What happened: FSRA found widespread compliance failures among Ontario life agents and gaps in insurer oversight of MGA distribution channels
Who’s involved: FSRA and eight Ontario life and health insurers representing roughly 65% of the provincial market
What’s at stake: Agent suitability standards across Ontario’s dominant life insurance distribution channel, and a stalled MGA licensing framework
Why it matters: Insurers delegating agent oversight to MGAs may be exposed to compliance and conduct risk they are not actively monitoring
Where it stands: Phase 1 findings released; FSRA expanding the review to six more insurers and planning a separate probe of recruitment practices
Two-thirds of Ontario life insurance agents examined by the province’s regulator failed to properly complete basic suitability assessments for their clients.
That number comes from a new observations report by the Financial Services Regulatory Authority of Ontario, which reviewed insurer-MGA relationships across eight life and health insurers covering roughly 65% of Ontario’s market by direct written premiums. The findings land at a sensitive moment: Ontario’s proposed MGA licensing framework has been stalled since February, and the province is still consulting on changes to its Insurance Act to get the initiative back on track.
FSRA examined 50 life agents across 10 MGAs and analysed 47 client files. The results were not close. Sixty-six percent of agents failed to complete needs and suitability assessments. Seventy-four percent failed to provide policy illustrations. Fifty-three percent did not provide complete adviser disclosures.
All eight participating insurers delegated at least some responsibilities for recruiting, screening, training, or monitoring agents to MGAs. Only four had documented policies and procedures for supervising those activities across all their contracted MGAs. Proactive agent reviews conducted directly by insurers covered between 0% and 4% of their active agent populations.
Zero percent. That was the floor.
Every participating insurer engaged at least one MGA operating under a multi-level marketing model - a structure built on recruiting new agents and incentivising existing agents to recruit others. FSRA noted that in some cases, a sizable portion of an insurer’s business was generated through an MGA using this model.
The regulator has flagged tiered-recruitment MGAs before. Previous FSRA reviews found rapid agent growth, large inflows of recruits, and heavy incentives to expand downlines - with agents responsible for supervising the very people they recruited. This report confirms those concerns have not gone away.
Ontario had targeted June 1, 2026, to launch its MGA licensing regime. That plan was paused in February after industry feedback warned that the proposed rule’s definition of “MGA” was too broad, potentially catching individual advisers and small practices that are not distribution-level intermediaries. The province’s Finance Ministry released a consultation paper in July proposing Insurance Act amendments to narrow the scope and get the framework moving again.
FSRA’s new findings will feed directly into that process. The regulator has also expanded its questionnaire to six additional insurers and plans a separate review of recruitment practices.
One more thing on the agenda: orphaned life policies - cases where the original agent is gone and no one has picked up the file. FSRA plans to assess whether those policyholders are getting adequate service, flagging risks such as policy lapses, outdated beneficiary information, and reduced claims readiness.
For insurers relying on MGAs to handle agent screening, training, and monitoring, the message is straightforward: delegation does not mean abdication, and FSRA is watching the gap between what insurer-MGA agreements promise and what actually happens on the ground.
The allegations and observations in this report are drawn from FSRA’s supervisory review and self-reported insurer data. The questionnaire responses were not independently verified by FSRA. The report represents Phase 1 of an ongoing initiative, and FSRA has indicated further supervisory activity is planned.
