Ontario to consider administrative monetary penalties for breaches of Insurance Act

The Ontario government is proposing to review of the Ontario Insurance Act, including the possibility of introducing administrative monetary penalties.
The government made the review known in its 2011 budget. This would be the first review of these major parts of the legislation since 1962.
The budget document notes “regulatory effectiveness will be enhanced by considering additional enforcement tools for the regulator, such as administrative monetary penalties.”
The Ontario Insurance Act currently does not allow the regulator to deal with breaches of the act by way of imposing monetary penalties, meaning the regulator must go through a quasi-criminal process of charging a company in order to respond to a breach in the act.
Industry executives and analysts have been calling on the government to consider the inclusion of administrative monetary penalties in Ontario’s regulatory statute for at least the past two years. They argue monetary penalties would allow the regulator to respond in a much more timely and appropriate way to a breach.
They “are a tool or a mechanism that gives regulators the power to assess and penalize a breach with a monetary fine,” Vivian Bercovici, a partner at Heenan Blaikie, said at the National Insurance Conference of Canada (NICC) in 2009. “The idea is that the fine is going to be commensurate with the seriousness of the breach.”
Insurance company CEOs once again called for the government to look into a system of administrative monetary penalties during a CEO panel discussion at the Insurance Brokers Association of Ontario’s 90th Annual Convention held in Niagara Falls in 2010.