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Insurance salespeople have been completing hundreds of transactions without an active licence due to insurers’ lax internal controls, the Financial Services Regulatory Authority of Ontario (FSRA) said in a release Monday.

Some insurers have self-reported these cases to the regulator and took corrective action. The unlicensed activity in these cases was all performed by previously licensed agents, FSRA said in an email.

The cases could have been prevented if insurers had proper controls in internal systems, processes or administration, it said.

While the regulator did not provide the exact number of incidents, it said the call for insurers to strengthen internal controls was based on anecdotal evidence that this was occurring.

Unlicensed agents can lead to invalid policies, policy cancellations and misrepresentation, leading to higher insurance costs, FSRA said in a release. “There is a real risk of consumer harm if insurance agents disregard the law and forget or knowingly fail to renew their licence in time.”

Insurers should ensure their internal controls are robust enough to detect and prevent unlicensed activity and report any unlicensed activity to FSRA by email, the regulator said. It uses these reports to monitor the trend and inform future regulatory decisions to protect consumers.

Agents also have the responsibility to ensure their licence is valid. All agents receive an email advising them to renew their license 60 days before it expires, FSRA said in an email.