Ontario Insurance Sector and Administrative Monetary Penalties

 
Bulletin
No. [G-02/13]
 
General
 
To the attention of all insurance companies licensed to transact insurance in Ontario

​​With this Bulletin, the Financial Services Commission of Ontario (FSCO) is announcing recent changes made by the government to insurance related statutes that provide FSCO with new powers to levy Administrative Monetary Penalties for contraventions of legislation or regulations that occur on or after January 1, 2013. 

 
An Administrative Monetary Penalty (AMP) is a financial penalty imposed by a regulator such as FSCO, instead of a court, for contraventions of law.  AMPs encourage regulatory compliance and prevent financial benefit from violations.
 
The introduction of AMPs is in keeping with the Ontario government’s commitment to modernize financial regulation and regulatory practices.  This enforcement tool provides FSCO with more flexibility in assessing appropriate responses to non-compliance and misconduct in the insurance sector.  AMPs also give FSCO an authority similar to other financial services regulators across Canada. 
 
The changes allow FSCO to apply AMPs for existing contraventions that are identified in the AMP regulation.  They do not create new compliance requirements.
 

New Statutory Provisions and Regulations

 
The following statutes and regulations contain the provisions regarding AMPs:
 
  • Insurance Act, Ontario Regulation 408/12
  • Compulsory Automobile Insurance Act, Ontario Regulation 409/12
  • Automobile Insurance Rate Stabilization Act, 2003, Ontario Regulation 410/12
New Part XVIII.1 of the Insurance Act outlines the procedures for imposing an AMP as well as hearing and appeal processes.
 

Application of AMPs

 
The contraventions to which an AMP can apply include listed unfair or deceptive acts or practices by any person or entity including insurers, agents, brokers, adjusters and those involved in the provision of goods and services to insurance claimants. 
 
AMPs can be imposed for breaches of orders, undertakings and licence conditions, as well as for contraventions of statutory provisions such as:

  • Failure of agent to meet annual continuing education requirements
  • Failure of agent to notify Superintendent of address change
  • False billing practices
  • Failure of insurer to charge authorized rates
  • Engaging in prohibited acts and/or practices
  • Acting as an agent when unlicensed or suspended
  • Other unfair or deceptive acts/practices
 
Go to www.e-laws.gov.on.ca [New Window] for copies of these statutory provisions and regulations.
 
 
Philip Howell
Chief Executive Officer and
Superintendent of Financial Services
 
February 19, 2013