The Financial Services Regulatory Authority of Ontario (FSRA) has stopped work — at least for now — on its proposed rule and licensing regime for managing general agents (MGAs) in the province’s life and health sector, the regulator announced on Monday.
FSRA “is pausing work” to finalize the proposed rule and implement an MGA licensing regime, it said in a release. “The Government of Ontario will communicate next steps regarding the proposed MGA licensing framework in due course.”
FSRA referred a request to the office of Ontario’s finance minister. The office did not immediately respond to a request for comment.
The proposed rule had been targeted for June 1, with a proposed 24-month transition period.
FSRA’s pause likely won’t come as a surprise to many in the industry. The broad definition of MGAs in the regulator’s second consultation, which ended Nov. 19, hadn’t been apparent in the original proposal from January. The updated proposal took the industry by surprise; specifically, thousands of life and health insurance advisors who practise in Ontario may have needed to be licensed as MGAs.
The regulator previously told Investment Executive that it received 300 comments during the consultation. Those comments haven’t been posted yet.
The proposal was originally developed after regulatory reviews found instances of poor training and supervision of life agents, as well as clients being sold universal life insurance policies they didn’t need.