The Insurance Bureau of Canada (IBC) has backed the call from an expert advisory panel for a new organization to be formed that will take the duties currently performed by the Financial Services Commission of Ontario (FSCO).
In a report released on Monday, the panel recommended that the Liberal government in the province establish the new organization. The new group would be an independent regulatory agency that would replace the FSCO, which currently regulates auto insurance rates in Ontario.
“A new Financial Services Regulatory Authority (FSRA) should be established, and it should exercise both prudential and market conduct functions in a coordinated but distinct fashion,” an Ontario government-appointed panel said in the Review of the Mandates of the Financial Services Commission of Ontario, Financial Services Tribunal, and the Deposit Insurance Corporation of Ontario.
The IBC said that it agreed with the recommendation and urged the government to move quickly to implement the changes. The bureau advised that the FSRA should be developed before this fall’s economic statement.
“Given the rapid pace of change in the financial world, we believe the new regulator needs to be nimble and foster a strong, vibrant and innovative financial services sector,” said Kim Donaldson, IBC’s vice president for Ontario.
“The regulator must be an effective model for excellence for financial sector regulation in Ontario, with a mission to protect and promote a broad range of consumer interests in a manner that is proactively responsive to changing consumer needs, as well as adaptive to new and sometimes disruptive future technology.”
The expert panel also recommended that the FSRA should have an anti-fraud authority, to help with the problem of insurance fraud in Ontario.
“We do not intend to imply that FSRA should be the only responsible entity for fraud prevention, deterrence and detection,” the panel added. “Each regulated sector and the businesses operating within them must also participate actively in fighting fraud. FSRA ought to have the authorities necessary to require and enable the sectors to do their part.