Ontario's insurance regulator has set out how every incorporated insurer's board should oversee the business and stressed that accountability cannot be delegated.
The Financial Services Regulatory Authority of Ontario put its Corporate Governance Guidance into effect on June 8, 2026. The document, numbered PC0051INT, applies to Ontario-incorporated insurance companies and reciprocal insurance exchanges licensed by FSRA, which the guidance groups together as "Insurers." FSRA will review it no later than June 8, 2031.
The guidance reads as an interpretation of existing law rather than a fresh rulebook. It sets out how FSRA reads the corporate governance requirements in the Insurance Act, the Corporate Governance Regulation (O. Reg. 123/08), the Reciprocal Insurance Exchanges Regulation (O. Reg. 637/00), and the Corporations Act. Where the text says "must," "shall," or "requires," FSRA is pointing to a legislative requirement. Where it says "should," "may," or "can," it is describing common industry practices that an insurer would be wise to demonstrate.
At its core sits a line boards cannot miss: a board may delegate responsibility for specific functions, but it cannot delegate accountability. FSRA's view is that the board should direct and oversee the insurer, including senior management, and set its strategic direction. Six principles spell out what that looks like - defined roles and responsibilities, board independence and composition, effective oversight structures, integrity in reporting and disclosure, corporate culture, and subsidiary governance.
Independence gets concrete. No more than two-thirds of an incorporated insurer's directors can be affiliated with it, a quorum must include at least one unaffiliated director, and both the audit and conduct review committees need at least three members with a majority unaffiliated. Officers and employees are barred from sitting on either committee, and incorporated insurers must have at least six board members.
On risk, FSRA expects the familiar three lines of defence: operational management owns the risk, risk management reviews and challenges it, and internal audit provides independent assurance. Boards are also expected to support an effective whistleblowing policy that is publicly disclosed.
The supervisory weight come from how FSRA grades the work. The regulator will assess governance through its Risk Based Supervisory Framework, known as the RBSF-I, and the outcome can feed an insurer's Overall Risk Rating. FSRA has signaled it will weigh board performance more heavily than board characteristics, and it can take enforcement action where insurers fall short of the underlying statutes and regulations.
The full text of the guidance is available at https://www.fsrao.ca/media/26386/download.
