Annual Report 2016-2017

​Table of contents

 

Insurance: Enhancing Oversight

 

People, businesses and other organizations spent $48.1 billion on insurance in 2016 to help manage risk. FSCO regulates the insurance companies and individuals who provide protection for Ontarians and their belongings. Its main focus is overseeing their conduct in the marketplace, but FSCO also regulates the solvency and financial soundness of a small number of insurers incorporated or formed under Ontario legislation.

 

Insurance Companies in Ontario 2008-2017, as at March 31

Insurance companies in Ontario 2008-2017, as at March 31 

Description of Insurance companies in Ontario image [New Window]

 

 

Direct Written Insurance Premiums in Ontario, 2007-2016

Direct written insurance premiums in Ontario, 2007-2016 

Description of Direct written insurance premiums in Ontario image [New Window]

 

 

Insurers Incorporated or Formed Under Ontario Law 2008-2017, as at March 31

Insurers incorporated or formed under Ontario law 2008-2017, as at March 31 

Description of Insurers incorporated or formed under Ontario law image [New Window]

 

 

Insurers Incorporated or Formed Under Ontario Law Direct Written Insurance Premiums 2007-2016

Insurers incorporated or formed under Ontario law direct written insurance premiums 2007-2016 

Description of Insurance companies incorporated or formed under Ontario law direct written insurance premiums image [New Window]

 

 

Life and Health Insurance: Expanding Proactive Supervision

 

FSCO oversees about 44,000 agents who sell life and health insurance products and services, supervising their conduct and how they treat consumers.

 

“We take a holistic approach to life and health insurance agent supervision. Compliance with the law matters – it’s FSCO’s key line of defence to protect the rights of consumers.”

 

Izabel Scovino, Director, Market Regulation Branch

 

Over the last few years, FSCO has made a concerted effort to expand its approach to proactive supervision in the insurance sector. Since releasing the results of a survey of life insurance agents that identified issues related to how they determined which life insurance products were suitable for their clients, FSCO has conducted 414 agent examinations, including 200 in fiscal 2016-17. It also initiated examinations of life insurance companies to assess how they meet their oversight obligations for the agents representing them. 

 

Insurance Complaints 2012-2013 to 2016-17

Insurance Complaints 2012-2013 to 2016-17 

Description of Insurance complaints image [New Window]

 

 

Strengthening Oversight of Life Insurance Agents

 

This year, FSCO focused on strengthening its ability to monitor life and accident and sickness insurance agent compliance. This work addressed issues identified in the 2014 report of the Office of the Auditor General of Ontario. 

 

In December 2016, FSCO introduced a new requirement for agents to provide the names of every insurance company they represent each time they renew their licence or update their Errors & Omissions (E&O) information. Life insurance companies can access this information, giving them another tool to meet their obligations to monitor agents acting on their behalf.

 

Agents can now provide the required updates through FSCO’s Licensing Link online portal, and insurers can download information from the portal about individual agents conducting business on their behalf. These changes have placed more onus on insurance companies to effectively monitor the agents selling their products.

 

 

Insurance Agent Errors & Omissions Compliance Rates 2015-2017, as at March 31

Insurance agent Errors & Omissions compliance rates 2015-2017, as at March 31

Description of Insurance agent errors and omissions compliance rates image [New Window]

 

 

Licensing Activity2016-172015-16
Individuals   
New Licences Issued   
   Life Insurance Agents5,8526,444
   General Insurance Agents1,5441,221
   Accident and Sickness Insurance Agents575569
   Insurance Adjusters197138
Licences Renewed   
   Life Insurance Agents20,56814,688
   General Insurance Agents3,0892,904
   Accident and Sickness Insurance Agents351341
   Insurance Adjusters1,3991,468
Corporations   
New Licences Issued   
   Life and General Insurance Agencies724497
   Corporate Insurance Adjusters92
   Insurance Companies63
Licences Renewed   
   Life and General Insurance Agencies2,5741,992
   Corporate Insurance Adjusters104115

 

 

 

Enforcement Actions2016-172015-16
Insurance Agents   
   Licence Refusals1217
   Licences Revoked816
   Licences Suspended48
   Letters of Caution31
   Letters of Warning1818
   Compliance Order42
Administrative Monetary Penalties (AMP)   
   Total AMP Orders Issued1554
   Total AMP Amount Ordered$47,872$68,467
Corporate Insurance Agencies   
Administrative Monetary Penalties   
   Total AMP Orders Issued31
   Total AMP Amount Ordered$7,967$2,250
Automobile Insurance Companies   
   Letters of Warning4
Administrative Monetary Penalties   
   Total AMP Orders Issued91
   Total AMP Amount Ordered$260,000$19,000
Other Insurance Companies   
Administrative Monetary Penalties   
   Total AMP Orders Issued3
   Total AMP Amount Ordered$23,354

 

 

 

ENABLING FARM MUTUALS TO SUPPORT RURAL COMMUNITIES

 

Ontario is home to a unique mutual insurance system known as “farm mutuals” – community-based property and casualty insurers owned by their policyholders that generally offer their services in rural areas of the province.

 

The province’s 41 farm mutuals operate as a system. They participate in the Fire Mutuals Guarantee Fund, which offers 100 per cent protection to farm mutual policy holders for unearned premiums and claims should any farm mutual become insolvent. The fund bears the cost of any farm mutual insolvency, and as such monitors the financial position of each member to help prevent insolvencies. Farm mutuals also share a common reinsurance company, known as the Farm Mutual Re, which meets all their reinsurance needs.

 

FSCO works closely with the three pillars of the farm mutual system in Ontario – the farm mutual industry association (Ontario Mutual Insurance Association, or OMIA), Farm Mutual Re, and the trustees of the Guarantee Fund – to ensure the health of their industry and the integrity of the farm mutual system. This allows consumers in the rural communities where these companies operate to continue to have reliable access to the insurance products they need.

 

In 2016, FSCO was a member of an advisory committee responsible for reviewing the agreements that form the basis of the farm mutual system in Ontario, with a view to ensuring the agreements continue to support a sustainable farm mutual system.

 

 

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