On July 3, 2026, the Ontario Ministry of Finance (“MOF”) published a consultation paper (click here) proposing further amendments to the Insurance Act (Ontario) (the “Act”) relating to the licensing framework for life and accident and sickness insurance managing general agents (“L&H MGAs”).
The proposed amendments are intended to narrow the scope of the licensing framework so that it applies principally to entities traditionally understood in the industry to operate as L&H MGAs, while maintaining regulatory oversight of insurance distribution and agent supervision to protect consumers.
Background
2024 Amendments to the Ontario Insurance Act
In November 2024, Ontario amended the Act to establish a separate licensing framework for L&H MGAs. As discussed in our previous article on the new L&H MGA licensing requirements (click here), the amendments proposed the addition of section 407.2 to the Act which provided an entity would be acting as an L&H MGA where, pursuant to an agreement, it facilitates the sale of life or accident and sickness insurance by engaging in any of the enumerated activities.
Those activities include recruiting agents or prospective agents, screening agents or prospective agents, training agents or prospective agents, supervising or monitoring agents; entering into agreements with agents; recommending agents to insurers; and transmitting applications or policies between insurers and agents.
Proposed Rule 2025-001 and Stakeholder Consultation
In January 2025, the Financial Services Regulatory Authority of Ontario (“FSRA”) published Proposed Rule 2025-001 – Life and Health Insurance Managing General Agents (“Rule 2025-001″) to implement the L&H MGA licensing framework. Following two rounds of consultation and significant industry feedback regarding the broad scope and application, in February 2026 FSRA paused work on the Rule 2025-001 (click here) which had been targeted to come into effect on June 1, 2026.
As we noted in an earlier update (click here), stakeholders expressed concern that the statutory definition could capture corporate insurance agencies, advisors and other entities not traditionally considered L&H MGAs, resulting in overlapping licensing and compliance obligations.
Proposed Changes
In response to stakeholder feedback, the MOF is now proposing to amend section 407.2 of the Act to narrow the scope and application of L&H MGA licensing requirements. The proposed changes fall under two broad categories.
- Narrowing the types of contractual agreements captured for licensing.
The proposed amendments would narrow the types of contractual agreements triggering the L&H MGA licensing requirement by specifying that such agreements:
- are directly with an insurer;
- involve the person or entity acting as an intermediary between the insurer and agents authorized by the insurer; and
- are for the purpose of facilitating the distribution of life or accident and sickness insurance by engaging in, or retaining another person or entity to engage in, supervising or monitoring agents and/or screening of agents and/or prospective agents.
- Narrowing the activities and entities captured for licensing.
The regulated activities prescribed for L&H MGA licensing purposes would be narrowed to:
- supervising or monitoring the activities of agents;
- screening agents or prospective agents; or
- other activities that may be prescribed by regulation.
The goal of this amendment is to avoid capturing activities by persons or entities which are already subject to licensing and regulatory requirements as well as businesses that would not reasonably be considered L&H MGAs.
In addition to the regulated activities prescribed for L&H MGA licensing, the MOF is proposing to prescribe additional activities that would not trigger the L&H MGA licensing requirement on their own, but would still be subject to regulation by FSRA to enhance consumer protection. The proposed activities are:
- recruiting agents or prospective agents;
- providing training to agents or prospective agents;
- supervising or monitoring the activities of prospective agents; or
- other activities that may be prescribed by regulation.
The MOF is also proposing express exemptions from the requirement to obtain an L&H MGA license for certain entities. Currently, exemptions are being considered for insurers and for L&H MGAs that solely facilitate the distribution of group insurance. The amendment would also allow FSRA to identify and prescribe future exemptions.
Further, the amendment would remove the statutory references to sub-managing general agents, with responsibility for consumer protection resting with the insurer or the L&H MGA contracting directly with the insurer.
What This Means for the Industry
The stated intent of the proposed amendment is to refine the frameworkâs scope and reduce the risk that entities will require an additional L&H MGA licence merely because they perform an isolated administrative, contracting or distribution function.
If adopted, the amendments should provide greater clarity for persons and entities whose agreements and activities may have been captured by the current language.
Industry stakeholders who do not view themselves as traditional L&H MGAs should be paying particular attention to the proposed amendments to confirm whether they are likely to be deemed L&H MGAs based on the revised criteria.
Comments on the MOF’s proposal may be submitted until August 17, 2026.
