The Financial Services Regulatory Authority of Ontario launches new consumer education campaign
TORONTO, Dec. 6, 2023 /CNW/ - The Financial Services Regulatory Authority of Ontario (FSRA) is launching a targeted consumer education campaign to help protect vulnerable consumers and their families when purchasing life and health insurance. The campaign will educate and empower consumers to ask the right questions, understand the products they are being offered, and make informed decisions.
The campaign comes after an extensive first-of-its-kind review of the life and health sector by FSRA that uncovered troubling practices that were harming vulnerable consumers. Some managing general agencies (MGAs) and their agents were using inappropriate training materials and selling complex products that did not meet their customers' needs.
"Consumers deserve better. The regulatory breaches and lapses in best practices among agents associated with these MGAs is unacceptable," said Huston Loke, Executive Vice President, Market Conduct. "We will continue to scrutinize this sector, including insurance companies where necessary, take enforcement actions and educate consumers to help ensure they receive policies and products that are right for them and their families."
The consumer education campaign provides consumers with information they need to know, such as:
Make sure your insurance agent meets these requirements before entrusting them with your business:
- The agent holds an insurance agent licence to sell life insurance in Ontario.
- The agent discloses to you in writing the names of providers of insurance products, services, and insurers that they represent.
- The agent discloses to you in writing any conflicts of interest they may have.
The agent should explain what life insurance is, how it works, and what is the best option for you and your family and why. The agent should also:
- Conduct a comprehensive insurance needs analysis.
- Describe the risks associated with a product that includes an investment component and explain the ongoing costs or implications.
- Help you complete and submit your application and answer any questions you may have.
"Life insurance is meant to protect individuals, families and businesses, and these products should meet the consumer's individual needs and match their financial circumstances," said Loke.
"It's important that individuals and families know about the potential risks of purchasing complex insurance policies and understand that they are not obligated to buy if they don't feel any of the products are right for them."
- Recent FSRA research finds vulnerable consumers were 16 per cent more likely to experience an issue in the life and health sector than non-vulnerable consumers (This includes new immigrants, older persons, students and those with low financial literacy).
- More than 8 million Ontarians have life insurance policies.
- Ontarians pay more than $9 billion in individual life insurance premiums.
- The average Ontario household holds more than $500,000 in life insurance coverage.
- The 12,775 life agents contracted with the subject MGAs at time of examination represented approximately 20 per cent of the life agents licensed in Ontario.
Consumers who believe their insurance agent has violated the Insurance Act may file a complaint following the steps outlined on FSRA's website. Examples of reportable actions include not disclosing conflicts of interest or providing false or misleading information about a product.
FSRA continues to work on behalf of all stakeholders, including consumers, to ensure financial safety, fairness, and choice for everyone. Learn more at www.fsrao.ca.
FOR MEDIA INQUIRIES:
Russ Courtney
Sr. Manager, Media Relations
Financial Services Regulatory Authority
C: 437-225-8551
Email: [email protected]
SOURCE Financial Services Regulatory Authority of Ontario
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