(January 18 – 17:40 ET) – Dina Palozzi, CEO of the Financial Services Commission of Ontario and Superintendent of Financial Services, has written to all life insurance agents in Ontario, updating them on the regulatory situation in the province.

Palozzi reminds agents of her 1998 discussion paper on Regulation of Insurance Distribution and Coordination of Financial Services Regulation in Ontario. The paper proposed principles of supervision, accountability, capital requirements and intermediary proficiency as fundamental to the establishment of a regulatory system that would provide for consumer protection.

Palozzi says that FSCO received many insightful and thoughtful comments on the paper, and that it continues to support and work towards these principles. A consultation document outlining the work that has been done will be released early this year.

As a result of this consultation, Palozzi says FSCO was prepared to represent the insurance side to the Ontario Securities Commission when it came out with rules proposed by the Mutual Fund Dealers Association last June. She says FSCO worked with the other bodies represented in the Canadian Council of Insurance Regulators, along with the the OSC and the Canadian Securities Administrators to discuss these issues.

“As a result of all of these activities, the proposals for the MFDA rules were substantially modified and are currently under further study. FSCO will continue to be helpful and assist in this process so that the issues of concern to dually licensed intermediaries will be understood,” she writes, “As the MFDA rules reflect the principles in the IDR paper, we have been involved in the discussions to ensure that the application of those principles appropriately reflects the business structures and realities of life insurance intermediaries.”

Palozzi says that the effectiveness of FSCO in modifying the MFDA speaks well for its role in the proposed merger of FSCO and the OSC. “An integrated financial services regulator will be well positioned to deal with issues related to intermediaries who are dually licensed.”
-IE Staff