Ontario’s insurance regulator is facing pushback from industry groups over a new proposal that could reshape how managing general agents (MGAs) and advisory firms operate in the province. Advocis and the Conference for Advanced Life Underwriting (CALU) have formally submitted concerns about the Financial Services Regulatory Authority of Ontario’s (FSRA) proposed Life and Health Insurance Managing General Agents (MGA) Rule, warning that the framework could unintentionally increase costs, create regulatory overlap, and restrict consumer access to advice.
FSRA’s draft rule, the first of its kind in Ontario, aims to establish a more consistent and transparent oversight model for MGAs by introducing defined licensing categories, conduct standards, and supervisory expectations. The regulator has said the proposal is intended to close gaps in the current system, enhance consumer protection, and ensure that all entities performing MGA-like functions are subject to a clear set of obligations.
But Advocis and CALU argue that the proposal, as written, casts the net too widely. In a statement earlier this week, Advocis said the rule could impose “significant new costs” and administrative burdens on advisors, particularly small advisory businesses that do not operate as traditional MGAs but may still fall under the expanded definition.
The submission warns that sole practioners, partnerships and small incorporated firms, already licensed and overseen under existing insurance distribution regulation, could be swept into the new regime. These businesses could face unnecessary licensing fees, renewal requirements, and tiered compliance obligations that offer “minimal incremental benefit” to consumers while increasing overhead for advisors, the groups warned.
Additionally, the groups said the proposal is not aligned with MGA regulations in Saskatchewan and New Brunswick, creating inconsistent obligations for firms operating across provincial lines. Advocis and CALU also highlighted that the rule was released with only a 30-day comment period, limiting opportunities for meaningful feedback from affected insurance professionals.
Advocis and CALU are urging FSRA to revise the proposal to include a proportionate definition of MGAs that reflects real-world insurance business operations, simplify requirements to eliminate duplication, ensure adequate consultation timelines, and coordinate with other provinces to avoid regulatory inconsistencies.
Kelly Gorman, president and CEO of Advocis, said the submission focuses on safeguarding advisors who help Canadians make informed insurance and financial decisions. She emphasized that regulatory changes should enhance consumer protection without limiting access to advice.
