January 26, 2017
Life Insurance Agent e-Newsletter
Effective December 1, 2016, the Financial Services Commission of Ontario (FSCO) introduced a new requirement for you to report in Licensing Link, the names of all the Ontario-licensed life insurance companies you represent, have contracts with and/or on whose behalf you sell insurance products. You are required, at a minimum, to report this information when renewing your licence and when updating your E&O insurance information. Please note: if you are a sponsored agent, then as a convenience, you will have your sponsoring insurer pre-populated in Licensing Link.
Life insurers can now go into Licensing Link to check and download a list of all the individual agents conducting business on their behalf. Insurers can also access information about their agents’ E&O insurance, such as the policy number and expiry date, and may be notified if their agents are not meeting the E&O requirements.
Please also note that if your E&O insurance coverage has expired, or is not updated in Licensing Link, the following comment will appear in red on your public profile on FSCO’s public registry: “FSCO does not have current E&O information for this agent.”
For more information about updating your E&O insurance information on Licensing Link, see:
FSCO’s goals with this new requirement are to ensure agents maintain their E&O insurance, as legally required, and to make it easier for insurers to fulfill their agent oversight obligations. See Bulletin L & H-02/16 for further details.
All life insurance agents must comply with the licensing and E&O requirements of the Insurance Act and Regulations even if they are conducting life insurance business in a minimal capacity, on a part-time basis or have not conducted any business for a long period of time.
Agents who no longer wish to conduct insurance business are required to complete the Application for the Surrender of an Insurance Agent or Corporate/Partnership Licence, which is available on FSCO's website. Until the Superintendent has approved the surrender, the agent must continue to comply with all requirements of the Insurance Act and its Regulations, including maintaining continuous E&O insurance.
Life insurance agent examinations
FSCO continues to conduct life insurance examinations to assess agents’ compliance with the Insurance Act and Regulations, and industry best practices. During the past year, FSCO examined more than 200 life insurance agents. The findings from the review are included in the Life Insurance Agents 2015/16 Compliance Report. The report also sets out FSCO’s expectations of licensed agents.
FSCO encourages agents to read the report, benchmark themselves against the findings, and then take the necessary steps to address any gaps. FSCO will continue to conduct life insurance agent examinations over the next year and will take enforcement action where there is evidence of non-compliance.
If you are selected for an examination, FSCO staff will contact you by telephone and/or email to make the request and appropriate arrangements. FSCO has legal authority under section 442 of the Insurance Act to examine the records of insurance agents at any time. Failure to respond to FSCO’s request for an examination is a contravention of the Insurance Act and you may be subject to regulatory action.
The examination should preferably take place where clients’ files are being held, or at a Managing General Agent’s Office, or another feasible location.
Life Licence Qualification Program (LLQP) update
The harmonized LLQP, implemented as of January 1, 2016, had a seamless transition period. Ontario and five other jurisdictions offered the compensatory examination option during the transition period, which ended November 7, 2016. Examinations are now marked on a modular basis.
FSCO takes consumer protection seriously. Since March 2016, FSCO has issued 17 administrative monetary penalties (AMPs) to insurance agents. The infractions included: soliciting business without a licence; failure to have valid E&O insurance; failure to complete the continuing education requirement; committing unfair and deceptive acts and practices; and failure to provide information to the Superintendent upon request about activities related to the business of insurance. The average AMP was more than $2,000.
During this time period, FSCO also suspended the licences of three life insurance agents, ordered the revocation of the licences of six agents and denied nine applications for licences.
To view all public enforcement notices, refer to FSCO's Enforcement Activities – Insurance Sector web page.
Sanctions issued by other regulators
FSCO has signed information-sharing agreements with the Investment Industry Regulatory Organization of Canada (IIROC), Mutual Fund Dealers Association of Canada (MFDA) and Real Estate Council of Ontario (RECO). Under the agreements, the regulators will share the decisions and sanctions of their respective disciplinary processes and work more closely during the investigative stage. These arrangements will provide more effective and coordinated regulation, and strengthen consumer protection in Ontario.
FSCO also monitors disciplinary decisions or actions taken by other insurance and financial services regulators. Agents who are being investigated by another regulator should disclose this information to FSCO when renewing their licence. FSCO actively monitors disciplinary actions taken by other regulators or jurisdictions as part of determining the suitability of new applicants and existing licencees. Disciplinary decisions taken by other regulators will trigger a review by FSCO of the sanctioned individual's activities, including consideration of the individual’s suitability to hold a licence in Ontario. This review may result in an investigation or other appropriate disciplinary action by FSCO.
FSCO will continue to pursue additional partnerships with other regulators.