		Advanced Search
		Home \| Sitemap \| Forms \| Online Services \| Français \| Contact

Insurance Pensions Hearings & Decisions Licensing & Registration Who We Regulate About FSCO Publications

Monitoring and Enforcement Online - Glossary of Terms

ADVISORY BOARD HEARINGS:

An Advisory Board established under the Insurance Act assists in determining the granting or refusal of a new licence or the possible revocation or suspension of an existing licence for insurance agents and adjusters. The Superintendent of Financial Services will appoint an Advisory Board constituted under the Insurance Act, when an applicant or licensee responds to a Notice of Proposed Hearing with a written request for a hearing.

The Advisory Board consists of:

• The Chair (a representative of the Superintendent)
• A representative of insurers
• A representative of agents or adjusters

The Board holds hearings to determine the granting or refusal of a new licence or the possible revocation or suspension of an existing licence for insurance agents and adjusters.

The Rules of Practice and Procedure for Hearings Before an Advisory Board and the Statutory Powers Procedure Act apply to a hearing before an Advisory Board.

The Advisory Board hears evidence and submissions on the law, and then prepares a written report including recommendations, on the application or licensing status of an agent or adjuster for the Superintendent. The Superintendent will consider the report and then makes a decision by issuing an order.

APPLICATIONS DENIED:

Persons who apply for a licence or registration issued by the Superintendent may have their application denied if they do not meet the qualifications or requirements set out in legislation and regulations.

CEASE & DESIST ORDERS:

The Superintendent may under certain statutes issue, or propose to issue, a cease and desist order directed towards persons engaging in conduct that is in contravention of a statute.

CHARGES LAID IN ONTARIO COURT OF JUSTICE:

Offences under the various statutes administered by FSCO proceed by way of charges before the Ontario Court of Justice under the Provincial Offences Act. Charges are laid when the defendant is served with sworn information setting out the charge(s).

CONDITIONAL LICENCES (OR REGISTRATIONS):

The Superintendent may issue licenses or registrations with terms and conditions in certain circumstances.

CONTINUING EDUCATION AUDITS:

Life insurance agents are required to complete 30 hours of Continuing Education (CE) credits within each two year licensing period. CE credits cannot be carried over from one licensing period to another. Life insurance agents attest to the completion of CE when renewing their licence. FSCO conducts random audits of agents to ensure CE compliance.

CO-OPERATIVE CORPORATIONS:

The Financial Services Commission of Ontario (FSCO) regulates registration of organizations who conduct business as a co-operative under the Co-operative Corporations Act. There are many types of co-operatives. Usually members have a common interest/goal (e.g., housing co-operative, agriculture). Co-operatives differ from other public companies in that each of their members has one vote only, despite the number of shares they hold.

CREDIT UNIONS & CAISSES POPULAIRES:

The Financial Services Commission of Ontario (FSCO) regulates registration of credit unions and caisses populaires under the Credit Unions and Caisses Populaires Act, 1994. Credit unions/Caisses Populaires are community based financial institutions and most offer a full range of services. All are owned and controlled by members who are also shareholders. Credit unions are regulated provincially and insured by a stabilization fund, deposit insurance or guarantee corporation.

CRIMINAL RECORD CHECKS:

FSCO performs police checks on the background of paralegals/SABS representatives and existing/prospective insurance agents with the Canadian Police Information Centre.

COMPLAINT REVIEWS:

FSCO reviews complaints and reports of: insurance agent, adjuster, or company; paralegal; and health care provider misconduct and non-compliance with insurance law.

CONVICTIONS:

Persons found guilty of an offence, either as a result of a guilty plea or after a trial, have registered against them a conviction under the Provincial Offences Act.

DISPUTE RESOLUTION SERVICES (DRS):

The Financial Services Commission of Ontario (FSCO) provides Dispute Resolution Services (DRS) to help claimants and insurance companies (the parties) resolve disputes about automobile accident benefits. These services include mediation, neutral evaluation, arbitration, appeals and variation/revocation. FSCO mediators and adjudicators are neutral and provide services under the authority of the Insurance Act.

ERRORS & OMMISSIONS INSURANCE AUDITS:

Life insurance agents are required by law to have errors and omissions (E&O) insurance with limits of at least $1 million to cover a single occurrence, and at least $2 million in the aggregate. It must also include extended coverage for loss resulting from fraudulent acts. FSCO conducts random audits of agents to ensure E&O compliance.

FINANCIAL SERVICES TRIBUNAL (FST):

The Financial Services Tribunal is an independent, adjudicative body composed of nine to 15 members, including the Chair and two Vice-Chairs. The Tribunal has exclusive jurisdiction to exercise the powers conferred under the Financial Services Commission of Ontario Act, 1997 and other Acts that confer powers on or assign duties to the Tribunal. It also has exclusive jurisdiction to determine all questions of fact or law that arise in any proceeding before it. As well, the Tribunal has authority to make rules for the practice and procedure to be observed in a proceeding before it and to order a party to a proceeding before it to pay the costs of another party or the Tribunal's costs of the proceeding.

FINES:

Upon conviction under the Provincial Offences Act, a person may be fined an amount as determined by the Court within the maximum limits set out in the relevant statute under which the person was prosecuted.

HEARINGS BEFORE THE SUPERINTENDENT:

In several of the statues administered by the Financial Services Commission of Ontario, certain matters may require a hearing before the Superintendent of Financial Services. Such a hearing can occur only in specific limited circumstances which are set out in the relevant statute.

While the majority of hearings for regulatory action taken by the Superintendent are before the Financial Services Tribunal, there are provisions within the Credit Unions and Caisses Populaires Act and the Loan and Trust Corporations Act which provide for the possibility of a hearing before the Superintendent or his or her delegate.

As an example, the Superintendent may hold a hearing under section 101 of the Credit Unions and Caisses Populaires Act to consider the fitness of a credit union director to hold office. In addition, section 65 of the Loan and Trust Corporations Act provides for a hearing before the Superintendent if the Superintendent proposes to refuse consent to the transfer of voting shares in certain circumstances.

INSURANCE AGENTS:

The Financial Services Commission of Ontario (FSCO) issues licenses authorizing persons to conduct business as insurance agents. There are three classes of agent licenses.

Life Insurance (Including Accident & Sickness)
Accident & Sickness
General

Agents listed may hold a combination of the insurance licenses listed above. An insurance licence is issued by FSCO for a two-year term.

INSURANCE COMPANIES:

The Financial Services Commission of Ontario (FSCO) is responsible for licensing insurance companies in Ontario.FSCO does not provide ratings of insurance companies or recommendations.

JUDICIAL REVIEWS:

Judicial reviews are applications heard by a panel of judges of the Superior Court of Justice in which decisions made by administrative tribunals are subject to judicial scrutiny. Judicial reviews are not appeals and may be brought by a party to a decision even though there is no statutory right of appeal.

LETTERS OF CAUTION:

In some instances, the Superintendent may determine that issuing a letter of caution to a person alleged to have engaged in some form of minor misconduct will address the misconduct without the necessity of issuing a formal proceeding.

LOAN & TRUST CORPORATIONS:

The Financial Services Commission of Ontario (FSCO) regulates the registration of organizations to conduct business as a loan company or a trust company.

MORTGAGE BROKERS:

The Financial Services Commission of Ontario (FSCO) regulates registration of individuals and organizations who conduct business as mortgage brokers under the Mortgage Brokerages, Lenders and Administrators Act. In addition, FSCO conducts inspections and investigates complaints regarding the activities of mortgage brokers.

MINUTES OF SETTLEMENT:

Minutes of Settlement is an agreement in writing in which a proceeding before FSCO is resolved without a hearing.

ONSITE COMPLIANCE EXAMS:

FSCO conducts on-site examinations of automobile insurance companies to ensure compliance with Cease and Desist orders and undertaking. These examinations assist in verifying that the requirements of an undertaking or order are appropriately implemented.

PARALEGALS:

The new regulatory scheme set out in the Law Society's By-Law 4 permits paralegals to practice in what are already permitted areas of practice. Subsection 6 (2) authorizes licensed paralegals to represent someone:

In Small Claims Court
In the Ontario Court of Justice under the Provincial Offences Act
On summary conviction offences where the maximum penalty does not exceed six months' imprisonment
Before administrative tribunals, including the Financial Services Commission of Ontario

A person with a paralegal licence can do the following in the course of representing a client in any of the above-mentioned proceedings:

Give legal advice concerning legal interests, rights or responsibilities with respect to a proceeding or the subject matter of a proceeding
Draft or assist with drafting documents for use in a proceeding
Negotiate on behalf of a person who is a party to a proceeding

FSCO continues to monitor paralegals for compliance with the Insurance Act and its regulations up to May 1, 2008 . Effective May 1, 2008, independent paralegals who provide legal services in Ontario will be regulated by the Law Society of Upper Canada.

PENSIONS:

Every employer who establishes an employment pension plan that is subject to the Pension Benefits Act must submit the pension plan to the Financial Services Commission (FSCO) for registration. FSCO ensures that employment pension plans comply with the standards set out in the Act and regulations. The Act establishes minimum standards for administering and funding pension plans and benefits which are subject to the Act.

PROSECUTIONS:

Persons contravening a statute or regulation enforced by the Superintendent may be guilty of an offence and subject to prosecution before the Ontario Court of Justice under the provisions of the Provincial Offences Act.

REGULATORY ACTIONS AND RELATED HEARINGS:

Under the Insurance Act, if the Superintendent intends to make an Order, a notice must first be given to those who may be affected and an opportunity for a hearing must be provided. Where there is a request for a hearing, the Financial Services Tribunal (FST) will hear the matter and decide whether or not the proposed Order should be made. Where there is no request for a hearing, the Superintendent may make the Order set out in the notice.

Where the Superintendent is of the opinion that the interests of the public may be prejudiced or adversely affected by any delay in the issuance of a permanent order, the Superintendent, without prior notice, may make an interim or temporary order which shall take effect immediately on its making, and which shall become permanent on the 15th day after its making unless within that time the person requests a hearing before the FST.

REVOCATIONS:

Licenses or registrations issued by the Superintendent may be revoked as a result of misconduct on the part of the person holding the licence or registration.

SURRENDERS:

Persons licensed or registered by the Financial Services Commission of Ontario (FSCO) may in certain circumstances surrender or give up their licence or registration. This is often done by way of minutes of settlement.

SUSPENSIONS:

Licenses or registrations issued by the Superintendent may be suspended for a set period of time as a result of misconduct on the part of the person holding the licence or registration.

UNFAIR OR DECEPTIVE ACTS OR PRACTICES:

"Unfair or deceptive acts or practices" are defined in the Insurance Act Ontario Regulation 7/00.