IBAO pushes for administrative monetary penalties in Ontario

The Insurance Brokers Association of Ontario (IBAO) is urging the Financial Services Commission of Ontario (FSCO) to include administrative monetary penalties (AMPs) in the Insurance Act.
Currently, FSCO can issue a cease and desist order, often in conjunction with an undertaking or refer the matter to be prosecuted in the quasi-criminal stream, to address breaches of conduct in the Ontario marketplace.
These remedial tools are either considered to be a slap on the wrist (cease and desist orders) or so extreme as to be harsh, uncompromising and expensive (prosecution in the quasi-criminal court).
In the spring budget, Ontario’s Minister of Finance suggested the addition of AMPs to the Insurance Act should be considered and FSCO subsequently identified this consideration in its June 2011 Statement of Priorities.
“AMPs will allow the regulator to impose monetary fines that reflect the seriousness of the statutory breaches, sending a very strong monetary message to the specific party and the industry,” IBAO said in its submission.
“Where they have been applied to the insurance sector, AMPs have enhanced the regulator’s ability to deal with these issues. In addition, they have enhanced the credibility of the regulator in the eyes of the industry and public and strengthened the collaborative and co-operative interaction with the industry which, of course, promotes the consumer’s interest.”