FSCO announces plans to regulate wholesale insurance brokers

The Financial Services Commission of Ontario (FSCO) says it intends to “draft recommendations for the licensing of wholesale brokers and re-insurance intermediaries to enhance consumer protection as one of its priorities for 2007.
The Ontario insurance regulators list of 2007 priorities is posted on FSCOs Web site.
Among them, the regulator has included a proposal to license the provinces wholesale brokers a segment of the market that is currently not covered under the licensing regime of the Registered Insurance Brokers of Ontario (RIBO).
Other issues the the regulator proposes to tackle in 2007 include implementation of ‘Prudent Portfolio’ rules.
The ministry has been involved in a technical consultation with Ontario-incorporated insurers, reciprocals and fraternal societies on proposed changes to insurance legislation that would allow these insurers to operate under investment and corporate governance rules similar to those at the federal level.
The proposed prudent portfolio approach would give Ontario’s farm mutual insurance companies and other provincially incorporated insurers greater flexibility in making investment decisions, as well as introduce strong corporate governance requirements, the ministry noted in its consultation paper on the subject. This consultation is a key step towards improving the competitiveness of companies that serve Ontario’s rural and agricultural communities.
FSCO also plans to make recommendations that would update Regulation 283/95, Disputes Between Insurers. It says the recommendations would ensure that claimants are appropriately protected and have access to statutory accident benefits when two or more insurers are disputing which one has the responsibility to pay.
Various aspects of the province’s auto insurance industry have made FSCOs 2007 priority list, including a five-year review of the auto insurance system, a review of proposals to maintain stability in Factilities Association, and the ongoing implementation of the elctronic injury claims database known as HCAI.
Also, FSCO said it would be conducting research to determine the feasibility of developing additional Pre-Approved Framework (PAF) Guidelines for the treatment of automobile accident injuries under the Statutory Accident Benefits Schedule (SABS). According to FSCO, the aim would be to improve utilization of health care services and provide certainty around cost and payment for insurers and health care providers.