Annual Report 2015-2016

Table of contents

 

​Licensing, Monitoring and Enforcement Activity

 

Across the Sectors: Statistics

Regulatory Oversight and Enforcement Activities

Public and Stakeholder Inquiries and Complaints Reporting

 

Across the Sectors: Statistics

FSCO licenses or registers individuals and businesses to provide financial services in Ontario, as well as health service providers who invoice automobile insurers through the Health Claims for Auto Insurance system for medical and rehabilitation services provided to injured auto accident benefits claimants. FSCO has conducted over 16,000 police checks in relation to licensee applications for suitability background checks and investigations.

 

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

 

The notable drop in licensing activity in the health service provider categories is a result of high registration rates by service providers in 2014-15 following legislation that came into effect December 1, 2014, requiring health service providers to be licensed to receive direct payment from insurers for listed expenses.

 

Activity2015–162014–15
Individuals
New Licences Issued
Life Insurance Agents6,4445,368
General Insurance Agents1,2211,000
Accident and Sickness Insurance Agents569461
Insurance Adjusters138203
Mortgage Brokers84140
Mortgage Agents2,8882,961
Service Providers, Sole Proprietors2741,641
 
Licences Renewed
Life Insurance Agents14,68819,497
General Insurance Agents2,9042,995
Accident and Sickness Insurance Agents341300
Insurance Adjusters1,4681,461
Mortgage Brokers*1,4245
Mortgage Agents*9,1908
Service Providers, Sole Proprietorsn/an/a
Corporations
New Licences Issued
Life and General Insurance Agencies497490
Corporate Insurance Adjusters211
Insurance Companies34
Mortgage Brokerages90106
Mortgage Administrators3126
Health Service Providers, Corporations3391,988
Health Service Providers, Partnerships22189
 
New Registrations Issued
Loan and Trust Companies
 
Licences Renewed
Life and General Insurance Agencies1,9922,624
Corporate Insurance Adjusters115112
Health Service Providers, Corporationsn/an/a
Health Service Providers, Partnershipsn/an/a
Co-operatives
Offering Statements2224
Material Change Relating to Offering
New Incorporations2318
Amendments Relating to Incorporation918
Dissolutions/Cancellations154
Conversion to Corporation
Amalgamation12
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.)6045
Amalgamations55
Dissolutions3915

* Mortgage brokers and agents are licensed for two-year periods with a common expiry date. The last common expiry date was March 31, 2016.

 

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Regulatory Oversight and Enforcement Activities

Monitoring Activities

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

 

Activity2015–162014–15
Audits
Insurance agent risk-based CE audit
Errors and Omissions Insurance
– Life Insurance Agents656
– Mortgage Brokerages
Complaint Reviews
Insurance Companies219253
Insurance Agents145257
Mortgage Brokerages/Administrators10968
Mortgage Brokers12374
Mortgage Agents150114
Credit Unions7625
Loan and Trust Companies96
Health Care Providers167
Pension Plans186159
Total1,033963
On-site Examinations
Health Service Providers434296
Insurance Companies138
Mortgage Brokerages and/or Administrators35166
Pension Plans*5550

* 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, appropriate enforcement action.

 

Actions Related to Insurance Sector

 

Type2015–162014–15
Insurance Agents
Licence Refusals175
Licences Revoked166
Licences Suspended85
Letters of Caution14
Letters of Warning1822
Compliance Order2
Administrative Monetary Penalties (AMP)
Total AMP Orders Issued5449
Total AMP Amount Ordered$68,467$64,923
Corporate Insurance Agencies
Administrative Monetary Penalties  
Total AMP Orders Issued 1 –
Total AMP Amount Ordered$2,250
Automobile Insurance Companies
Letters of Caution10
Administrative Monetary Penalties  
Total AMP Orders Issued 1 –
Total AMP Amount Ordered$19,000
Health Service Providers
Licence Refusals62
Licence Revocations12
Administrative Monetary Penalties  
Orders Issued5
Amount Ordered$600,000
Dispute Resolution Penalties
Special awards against Insurers108
Expense orders against representatives

 

 

Actions Related to Mortgage Brokering Sector

 

Type2015–162014–15
Mortgage Brokerages and Administrators
Licence Refusals
Licence Suspensions32
Licence Revocations136
Compliance Orders4
Mortgage Brokers
Licence Refusals1
Licence Suspensions22
Licence Revocations24
Letters of Caution75
Compliance Orders3
Mortgage Agents
Licence Refusals33
Licence Suspensions22
Licence Revocations52
Letters of Caution1316
Administrative Monetary Penalties
Annual Information Return
Orders Issued
Amount Ordered
Errors & Omissions Insurance
Orders Issued2
Amount Ordered$4,600
Unlicensed Activity  
Orders Issued12
Amount Ordered$5,000$1,000
False Information to Superintendent  
Orders Issued1
Amount Ordered$3,000
Other Standards of Practice Violations  
Orders Issued166
Amount Ordered$25,250$6,500
Disclosure  
Orders Issued14
Amount Ordered$18,000
Total AMP Orders Issued3111
Total AMP Amount Ordered$48,250$15,100

 

 

Cease and Desist Orders and Prosecutions by Statute

 

Type2015–162014–15
Cease and Desist Orders
Insurance Act33
Mortgage Brokerages, Lenders and Administrators Act, 200631
Loan and Trust Corporations Act
Completed Prosecutions
Insurance Act710
Mortgage Brokerages, Lenders and Administrators Act, 2006 1
Loan and Trust Corporations Act
Pension Benefits Act

 

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Public and Stakeholder Inquiries and Complaints Reporting

Beyond its oversight activities, FSCO undertakes consumer inquiry and complaint processes to answer consumer and stakeholder questions. These processes help identify practices that may be harmful to consumers and the marketplace or that may violate legislation, regulations or FSCO’s rules and procedures. Inquiry and complaint data also alert FSCO to potential problems that may require consumer education efforts or other regulatory intervention.

 

FSCO provides accurate, up-to-date information to consumers to help them make informed choices about products and services available in the marketplace. The following data shows the number of inquiries and complaints handled by FSCO in fiscal 2015-16.

 

Public and Stakeholder Inquiries

FSCO staff respond to telephone inquiries and correspondence from both the public and stakeholders, providing information about legislation and regulations FSCO administers as well as FSCO’s processes.

 

Public and Stakeholder Inquiries 

Description of Public and Stakeholder Inquiries image [New Window]

  

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

 

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.

 

Insurance companies in Ontario 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 industry ombudservice. 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 also required to designate an individual to receive and attempt to resolve complaints. They must also keep a record of written complaints and responses. Parties making a complaint must also be advised to contact FSCO if they believe there has been a violation of the legislation or regulations.

 

FSCO inquires into complaints that allege non-compliance with legislation or regulations in any of the regulated sectors. Visit FSCO’s web site for complaint procedures and contact information.

 

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. FSCO does take enforcement action where there has been a contravention.

 

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]

 

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