, 2015, the Financial Services Tribunal (FST) has jurisdiction, see The FST’s website [New Window] for further information.
 
An Advisory Board established under the Insurance Act assists in determining the granting or refusal of a new licence or the possible revocation or suspension of an existing licence for insurance agents and adjusters. The Superintendent of Financial Services will appoint an Advisory Board constituted under the Insurance Act, when an applicant or licensee responds to a Notice of Proposed Hearing with a written request for a hearing.
 
The Advisory Board consists of:
 
  • The Chair (a representative of the Superintendent)
  • A representative of insurers
  • A representative of agents or adjusters  
The Board holds hearings to determine the granting or refusal of a new licence or the possible revocation or suspension of an existing licence for insurance agents and adjusters.
 
The Rules of Practice and Procedure for Hearings Before an Advisory Board and the Statutory Powers Procedure Act apply to a hearing before an Advisory Board.
 
The Advisory Board hears evidence and submissions on the law, and then prepares a written report including recommendations, on the application or licensing status of an agent or adjuster for the Superintendent. The Superintendent will consider the report and then makes a decision by issuing an order.
 
 
threeApplication Denied:
 
Persons who apply for a licence or registration issued by the Superintendent may have their application denied if they do not meet the qualifications or requirements set out in legislation and regulations.
 
 
fourCease & Desist Orders:
 
The Superintendent may under certain statutes issue, or propose to issue, a cease and desist order directed towards persons engaging in conduct that is in contravention of a statute.
 
 
fiveCharges Laid In Ontario Court Of Justice:
 
Offences under the various statutes administered by FSCO proceed by way of charges before the Ontario Court of Justice under the Provincial Offences Act. Charges are laid when the defendant is served with sworn information setting out the charge(s).
 
 
sixClosed Files:
 
Cases may be closed if there is insufficient evidence to support the allegations, or if the allegations are unfound
ed.
 
 
sevenComplaint Reviews
 
FSCO reviews complaints and reports of misconduct and non-compliance with legislation and regulations in the sectors it regulates.
 
 
Statistics reflect number of complaints closed in a particular quarter.
 
 
eightConditional Licences (Or Registrations):
 
The Superintendent may issue licenses or registrations with terms and conditions in certain circumstances.
 
nineContinuing Education Audits:
 
Life insurance agents are required to complete 30 hours of Continuing Education (CE) credits within each two year licensing period. CE credits cannot be carried over from one licensing period to another.
 
Life insurance agents attest to the completion of CE when renewing their licence. FSCO conducts random audits of agents to ensure CE compliance.
 
 
tenConvictions:
 
Persons found guilty of an offence, either as a result of a guilty plea or after a trial, have registered against them a conviction under the Provincial Offences Act.
 
 
elevenCo-operative Corporations:
 
The Financial Services Commission of Ontario (FSCO) regulates registration of organizations who conduct business as a co-operative under the Co-operative Corporations Act [New Window]. There are many types of co-operatives. Usually members have a common interest/goal (e.g., housing co-operative, agriculture). Co-operatives differ from other public companies in that each of their members has one vote only, despite the number of shares they hold.
 
 
twelveCredit Unions & Caisses Populaires:
 
The Financial Services Commission of Ontario (FSCO) regulates registration of credit unions and caisses populaires under the Credit Unions and Caisses Populaires Act, 1994 [New Window].
 
Credit unions/Caisses Populaires are community based financial institutions and most offer a full range of services. All are owned and controlled by members who are also shareholders. Credit unions are regulated provincially and insured by a stabilization fund, deposit insurance or guarantee corporation.
 
 
thirteenCriminal Record Checks:
 
FSCO performs police checks on the background of paralegals/SABS representatives and existing/prospective insurance agents with the Canadian Police Information Centre.
 
 
fourteenDispute Resolution Services (DRS):
 
The Financial Services Commission of Ontario (FSCO) provides Dispute Resolution Services (DRS) to help claimants and insurance companies (the parties) resolve disputes about automobile accident benefits. Services include mediation and arbitration where the application was received by March 31, 2016; and appeals and variation/revocation where the application for arbitration was received by March 31, 2016.
 
 
fifteenErrors & Ommissions Insurance Audits:
 
Life insurance agents are required by law to have errors and omissions (E&O) insurance with limits of at least $1 million to cover a single occurrence, and at least $2 million in the aggregate. It must also include extended coverage for loss resulting from fraudulent acts.
 
FSCO conducts random audits of agents to ensure E&O compliance.
 
 
sixteenFinancial Services Tribunal (FST):
 
The Financial Services Tribunal [New Window] is an independent, adjudicative body composed of nine to 15 members, including the Chair and two Vice-Chairs. The Tribunal has exclusive jurisdiction to exercise the powers conferred under the Financial Services Commission of Ontario Act, 1997 [New Window] and other Acts that confer powers on or assign duties to the Tribunal. It also has exclusive jurisdiction to determine all questions of fact or law that arise in any proceeding before it. As well, the Tribunal has authority to make rules for the practice and procedure to be observed in a proceeding before it and to order a party to a proceeding before it to pay the costs of another party or the Tribunal's costs of the proceeding.
 
 
seventeenFines:
 
Upon conviction under the Provincial Offences Act, a person may be fined an amount as determined by the Court within the maximum limits set out in the relevant statute under which the person was prosecuted.
 
 
eighteenHealth Care Providers:
 
While FSCO does not regulate health care providers, there are provisions within the Insurance Act and its regulations that may be applicable to those providers who deliver Statutory Accident Benefits to injured drivers.
 
Alleged contraventions of the Act or its regulations may be subject to review and investigation by FSCO.
 
 
nineteenHearings Before The Superintendent:
 
In several of the statues administered by the Financial Services Commission of Ontario, certain matters may require a hearing before the Superintendent of Financial Services. Such a hearing can occur only in specific limited circumstances which are set out in the relevant statute. While the majority of hearings for regulatory action taken by the Superintendent are before the Financial Services Tribunal, there are provisions within the Credit Unions and Caisses Populaires Act [New Window] and the Loan and Trust Corporations Act [New Window] which provide for the possibility of a hearing before the Superintendent or his or her delegate.
 
As an example, the Superintendent may hold a hearing under section 101 of the Credit Unions and Caisses Populaires Act to consider the fitness of a credit union director to hold office. In addition, section 65 of the Loan and Trust Corporations Act provides for a hearing before the Superintendent if the Superintendent proposes to refuse consent to the transfer of voting shares in certain circumstances.
 
 
twentyInsurance Agents:
 
The Financial Services Commission of Ontario (FSCO) issues licenses authorizing persons to conduct business as insurance agents. There are three classes of agent licenses.

  • Life Insurance (Including Accident & Sickness)
  • Accident & Sickness
  • General
Agents listed may hold a combination of the insurance licenses listed above. An insurance licence is issued by FSCO for a two-year term.
 
 
twentyoneInsurance Companies:
 
The Financial Services Commission of Ontario (FSCO) is responsible for licensing insurance companies in Ontario.FSCO does not provide ratings of insurance companies or recommendations.
 
 
twentytwoJudicial Reviews:
 
Judicial reviews are applications heard by a panel of judges of the Superior Court of Justice in which decisions made by administrative tribunals are subject to judicial scrutiny. Judicial reviews are not appeals and may be brought by a party to a decision even though there is no statutory right of appeal.
 
 
twentythreeLetters Of Caution:
 
In some instances, the Superintendent may determine that issuing a letter of caution to a person alleged to have engaged in some form of minor misconduct will address the misconduct without the necessity of issuing a formal proceeding.
 
 
twentyfourLoan & Trust Corporations:
 
The Financial Services Commission of Ontario (FSCO) regulates the registration of organizations to conduct business as a loan company or a trust company.
 
twentyfiveMortgage Brokers:
 
A mortgage broker acts as a middleman who serves to bring borrowers together with lenders.
The Financial Services Commission of Ontario (FSCO) regulates registration of individuals and organizations who conduct business as mortgage brokers under the Mortgage Brokerages, Lenders and Administrators Act [New Window]. In addition, FSCO conducts inspections and investigates complaints regarding the activities of mortgage brokers.
 
 
twentysixMinutes Of Settlement:
 
Minutes of Settlement is an agreement in writing in which a proceeding before FSCO is resolved without a hearing.
 
 
twentysevenOnsite Compliance Exams/Inspections:
 
FSCO conducts on-site examinations or inspections of regulated entities to ensure compliance with governing legislation, as well as orders and undertakings issued by the Superintendent of Financial Service. Inspections may occur when issues are raised as a result of actions by or complaints about a regulated entity. Examinations assist in verifying that the requirements of an order or undertaking are implemented and to make recommendations when appropriate.
 
 
twentyeightParalegals/SABS Representatives:
 
On or after May 1, 2008, only individuals who are licenced to provide legal services or who are exempt from licensing requirements under the Law Society Act and By-Laws can represent claimants in the dispute resolution process at FSCO.
 
FSCO will continue complaint and enforcement proceedings against SABS representatives for compliance issues that arose prior to May 1, 2008. Although the Law Society now regulates paralegals and SABS representatives, complaints regarding contraventions of the Insurance Act and regulations, including unfair or deceptive acts or practices, should still be directed to FSCO's attention.
 
Information regarding paralegal regulation is available on the Law Society’s website at www.lsuc.on.ca [New Window]. Individuals also can send any questions they may have to the Law Society via e-mail at: lawsociety@lsuc.on.ca, or call 1-800-668-7380 or 416-947-3315.
 
 
twentyninePensions:
 
Every employer who establishes an employment pension plan that is subject to the Pension Benefits Act [New Window] must submit the pension plan to the Financial Services Commission (FSCO) for registration. FSCO ensures that employment pension plans comply with the standards set out in the Act and regulations. The Act establishes minimum standards for administering and funding pension plans and benefits which are subject to the Act.
 
 
thirtyProsecutions:
 
Persons contravening a statute or regulation enforced by the Superintendent may be guilty of an offence and subject to prosecution before the Ontario Court of Justice under the provisions of the Provincial Offences Act.
 
 
thirtyoneRegulatory Actions And Related Hearings:
 
Under the Insurance Act [New Window], if the Superintendent intends to make an Order, a notice must first be given to those who may be affected and an opportunity for a hearing must be provided. Where there is a request for a hearing, the Financial Services Tribunal (FST) will hear the matter and decide whether or not the proposed Order should be made. Where there is no request for a hearing, the Superintendent may make the Order set out in the notice.
 
Where the Superintendent is of the opinion that the interests of the public may be prejudiced or adversely affected by any delay in the issuance of a permanent order, the Superintendent, without prior notice, may make an interim or temporary order which shall take effect immediately on its making, and which shall become permanent on the 15th day after its making unless within that time the person requests a hearing before the FST.
 
 
thirtytwoRevocations:
 
Licenses or registrations issued by the Superintendent may be revoked as a result of misconduct on the part of the person holding the licence or registration.
 
 
thirtythreeSurrenders:
 
Persons licensed or registered by the Financial Services Commission of Ontario (FSCO) may in certain circumstances surrender or give up their licence or registration. This is often done by way of minutes of settlement.
 
 
thirtyfourSuspensions:
 
The suspension of a licence is the temporary withdrawal (usually for a set period of time), of a licence holder’s privileges to conduct or solicit business. A licence is suspended when a person or entity has engaged in misconduct, that is not considered significant enough to warrant revoking the licence or where there are mitigating circumstances. The person’s or entity’s licence may be reinstated when the suspension period ends or the condition that led to the suspension is corrected. Once the licence is reinstated, the person or entity may resume licensed business activities. The purpose of a suspension is to protect the public by encouraging compliance with laws and regulations.
 
 
thirtyfiveUnfair Or Deceptive Acts Or Practices:
 
"Unfair or deceptive acts or practices" are defined in the Insurance Act Ontario Regulation 7/00 [New Window].