FSCO releases Final Life Insurance Product Suitability Report

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The Financial Services Commission of Ontario (FSCO) released its findings from a study it conducted with 1300 randomly selected life insurance agents licensed in Ontario.  The study was primarily an information gathering exercise where selected agents were required to complete a questionnaire on the practices they employ to determine if a product or recommendation is suitable for clients.  While the results were positive in many respects, some shortcomings in sales practices were noted.  IFB has communicated with members reminding them of the importance of compliance with regulatory requirements, and in particular, providing clients with written conflict of interest disclosure.  IFB members will find more information in the Member section of the IFB website: www.ifbc.ca.

Next steps: In its September e-newsletter, FSCO said –

The Superintendent of Financial Services requires all agents comply with the law at all times.  Following industry guidelines and conducting activities in accordance with industry best practices are ways to ensure that you are following the law. FSCO will:
  • Publish a series of educational bulletins on requirements necessary to comply with the law
  • Conduct follow-up life insurance agent questionnaires
  • Conduct more on-site compliance reviews with life insurance agents to assess their compliance with the law
  • Conduct more on-site compliance reviews with life insurance companies to assess if they are meeting their obligations under section 12 of O. Reg. 347/04.

To read the full report, click here.

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