Annual Report 2014-2015

Table of contents

 

Licensing, Monitoring and Enforcement Activity Across the Sectors: Statistics

 

Licensing Activities

Regulatory Oversight and Enforcement Activities

Advisory Board Activities

Public and Stakeholder Inquiries and Complaints Reporting

 

FSCO licenses or registers individuals and businesses to provide financial services in Ontario. It monitors compliance with legislation and regulations and follows up with enforcement action where necessary.

 

In 2014-15, FSCO also began licencing service providers that invoice automobile insurers through the Health Claims for Auto Insurance system for specified goods or services (“listed expenses”) provided to injured auto accident benefits claimants.

 

FSCO monitors compliance with legislation and regulations and follows up w ith enforcement action where necessary.

Licensing Activities

Activity2014–152013–14
Individuals
New Licences Issued
Life Insurance Agents5,3684,996
General Insurance Agents1,000823
Accident and Sickness Insurance Agents461444
Insurance Adjusters203297
Mortgage Brokers14061
Mortgage Agents2,9612,408
Service Providers, Sole Proprietors1,641n/a
 
Licences Renewed
Life Insurance Agents19,49713,592
General Insurance Agents2,9952,811
Accident and Sickness Insurance Agents300325
Insurance Adjusters1,4611,561
Mortgage Brokers*52,415
Mortgage Agents*88,053
Service Providers, Sole Proprietorsn/an/a
Corporations
New Licences Issued
Life and General Insurance Agencies490457
Corporate Insurance Adjusters110
Insurance Companies46
Mortgage Brokerages106128
Mortgage Administrators2616
Service Providers, Corporations1,988n/a
Service Providers, Partnerships189n/a
New Registrations Issued
Loan and Trust Companies
Licences Renewed
Life and General Insurance Agencies2,6241,738
Corporate Insurance Adjusters11215
Service Providers, Corporationsn/an/a
Service Providers, Partnershipsn/an/a
Co-operatives
Offering Statements2423
Material Change Relating to Offering
New Incorporations1847
Amendments Relating to Incorporation1818
Dissolutions/Cancellations46
Conversion to Corporation
Amalgamation21
Credit Unions/Caisses Populaires
New Incorporations
Applications Required for Approval/Filing (including applications for articles of amendment, name changes, by-law amendments, offering statements, etc.)4558
Amalgamations55
Dissolutions15

* Mortgage broker and agent licences are two-year licences with a common expiry date. The last common expiry date was March 31, 2014.

 

Return to top

Regulatory Oversight and Enforcement Activities

Monitoring Activities

FSCO undertakes a number of monitoring activities as part of its regulatory functions. It conducts police background checks, compliance audits, and reviews complaints in the sectors it regulates.

 

Activity2014–152013–14
Police Checks
Insurance Agent Licence Applications14,37210,453
Mortgage Broker and Agent Applications1,9762,085
Service Providers5,842
Audits
Insurance agent risk-based CE audit50
Errors and Omissions Insurance
– Life Insurance Agents656330
– Mortgage Brokerages
Complaint Reviews
Insurance Companies253490
Insurance Agents257225
Mortgage Brokerages/Administrators68101
Mortgage Brokers7469
Mortgage Agents114111
Credit Unions2535
Loan and Trust Companies67
Health Care Providers710
Pension Plans159243
Total9631,291
On-site Examinations
Service Providers296n/a
Insurance Companies88
Mortgage Brokerages and/or Administrators166105
Pension Plans*5050

* See On-site Examination Program in Pension Plans section for more information.

 

Enforcement Actions

To protect consumers and enhance public confidence, FSCO monitors, investigates and, where there is non-compliance with legislation and regulations, takes appropriate enforcement action against the sectors it regulates.

 

Actions Related to Insurance Sector

 

Type2014–152013–14
Insurance Agents
Licence Refusals5
Licences Revoked63
Licences Suspended57
Letters of Caution425
Letters of Warning22
Administrative Monetary Penalties
– Orders Issued49
– Amount Ordered$64,923
Automobile Insurance Companies
Letters of Caution101
Service Providers
Licence Refusals2n/a
Administrative Monetary Penalties  
– Orders Issued5n/a
– Amount Ordered$600,000n/a
Dispute Resolution Penalties
Special Awards against Insurers84
Expense Orders against representatives

 

 

Actions Related to Mortgage Brokering Sector

 

Type2014–152013–14
Mortgage Brokerages and Administrators
Licence Refusals
Licence Suspensions21
Licence Revocations361
Mortgage Brokers
Licence Surrenders1
Licence Suspensions21
Licence Revocations4
Letters of Caution53
Mortgage Agents
Licence Refusals34
Licence Suspensions2
Licence Revocations2
Letters of Caution1612
Administrative Monetary Penalties
Annual Information Return
– Orders Issued5
– Amount Ordered$5,000
Errors & Omissions Insurance
– Orders Issued213
– Amount Ordered$4,600$27,500
Unlicensed Activity
– Orders Issued2
– Amount Ordered$1,000
False Information to Superintendent
– Orders Issued1
– Amount Ordered$3,000
Other Standards of Practice Violations
– Orders Issued6
– Amount Ordered$6,500
Total AMP Orders Issued1118
Total AMP Amount Ordered$15,100$32,500

 

 

Cease and Desist Orders and Prosecutions by Statute

 

Type2014–152013–14
Cease and Desist Orders
Insurance Act31
Mortgage Brokerages, Lenders and Administrators Act, 2006 Loan and Trust Corporations Act1
Loan and Trust Corporations Act1
Completed Prosecutions
Insurance Act105
Mortgage Brokerages, Lenders and Administrators Act, 2006 Loan and Trust Corporations Act1
Loan and Trust Corporations Act1
Pension Benefits Act1

 

Return to top

Advisory Board Activities

Advisory Boards under the Insurance Act make recommendations to the Superintendent of Financial Services on whether to grant, renew, revoke or suspend licences of agents or adjusters.

 

Licensing issues are often resolved by minutes of settlement. Where they are not, the Superintendent appoints an Advisory Board including an agent or adjuster representative, and insurer representative and a Superintendent representative. The board holds a hearing and prepares a report to the Superintendent, who makes a decision and issues an order.

 

Effective January 1, 2015, the Financial Services Tribunal has jurisdiction 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. Cases that began before January 2015 will continue under the Advisory Board regime until their conclusion.

 

Activity2014–152013–14
Cases Pending at Beginning of Year35
New Cases Received227
Files Closed59
Cases Pending at End of Year203

 

Return to top

Public and Stakeholder Inquiries and Complaints Reporting

FSCO supplements its oversight activities with consumer inquiry and complaint processes which answer consumer and stakeholder questions. Inquiries and complaints also help FSCO to identify practices that may be harmful to consumers and the marketplace or may violate legislation, regulations or FSCO’s rules and procedures.

 

Inquiry and complaint data play a crucial role in alerting FSCO and the public to potential problems that may require consumer education efforts or other regulatory intervention. Providing accurate, up-to-date information to consumers to assist them in making informed choices about the many products and services that are available in the marketplace is important to FSCO.

 

The following data for fiscal year 2014–15, shows the number of inquiries and complaints handled by FSCO.

 

Public and Stakeholder Inquiries

Public and Stakeholder Inquiries 

Description of Public and Stakeholder Inquiries image [New Window]

  

* Non-FSCO refers to inquiries that do not pertain to FSCO’s mandate and have to be redirected.

 

 

FSCO is a valuable point of contact for both the public and stakeholders. FSCO staff respond to telephone inquiries and correspondence, providing information about legislation and regulations administered by FSCO and also about FSCO’s processes.

 

Licensing Compliance Inquiries

Licensing Compliance Inquiries

Description of Licensing Compliance Inquiries image [New Window]

 

 

Market Conduct Inquiries

Market Conduct Inquiries

Description of Market Conduct Inquiries image [New Window]

 

 

Pension Inquiries

Pension Inquiries

Description of Pension Inquiries image [New Window]

 

Complaints

As evidence of consumer dissatisfaction, complaints represent a crucial market conduct signal for both the industry and regulators. Reviewing complaints is an important component of FSCO’s risk-based approach to market conduct oversight.

 

In Ontario, insurance companies are required to designate a complaints officer to receive consumer complaints about business practices, and to refer unresolved complaints to an independent third party for review. Most insurance companies are members of a national ombudservice established by the industry. Where this is not the case, FSCO generally acts as the independent third party.

 

All mortgage brokerages, mortgage administrators, credit unions and caisses populaires are required to designate an individual to receive and attempt to resolve complaints. They must also keep a record of written complaints and responses. Moreover, parties making a complaint must be advised to contact FSCO if they believe there has been a violation of the legislation or regulations.

 

FSCO inquires into complaints alleging non-compliance with legislation or regulations in any of the regulated sectors. Complaint procedures and contact information are posted on FSCO’s website.

 

Most complaints do not result in a finding of contravention of the law. However, access to a review process is important to maintain consumer confidence in the financial services marketplace. Where there has been a contravention, FSCO takes enforcement action.

 

Market Conduct Complaints

Market Conduct Complaints

Description of Market Conduct Complaints image [New Window]

 

 

Pension Complaints

Pension Complaints

Description of Pension Complaints image [New Window]

 

Return to top