June 11, 2019 by Greg Meckbach
Ontario’s new property and casualty insurance regulator is up and running.
Effective June 8, the Financial Services Regulatory Authority of Ontario (FSRA) took over regulatory duties from both the Financial Services Commission of Ontario (FSCO) and the Deposit Insurance Corporation of Ontario (DICO).
Insurers are hoping FSRA will take a more flexible approach than FSCO when approving auto rate changes, an Insurance Bureau of Canada official told Canadian Underwriter earlier.
Legislation bringing in FSRA was tabled three years ago by Charles Sousa, then the Liberal finance minister. The move was applauded by IBC because some insurance executives felt that FSRA would adapt to changing consumer needs and industry trends.
The Liberals were voted out of power a year ago and replaced as ruling party by the Progressive Conservatives. New finance minister Vic Fedeli has promised the PCs will review with FSRA how auto rates are regulated.
FSRA is led by chief executive officer Mark E. White, a former senior vice president and head of enterprise risk for the Bank of Montreal.
Stock trading regulation is still the responsibility of the Ontario Securities Commission but pretty much every other financial service in Ontario now comes under FSRA.
In addition to P&C insurance, FSRA will also regulate service providers who invoice auto insurers for statutory accident benefit claims. Furthermore, FSRA now regulates pensions, mortgage brokering, credit unions, caisses populaires and loan and trust corporations.
Among FSRA’s mandates are deterring deceptive and fraudulent conduct.
The creation of FSRA was one of 37 recommendations made in the Review of the Mandates of the Financial Services Commission of Ontario (FSCO), Financial Services Tribunal (FST) and the Deposit Insurance Corporation of Ontario (DICO), a report released in 2015 by a panel of three. That panel included: George Cooke, former CEO of The Dominion of Canada General Insurance Company; Lawrence Ritchie, a partner at Osler, Hoskin & Harcourt LLP and James Daw, a former Toronto Star personal finance columnist.
In its report, the panel said it had heard that FSCO does not have a flexible regulatory approach and that FSCO lacks the appropriate resources, governance structure and accountability to effectively fulfill its current mandates.
One of its recommendations, which the government implemented, was to make FSRA self-funding. FSRA is also overseen by an expert, independent board.
The chairman of the board is Bryan P. Davies, who chaired the Canada Deposit Insurance Corporation from 2006 until 2016 and previously served as deputy treasurer of Ontario.
Board members include: Brigid Murphy, former CEO of Travelers Canada and of The Dominion of Canada General Insurance Company; Richard Nesbitt, former CEO of the Global Risk Institute; Lawrence Ritchie, an Osler, Hoskin and Harcourt lawyer specializing in securities enforcement; Judith Robinson, who used to sit on the Ontario Securities Commission; and Kathy Bouey, a former Ontario deputy minister.