FSRA finds insurer filings comply with amended rule

TORONTO, June 24, 2024 /CNW/ - Ontario life insurance customers can be confident that they can invest in new individual segregated fund contracts and access their money later with no surprise sales charge fees.

Ontario's financial services regulator (FSRA) performed an industry compliance check to ensure life insurance companies are following FSRA's 2023 Unfair or Deceptive Acts or Practices (UDAP) Rule amendment, which prohibits insurers from issuing new segregated fund contracts that contain a deferred sales charge (DSC) option.

FSRA found that the industry is largely in compliance with the new requirement. The findings are based on FSRA's review of 54 information filings received from 14 insurers in 2023.

"Consumers shouldn't have to pay to withdraw their own money, and that's why we banned deferred sales charges," said FSRA's Huston Loke, Executive Vice-President, Market Conduct. "I am pleased to report that, based on the filed information, insurers are complying with the ban on deferred sales charges in new segregated fund contracts." 

A DSC is a fee that a customer pays if the customer withdraws money from an individual segregated fund contract before the end of a specified time period. Removing the DSC option from new segregated fund contracts supports fair financial outcomes for Ontario consumers.

• Compliance Report on the Cessation of Deferred Sales Charges
• FSRA's Unfair or Deceptive Acts or Practices Rule

FSRA continues to work on behalf of all stakeholders, including consumers, to ensure financial safety, fairness, and choice for everyone. Learn more at www.fsrao.ca.

Russ Courtney
Sr. Manager of Media Relations
Financial Services Regulatory Authority
C: 437-225-8551
Email: russ.courtney@fsrao.ca

SOURCE Financial Services Regulatory Authority of Ontario