Ontario’s government pledged new oversight for the life insurance sector, hinted at the creation of a new beneficial ownership registry, and called for a review of the offering memorandum (OM) exemption in its fall economic statement today.
In its mini-budget, the government proposed the creation of a new licensing regime for the insurance industry that will aim to enhance consumer protection, and “clarify the roles and responsibilities of insurers, distributors and agents.”
The announcement was quickly endorsed by industry trade group, the Canadian Life and Health Insurance Association (CLHIA).
In a statement, CLIHIA president and CEO Stephen Frank said, “Licensing of independent intermediaries, such as managing general agents (MGAs), will benefit Ontarians by clarifying accountabilities which will help to promote fair outcomes for consumers. This is why our industry strongly supports this initiative by the Ontario government.”
He said enhancing the consistency of oversight of intermediaries is a critical first step towards modernizing the existing legislative framework and strengthening consumer protection in Ontario.
The provincial government also reiterated its commitment to “fostering greater competition and driving more innovative and cost‐effective capital markets” in Ontario.
“The government continues to support the Ontario Securities Commission’s (OSC) work to improve capital formation, promote innovation and ensure investor protection,” it said, highlighting the OSC’s work to beef up dispute resolution and introduce binding authority for the Ombudsman for Banking Services and Investments (OBSI), among other recent policy initiatives.
Looking ahead, the government said:
- it is asking the OSC to review its OM exemption “to provide further capital formation opportunities”
- it supports the work of the OSC and the Canadian Investment Regulatory Organization (CIRO) on strengthening the rules around short selling; and
- it is proposing to “enable the Canadian Public Accountability Board (CPAB) to implement new disclosure rules to strengthen transparency and accountability of CPAB inspections of audit firms.”
Additionally, the government said that it’s considering the creation of a beneficial ownership registry for private companies that would help law enforcement and other regulators combat money laundering and other financial crimes
It pledged legislative amendments to provide the Financial Services Regulatory Authority of Ontario (FSRA) with “enhanced investigative and resolution tools to support effective oversight of credit unions.”