Regulation - LGIC

Service Provider Licensing - Proposed Amendments Regarding Administrative Monetary Penalties

Regulation Number(s):
Ontario Regulation 34/10 (Statutory Accident Benefits Schedule – Effective September 1, 2010)
Ontario Regulation 349/13 (Service Providers – Principal Representatives)
Ontario Regulation 90/14 (Service Providers – Standards for Business Systems and Practices)
Ontario Regulation 408/12 (Administrative Penalties)
Instrument Type:
Regulation - LGIC
Bill or Act:
Insurance Act
Summary of Decision:
The proposed amendments have been approved.
Further Information:
Proposal Number:
Posting Date:
September 30, 2014
Summary of Proposal:
Administrative Monetary Penalties are a progressive regulatory tool that can be used with other tools to provide greater control in ensuring compliance. The intention of AMPs is to ensure that the penalty is appropriate/ proportionate to the infraction in a way that promotes compliance, and prevents an entity from receiving any economic gain from non-compliance. AMPs provide a cost-effective means of addressing contraventions as opposed to pursuing prosecutions.

The proposed AMPs will address violations of the Act and regulations, where identified by regulation, by insurers, licensed Service Providers and Principal Representatives.

The proposed AMP model is consistent with the model implemented in the insurance sector as well as the mortgage brokering sector, and is composed of both a fixed regime (for low-level, high-volume contraventions) and a variable regime (for other requirements in the regulations). Factors such as the potential harm that can be caused to the public and the potential benefit received by committing the violation were considered in determining the AMPs.

Fixed AMPs will be applied to instances of non-compliance related to FSCO reporting requirements, as they are deemed to be low in severity. The Superintendent?s AMP order can be appealed to the Financial Services Tribunal (FST).

The amount of variable AMPs are proposed by the Superintendent, and will be determined having regards to prescribed criteria. The recommended variable AMP regime is expected to allow for a flexible framework to deal with significant contraventions of the regulations that can involve or potentially lead to improper billing practices. The service provider has the opportunity for a hearing before the FST on the proposed AMP.
Contact Address:
Senior Manager
Insurance Policy Unit
Financial Institutions Policy Branch
Ministry of Finance
95 Grosvenor Street
Frost Building North, 4th Floor
Toronto, ON
M7A 1Z1
Effective Date:
December 1, 2014