The Financial Services Regulatory Authority of Ontario published a notice flagging a rise in insurance transactions completed by agents without an active licence and setting expectations for insurers to detect, prevent and remediate unlicensed activity. FSRA reported seeing cases in which agents completed hundreds of transactions while unlicensed, with some insurers self-reporting and taking corrective action. It linked the issue to insufficient controls in firms’ systems, processes or administration and highlighted potential consumer harm, including invalid policies, cancellations, misrepresentation and damage to insurance histories that can increase costs. Insurers are encouraged to proactively assess and regularly monitor internal controls, and to report any identified unlicensed activity to FSRA while taking immediate corrective action to protect affected clients. Reports will be used to monitor the trend and inform future regulatory decisions. For life and health insurers, FSRA distinguished between control-related unlicensed activity (to be reported via the contact-centre channel) and other unlicensed life-agent activity (to be reported through the Life Agent Misconduct Report).
Financial Services Regulatory Authority of Ontario 2025-04-14
Financial Services Regulatory Authority of Ontario urges insurers to tighten controls and report unlicensed insurance agent activity
The Financial Services Regulatory Authority of Ontario issued a notice about rising insurance transactions by unlicensed agents, urging insurers to detect, prevent, and remediate such activities. The notice attributes the issue to inadequate controls within firms, posing risks like invalid policies and increased costs for consumers. Insurers are advised to enhance internal controls, report unlicensed activities, and take immediate corrective actions.