Ontario Seeks to Revise Insurance Regulations

Ontario’s Finance Ministry has released a consultation paper on proposed amendments to the Insurance Act, aiming to get the province’s planned licensing framework for life and health managing general agents (MGAs) back on track. The framework has been stalled since February, when the Financial Services Regulatory Authority of Ontario (FSRA) announced it was pausing work on the proposal, following industry pushback on the rule’s latest iteration.

The ministry’s changes aim to address industry concerns about the scope of the province’s proposed life and health MGA licensing framework, initially released by FSRA in January 2025 and then amended in October. The October proposal provoked a negative industry reaction as it was seen as overly broad, complex and duplicative, and would have required advisors and other entities not traditionally considered MGAs to acquire a licence.

They have released a consultation paper outlining proposed amendments to Section 407.2 of the Act. The changes would narrow the scope of the entities that would be captured by the licensing regime while ensuring consumers will be protected. It also aims to reduce unnecessary duplication in licensing requirements, and mitigate the risk of potential unintended consequences.

The paper includes proposed changes to both the types of contractual agreements and the regulated activities captured under the framework. The proposal, released July 3, says the ministry intends to narrow the application of the licensing requirements to entities commonly considered MGAs, which means they “facilitate the distribution of life or accident and sickness (A&S) insurance as intermediaries between … insurers and authorized agents” and supervise or monitor agents activities, or screen agents and prospective agents.

The Insurance Act would be changed to specify that contracts that fall under the framework are those that life & health MGAs hold directly with insurers, and involve the MGA acting as an intermediary between the insurer and agents authorized by the insurer. Contracts that are meant to facilitate the distribution of life or A&S insurance by engaging, supervising, monitoring or screening agents (or by retaining another person or entity to do so) are also within the framework.

References to sub-MGAs would also be removed from the Act, with responsibility for consumer protection to fall on insurers or MGAs contracting with them. Sub-MGAs with existing licences wouldn’t need to continue to meet any terms they’re already subject to.

In addition, to ensure consumer protection, the ministry proposes to amend the Insurance Act to identify activities over which FSRA may set out standards, while not triggering licensing requirements. The licensing framework was originally proposed to close a gap in oversight over life and health MGAs, a key and growing insurance intermediary, and the insurance agents that contract with them.

The Ministry of Finance is accepting comments on the paper until Aug. 17. It’s also seeking feedback on additional amendments that may further reduce the regulatory burden under the new framework. The regulator had previously been working toward a June 1, 2026 launch date for the framework, followed by a two-year transition period.

The consultation paper is a significant step towards addressing the industry’s concerns and finding a solution that works for all parties involved.

With the deadline for comments approaching, it remains to be seen how the proposed amendments will be received and what further changes may be made to the licensing framework.