Ontario has reintroduced plans to license life and health managing general agents with revised rules designed to address industry objections that halted the initial proposal.
The province’s Finance Ministry published a consultation paper this month outlining changes to the Insurance Act. These amendments seek to resolve issues that led the Financial Services Regulatory Authority of Ontario (FSRA) to pause work on the licensing framework in February, following industry pushback.
Critics had called FSRA’s original proposal too sweeping. The October 2024 draft would have required licensing for advisors and other entities not typically classified as MGAs. Industry groups argued the regulator’s authority was constrained by the existing law, which was updated in 2024 to facilitate MGA licensing.
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Who would need a license under the new rules
The latest proposal limits which entities fall under the licensing regime. It applies only to those that distribute life or accident and sickness insurance as intermediaries between insurers and authorized agents while also supervising agents or screening new ones.
The changes also restrict which contracts trigger licensing requirements. Only agreements where MGAs act as intermediaries between insurers and agents, or where they engage, supervise, or monitor agents—either directly or through another entity—would be included. The paper clarifies these must be contracts MGAs hold directly with insurers, not with other intermediaries.
Insurers remain exempt since they already hold licenses. The same applies to MGAs handling only group insurance. The proposal removes references to sub-MGAs from the Act, shifting consumer protection duties to insurers or MGAs that contract with them. Existing sub-MGA licenses would stay valid under their current terms.
The regulator had originally set a June 1, 2026 launch date for the framework, followed by a two-year transition period. FSRA said the rules were necessary 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.
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Consumer protection without extra licensing
The ministry’s paper also suggests ways to strengthen consumer protection without expanding licensing. It proposes amending the Insurance Act to allow FSRA to set standards for certain activities, even if those activities don’t require a license. The aim is to reduce unnecessary duplication in licensing requirements and mitigate the risk of potential unintended consequences.
Ontario’s efforts to update its approach to MGAs began after the 2024 Insurance Act update. The current proposal attempts to narrow the scope of the entities that would be captured by the licensing regime while ensuring consumers will be protected.
The ministry is accepting feedback on the paper until August 17. It also seeks input on whether further changes could reduce regulatory burdens under the new framework.
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