The Financial Services Commission of Ontario (FSCO) is planning to conduct on-site reviews to make sure that life insurance agents are complying with the provincial Insurance Act and its regulations. FSCO says it wants to make certain that advisors are conducting proper needs assessments and recommending suitable products.
On May 22, FSCO announced that, due to the findings of its recent product suitability study, it is going to conduct on-site reviews. The regulator has three primary areas of focus, namely to verify licensing requirements (including the completion of continuing education credits), to see if agents are carrying valid errors and omissions insurance, and to ensure that point-of-sale statutory disclosure requirements and best practice recommendations are being followed. Advisors will be chosen from a random and targeted sample, and they will be given advance notice.
"Once a life insurance agent is selected, the agent will be contacted by FSCO staff to arrange a date and time for the on-site review. FSCO expects that the on-site reviews will generally take one full day in duration. A letter will be issued to the agent summarizing the purpose of the on-site review, and will include a list of information that the agent should have available," says FSCO. "Upon conclusion of the on-site review, FSCO will discuss the findings and recommendations with the insurance agent. A closing letter summarizing the findings will also be issued to the insurance agent, with the possibility of a response to the recommendations being required within a specified period of time."