The ability for the Financial Services Commission of Ontario (FSCO) to impose administrative monetary penalties (AMPs) in the province’s insurance sector went into force New Years Day, a long-considered move that has been applauded by some within the industry.
In the 2012 Ontario Budget, the government announced that it would implement AMPs in the insurance sector as a way for FSCO to promote compliance and address violations of its regulations.
Background: IBC, IBAO applaud fraud measures in Ontario budget; province proposes to establish administrative monetary penalties
Changes to the Insurance Act, Automobile Insurance Rate Stabilization Act (2003) and the Compulsory Automobile Insurance Act have allowed for FSCO to implement penalties against infractions of those acts, as well as “breaches of orders, undertakings and licence conditions” beginning Jan. 1.
According to FSCO, AMPs can apply in situations of its listed Unfair or Deceptive Acts or Practices “by any person or entity including insurers, agents, brokers, adjusters and those involved in the provision of goods or services to insurance claimants.”
The Insurance Brokers Association of Ontario (IBAO) has been pushing for AMPs for several years, and has said they are a critical way to fight fraud in the province’s auto insurance sector.
“This represents one of the most significant advances in consumer protection in many years,” Randy Carroll, IBAO’s CEO noted in a statement. “I want to personally thank Minister Duncan and his staff for keeping his promise and getting this done.”
FSCO says it has successfully used AMPs in the regulation of the mortgage brokering and credit union sectors. The commission will provide more information in the “near future” on how the AMPs will be enforced in the insurance industry, according to its website.