Does Canada really need multiple guidelines for fair treatment of customers?

Ontario’s new financial services regulator plans to issue a revised guideline on fair treatment of customers over the next few months to help counter confusion over which guidelines to follow.

Last year, the former provincial regulator, Financial Services Commission of Ontario (FSCO), released guidance on fair treatment of customers around the same time that guidance on the topic was issued by the Canadian Council of Insurance Regulators (CCIR)/Canadian Insurance Services Regulatory Organizations (CISRO). British Columbia’s Ministry of Finance also came up with guidelines.

“So, there’s been confusion about which one should we be following,” Mark White, CEO of the new Ontario regulator, the Financial Services Regulatory Authority (FSRA), said at a recent meeting, referring to the FSCO and CCIR guidelines. “The official stance when we inherited this from FSCO was you can either comply with either.”

White discussed the issue at the Insurance Institute of Ontario’s At the Forefront event in Toronto on Oct. 1. Having two separate guidelines created confusion for insurers, he observed at the Institute event.

“For organizations that are only provincial, how do they make sure they are… following the FSCO lead guide – which is multi-sectoral – in a way that is [not] going to put them offside with the CCIR?” White asked, providing an example of the possible confusion. “We need to get around [to] harmonizing.”

This harmonization is expected to be done “this calendar year and certainly this fiscal year,” White said at the time.

“I think they’ve recognized that disharmonization is a valid concern,” said Koker Christensen, a partner at Fasken Martineau DuMoulin LLP and a member of FSRA’s recently announced stakeholder advisory committee for P&C insurance. “The disharmonization of provincial regulatory regimes is a theme; that’s something that is a consistent source of concern for insurers.”

The concern for industry is that they have to comply with two different sets of guidelines that are addressing the same issue, Christensen said. “There is obviously a lot of overlap and similarities between the guidelines, but they are not the same,” he said Tuesday.

For example, both guidelines cover conflict of interest and protection of private information, while the CCIR document delves into relationships between insurers and intermediaries. For its part, the FSCO guidelines were Ontario-specific and applied to all of its regulated sectors, not just insurance.

Having to comply with both CCIR and FSCO guidelines “creates a certain amount of confusion, complexity and work to try to figure out what you have to do to comply with both of them,” Christensen said. “And it also begs the question of, ‘Well, why do we have these two different guidelines?’

“The reality is it’s not workable to have different [guidelines] in different provinces,” he added. That said, Christensen said he is optimistic FSRA will resolve the issue so that it works for industry and meets consumer protection objectives.