CAILBA Compliance Update

FSRA has published their Fiscal Year Statement of Priorities for 2025-2026 with only two priorities for the life insurance sector - https://www.fsrao.ca/media/26281/download

7.1 Strengthen Managing General Agents (“MGA”) regulatory framework

• FSRA continues to identify consumer risks and gaps in market conduct compliance, particularly in independent distribution channels, such as MGAs.
• In response, FSRA is strengthening the regulatory framework to address potential consumer risks and challenges posed by the MGA distribution channel and continuing proactive and risk-informed supervision under its Life Agent Supervisory Framework

Outcomes sought:

• Clarify the obligations of insurers, MGAs and sales agents in product sales/service
• Ensure consumers are treated fairly and sold products that suit their needs based on advice provided by an adequately trained/monitored life agent
• Issue the final Life Insurance Agent and MGA Licensing Suitability Guidance and implement a supervisory framework

7.2 Strengthen protection of consumers who invest in segregated fund contracts

• FSRA continues to enhance regulatory standards for segregated fund contracts. These standards will help ensure agents give customers suitable advice and the information they need to understand the contracts in which they invest, including what they pay to invest.

Outcomes sought:

• Customers with segregated fund contracts have the information they need to make suitable choices about their investments.
• Consumers receive advice that is suitable based on their needs and circumstances from agents who are appropriately trained and monitored.
• Harmonize, to the extent possible, with other Canadian jurisdictions to ensure insurers and agents put customers’ interests first and manage conflicts of interest appropriately when they design, sell and administer segregated fund contracts.