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The Financial Services Regulatory Authority of Ontario ("FSRA") released the Property & Casualty Insurance Market Conduct Supervision Strategic Plan ("SSP") in June 2025, introducing a more structured and proactive approach to supervising entity-specific and sector-wide conduct in Ontario's property and casualty ("P&C") insurance market.
The purpose of the SSP is to identify, assess, and address market conduct risks to which Ontario consumers are exposed and which materially impact consumers throughout the P&C sector. Its scope applies broadly across the market, addressing both entity-specific risks, and those posed by the sector at large. The new plan will affect all parties within the market, including P&C insurers, independent adjusters, insurance corporate agencies, insurance agents, and corporate adjusting companies (the "Regulated Entities").
The SSP is built on four supervisory pillars aimed to serve as the means through which FSRA may achieve its statutory objects and obligations:
- Principles-based regulation
- Risk-informed supervision
- Fit-for-purpose programs
- Engagement and transparency
To achieve its objectives, the SSP will be implemented in phases, with progressing informational demands, as FSRA balances regulatory burdens and costs with achieving robust oversight and practical implementation.
Pillar 1: Principles-Based Regulation
The principles-based regulation pillar provides that FSRA is to focus on achieving outcomes, rather than enforcing prescriptive rules. This is consistent with FSRA's view since its launch, including the rules that it has published using its rule-making authority, which are intended to be risk-based. These outcomes are focused on the material risks of P&C sector activities that may pose a threat to policyholders, rather than serve as a checklist for FSRA and market participants. Regulated Entities should expect supervision to be continuous, dynamic, and timely, with developments in the P&C insurance sector being identified early and reflected in the actions taken by FSRA.
Pillar 2: Risk-Informed Supervision
Under the risk-informed supervision pillar, FSRA will "identify, assess, monitor and, if necessary, act on risks posed to consumers" by Regulated Entities and the entire P&C sector.
The SSP aims to reduce the risks that Regulated Entities might overlook consumer needs and interests during the course of business. FSRA risk assessment of Regulated Entities is grounded on the "identification and assessment of the policies, procedures, risk management, and internal controls that are employed to ensure consumers are treated fairly... throughout the product life cycle and the interactions they have with consumers." Risk assessment is to establish the priorities for FSRA supervision, and to enable FSRA to provide additional oversight to help address any potential issues posed by a Regulated Entity.
Entity-specific risk assessment of P&C Insurers are to be undertaken on a multi-year, phased basis. In phase one, FSRA will rely on available information, and later weigh the regulatory burden and costs associated with additional steps to achieve "both robust oversight and practical implementation." After the SSP becomes fully operational, FSRA may conduct further assessment at its discretion based on selection criteria including direct written premiums, size, complexity, types of products offered, and target consumer demographics.
For sector-wide risks, FSRA conducts regulatory oversight of P&C insurers, independent adjusters, corporate insurance agencies, insurance agents, and corporate adjusting companies. Sector wide risk assessment evaluates the entirety of the P&C insurance sector for risks that could impact consumers. Based on FSRA assessment of sector-wide risks, parties identified as implicated in those risks may either be monitored, or incorporated into FSRA supervision activities.
Pillar 3: Fit-for-Purpose Programs
The fit-for-purpose pillar operates to ensure that supervisory responses are properly tailored to the nature and severity of the identified risk. FSRA may initiate inquiries, conduct examinations, launch thematic reviews, or issue surveys to address identified risks. Regardless of the supervisory activity required, any supervisory actions are to be: undertaken using sound judgement, evidence-based, in an efficient and effective manner, utilizing the work of others (e.g. work from external audits, internal audit, appointed actuary, insurer's other oversight functions and other regulators), exercising proportionality, and in a comprehensive manner. Importantly, FSRA may prioritize addressing any unforeseen issues or concerns which arise during FSRA supervision and require immediate attention.
Pillar 4: Engagement and Transparency
Under the engagement and transparency pillar, FSRA will publish supervision plans and outcomes on its website. Regulated Entities will be engaged and informed in key areas of supervision. Engagement and transparency is intended to foster collaboration between FSRA and regulated and industry stakeholders, and ensure that market participants properly understand FSRA expectations.
Conclusion
In response to the developments set forth in the SSP, Regulated Entities should begin reviewing their internal policies, procedures, and risk management frameworks to ensure that they are aligned with FSRA's principles-based, results-oriented, and risk-informed approach. Regulated Entities should ensure that consumer interests are embedded in their business decisions, and that internal mechanisms are in place detect and mitigate risks prior to FSRA oversight.
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