Insurance Bureau of Canada is calling on Ottawa to redesign Canada's financial regulatory framework, arguing that regulators have become too narrowly focused on stability at the expense of growth and innovation.
The argument, laid out in an op-ed by IBC's Liam McGuinty and James Geuzebroek, leans heavily on the C.D. Howe Institute's newly released "Walking the Tightrope: Canada's Financial Regulatory Scorecard, Year Three," authored by fellow-in-residence Gherardo Caracciolo.
The report found 92% of regulatory initiatives assessed target stability, transparency, market conduct and consumer protection, against 17% aimed at efficiency, competition and innovation.
Caracciolo's report also concludes that periods of sustained regulatory tightening tend to be followed by weaker economic performance, while noting that "the costs of regulation are clearly visible, while the benefits are much harder to detect," a limitation the report itself acknowledges rather than resolves.
This op-ed isn't IBC's first time making this argument, and tracing its history shows almost exactly how long the campaign has run. Insurance Business first reported IBC's $753 million/81% P&C compliance cost figure in late October 2025, tied at the time to C.D. Howe's "Pruning the Rulebook, Year Two" scorecard.
IBC repeated the same figure in a November 2025 commentary and on its standing regulation advocacy page, then again in Insurance Business's coverage of the same theme that same month, which added that insurers faced 38 active or upcoming regulatory consultations in 2025 alone, with IBC submitting 48 responses.
This latest op-ed, published alongside C.D. Howe's "Year Three" scorecard nearly a full year later, still cites the identical 2024 figure. IBC has run a closely related argument specifically for auto insurance too, supporting a separate C.D. Howe report last August that found insurers in strictly rate-regulated provinces adjust premiums roughly 2% less in response to rising claims than those in more flexible jurisdictions.
That pattern doesn't make IBC's figure inaccurate, but it does mean this op-ed is best read as the latest instalment in a sustained, roughly year-long campaign built around one data point rather than a fresh reaction to new evidence.
The op-ed's four recommendations are: embedding competition and innovation directly into financial regulators' mandates alongside stability; examining whether Canada's regulatory structure should be more integrated, citing the UK's model of housing prudential regulation within the Bank of England; requiring standardized cost-benefit analysis before new regulations are introduced, similar to the UK's Prudential Regulation Authority; and modernizing the Insurance Companies Act to harmonize requirements across Canada's reportedly 44 financial sector regulators.
The comparison IBC and C.D. Howe draw between Canadian P&C insurers spending roughly 17% of operating costs on compliance versus roughly 6.5% for European insurers is a striking figure, but neither the op-ed nor the underlying report quantifies what that spending actually buys in terms of prevented consumer harm, solvency protection or market stability, the same "benefits are harder to detect" problem the C.D. Howe report itself flags.
That cuts both ways: it's equally difficult to prove current regulation is excessive as it is to prove it's justified, which is exactly the gap IBC's own recommendation for mandatory cost-benefit analysis is designed to close going forward.
For P&C insurers and brokers, this op-ed signals that IBC intends to keep pressing this argument as a sustained policy priority, and the specific recommendations, particularly Insurance Companies Act harmonization and mandatory cost-benefit analysis, are concrete enough that they could shape actual legislative proposals if they gain traction in Ottawa.
Brokers should treat this as an evolving policy conversation rather than a settled direction, since neither the federal government nor provincial regulators like FSRA have publicly committed to restructuring mandates along the lines IBC proposes.
