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The Financial Services Regulatory Authority of Ontario ("FSRA") announced that it has paused work to finalize a proposed rule and licensing regime for Life and Health Managing General Agents ("L&H MGAs"), which had been targeted for completion by June 1, 2026.
The Ontario Legislature previously amended the Insurance Act (Ontario), and FSRA issued a consultation paper aimed at establishing a comprehensive regulatory framework for L&H MGAs in Ontario (see our 2024 article A Comprehensive Look at the Proposed Regulatory Framework for Life and Health Managing General Agents in Ontario). The amendments supported the proposed framework (the "Framework")on Life Insurance Agent and MGA Licensing Suitability released by FSRA in late 2023. The Framework would have introduced a licensing regime for L&H MGAs, affecting the regulation and oversight of MGAs in Ontario, and was expected to come into force on June 1, 2026.
FSRA has characterized this decision to pause as an opportunity to allow for further consideration of the feedback received from industry stakeholders and to align with the intended policy objectives, and not as a retreat from the regulation of L&H MGAs as managing general agents. We expect an L&H MGA licensing framework to be implemented in Ontario. Further engagement by FSRA with industry participants and stakeholders is expected to continue.
Regulation of managing general agents is evolving in Canada. The provinces of Saskatchewan (in 2020) and New Brunswick (in 2023) have established regimes to regulate and license managing general agents as managing general agents, in other provinces and territories of Canada the application of licensing and supervision regimes are not consistent, and will depend on business models. Ontario's decision highlights the national landscape: most of Canada continues to be in a period of regulatory evolution with respect to managing general agents. We will follow closely further steps taken by FSRA, developments in other provinces, and how industry feedback may be reflected in the future decisions.
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