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Insurance industry in Ontario

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The insurance industry in Ontario is regulated by the Insurance Act (R.S.O. 1990, c. I.8). The Ministry of Finance regulates insurance services through the Financial Services Commission of Ontario (FSCO), an amalgamation of the former Ontario Insurance Commission, the Pension Commission and the Deposit Institutions Division of the Ministry of Finance.

In his introduction to the Study Paper on the Legal Aspects of Long-term Disability Insurance, author Marvin Baer remarks, however, that “many of the basic laws and principles that regulate insurance are found in the common law and the legislation tends to be of a piece-meal nature”[1].

Baer goes on to say that the insurance industry has no legal obligations directly relating to the assessment of risk. The "Unfair Practices" provision of the Insurance Act is the only legal deterrent and the Superintendent of Financial Services would not often take action under this provision.

However, FSCO points out that potentially unfair practices are routinely eliminated by agreement through negotiations conducted by FSCO staff in several departments. Hence holding formal hearings has not been necessary for the most part.

[1] Baer, Marvin. “Study Paper on the Legal Aspects of Long-Term Disability Insurance” (1996) p.2, prepared for the Ontario Law Reform Commission and submitted to the Attorney General for Ontario.

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