In the recent Investment Executive article covering FSRA’s proposals for enhanced accountability in the insurance industry, several insightful points were made. However, comments attributed to lawyer Harold Geller regarding orphan policyholders warrant serious clarification — not only because they risk misinforming the public and the industry, but because they undermine the urgent reality of what thousands of abandoned clients currently face.
The issue of orphan clients — policyholders left without active servicing due to advisor departures, retirement or disinterest — is not hypothetical. It’s a widespread, systemic failure that has persisted for decades. These individuals often remain unaware of their contractual rights, the policy’s ongoing suitability or even how to contact someone for support.
They are policyholders, not “non-clients.” Their premiums are still being paid; their benefits still exist; the promises made to them are still in force. And they deserve to be served.
Geller states: “An insurance agent doesn’t have a duty to a non-client.”
Let’s be clear: orphan clients are not “non-clients.” They are contract-holding consumers with enforceable rights — and they have the same legal and ethical expectation of service continuity as any actively managed policyholder. The industry does not get to turn a blind eye to them simply because their originating advisor is no longer available.
Geller also asserts: “How are they going to be compensated?” This is a fair question — but it’s being asked in the wrong spirit. The deeper issue isn’t whether compensation exists, but why the industry continues to tie client service obligations exclusively to initial commissions.
Ethical practice demands that service not be optional, and that remuneration mechanisms evolve accordingly. Compensation must follow the client, not just the sale.
And most concerning, Geller says: “I think this will fail in practice, and it’s because the compensation doesn’t flow with the obligation.” This defeatist perspective assumes that industry innovation and regulatory accountability are impossible. But the reality is, change is already under way. Tools, technologies and new partnership models are emerging that help advisors and MGAs re-engage with orphan policyholders, provide compliant reviews and generate new revenue while restoring consumer trust.
Let’s not forget: the Canadian Council of Insurance Regulators’ guidance on the fair treatment of customers clearly places the onus for lifetime service on the insurer and its intermediaries. The Financial Services Regulatory Authority of Ontario’s new rules echo this principle — recognizing that consumer expectations, ethical conduct and public trust demand no less.
A call to action
We have a once-in-a-generation opportunity to reshape how the life insurance industry serves its clients — all of its clients. Let’s not dismiss that opportunity with outdated assumptions or self-limiting beliefs. It’s time to build continuity models that are consumer-centric, financially viable and ethically sound. Orphan clients are not liabilities. They are the heart of the promise we made.
Rhona Konnelly is the founder of Konnelly Consulting. She is a veteran of Canada’s life insurance industry and an advocate for ethical in-force policyholder servicing and consumer protection.