On July 3, 2026, the Ontario Ministry of Finance (the MOF) released a consultation paper (the Consultation Paper) setting out proposed amendments (the Proposed Amendments) to the licensing framework for life and health managing general agents (L&H MGAs) conducting business in Ontario under the Insurance Act (Ontario) (the Act). The MOF had previously introduced a new licensing framework for L&H MGAs in Ontario in the fall of 2024 (the Prior Amendments). The Proposed Amendments intend to address certain stakeholder concerns raised following the introduction of the Prior Amendments, which primarily relate to the scope of persons and entities potentially captured as L&H MGAs for insurance licensing purposes. In response to such concerns, the Ontario government announced a pause on the implementation of the new licensing framework in section 407.2 of the Act in the 2026 Ontario Budget.
The Financial Services Regulatory Authority of Ontario (FSRA) had previously announced on February 23, 2026, that it would be pausing work on Proposed Rule 2025-001 – Life and Health Managing General Agents (which had an initial target effective date of June 1, 2026), a move which was received favourably by the industry.
According to the MOF, the Proposed Amendments aim to narrow the scope of persons that would be captured under the Act as L&H MGAs for licensing purposes in order to improve regulatory clarity, reduce unnecessary duplication and mitigate the risk of unintended consequences. The MOF is also seeking input on associated consequential amendments to the Act, and other potential changes to the licensing framework for L&H MGAs in Ontario.
This article summarizes the Proposed Amendments and outlines the applicable next steps for life and health insurance industry stakeholders in Ontario.
Target outcomes for the new Proposed Amendments
In releasing the Proposed Amendments, the MOF identified the following target outcomes for the licensing framework applicable to L&H MGAs in Ontario:
- the scope of application for L&H MGA licensing is clear and commensurate with corresponding consumer protection risks;
- the Proposed Amendments complement, rather than duplicate, other existing life and health insurance intermediary licensing requirements in Ontario (while at the same time ensuring consumer protection is maintained);
- key activities that may impact consumer outcomes within the L&H MGA distribution channel are performed effectively and in accordance with standards of practice;
- there is clear understanding of sector roles and responsibilities, and these are delineated where possible and appropriate;
- when there are breakdowns in the performance of key activities, there are clear lines of accountability and FSRA can take appropriate enforcement action; and
- the risks of L&H MGAs restructuring or delegating activities to avoid regulation under the Act are mitigated.
Key elements of the Proposed Amendments
The key elements of the Proposed Amendments are summarized below.
I. Scope of L&H MGA definition and corresponding licensing obligations
Stakeholder feedback on the Prior Amendments raised concerns that more persons than originally expected would be captured under the L&H MGA licensing regime, resulting in undue regulatory burden, implementation challenges and potential unintended impacts on certain industry participants. The Consultation Paper sets out proposed amendments to both the types of contractual agreements and the regulated activities captured under section 407.2 of the Act, which together define the persons or entities required to obtain an L&H MGA licence. The MOF’s intent with such changes is to narrow the types of contractual agreements and regulated activities that would trigger L&H MGA licensing, without compromising consumer protection.
a. Narrowing the types of contractual agreements captured
Under the Proposed Amendments, the types of contractual agreements potentially triggering L&H MGA licensing must now: (i) be directly with an insurer; (ii) involve the person or entity acting as an intermediary between the insurer and agents authorized by the insurer; and (iii) be 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, the supervising or monitoring of agents or screening of agents or of prospective agents. Under the Prior Amendments, the Act did not require that agreements be directly with insurers, nor that the person or entity be an intermediary between an insurer and authorized agents. The MOF is also proposing to clarify that the purpose of such agreements is specifically to facilitate the distribution of insurance products, which is distinct from the selling of such products.
b. Narrowing the list of regulated activities
The MOF proposes to narrow the prescribed listing of activities that may trigger L&H MGA licensing to: (i) the supervising or monitoring of the activities of agents; (ii) screening agents or prospective agents; or (iii) other activities as may be prescribed by regulation. In contrast, the Prior Amendments contain a longer list of activities including (i) providing training to agents; (ii) recommending agents to insurers to sell or solicit life or accident and sickness insurance; and (iii) transmitting an insurance application or a policy of insurance between an insurer and an agent. The MOF’s intent in proposing these revisions is to focus on capturing those activities most relevant to ensuring L&H MGAs meet regulatory and corporate expectations with respect to agent oversight, and which, when delegated by insurers, can impact consumer outcomes.
The Prior Amendments include a significantly longer list of prescribed activities that may trigger L&H MGA licensing under the Act. Stakeholders expressed concern that under the Prior Amendments the prescribed list of activities that may trigger L&H MGA licensing significantly overlaps with activities performed, in the course of normal business, by other already-licensed and FSRA-regulated persons or entities, such as insurers and agents, and could potentially capture businesses such as third-party education or service providers who would not reasonably be considered L&H MGAs.
II. Removal of sub-managing general agents
The MOF also proposes to remove the definition of “sub-managing general agent” and all references to sub-managing general agents from the Act. The Prior Amendments defined a “sub-managing general agent” as a managing general agent that performs managing general agent activities pursuant to an agreement with another managing general agent or sub-managing general agent. The MOF believes that consumer protection can be upheld by overseeing and holding insurers or L&H MGAs (or both, as applicable) accountable for the non-compliance of any persons that an L&H MGA engages as a sub-managing general agent. Relevant standards of practice applicable to L&H MGAs regarding such matters will be further developed in future FSRA rules and guidance.
III. Proposed exemptions from L&H MGA licensing
The MOF proposes certain exemptions from the L&H MGA licensing requirements under the new Proposed Amendments. In particular, the MOF proposes exemptions applicable to the following two categories of persons:
a. Insurers
As insurers are already subject to robust licensing and regulatory requirements in Ontario, the MOF is proposing an exemption for authorized insurers (including officers or employees acting on an insurer’s behalf) which would be consistent with the goals of minimizing unnecessary regulatory duplication without creating risks to consumer protection. FSRA would retain rulemaking authority to set standards of practice, including roles and responsibilities, with respect to L&H MGA activities and obligations applicable to insurers under the new Proposed Amendments.
b. L&H MGAs solely facilitating the distribution of group insurance
FSRA’s past supervisory reviews involving the L&H MGA distribution channel focused on L&H MGAs distributing individual insurance products to retail consumers. According to the MOF, there is currently less evidence that L&H MGAs solely facilitating the distribution of group insurance contracts while performing the prescribed agent-related activities pose the same level of risk to consumer protection.
These proposed exemptions are subject to change in the future based on new supervisory evidence or risks identified by FSRA, and additional exemptions may be prescribed through future regulation as needed.
IV. Standards of practice for additional L&H MGA activities
As a consequence of narrowing the list of regulated activities that may trigger L&H MGA licensing, FSRA would no longer be authorized to set standards of practice or establish roles and responsibilities for certain activities that were removed from the list of those that may trigger L&H MGA licensing under the Prior Amendments. To address this, the MOF is proposing to prescribe certain activities which, while not triggering a licensing requirement on their own, would remain subject to regulation as part of the overall L&H MGA licensing regime. At this time, such prescribed activities would be (i) recruiting agents or prospective agents; (ii) providing training to agents or prospective agents; (iii) supervising or monitoring the activities of prospective agents; and (iv) such other activities and functions as may be prescribed by regulation. It is not clear what the nature of regulation in respect of such activities will be, or the steps that an entity engaging in such activities will need to take to remain compliant.
V. Additional matters for consultation
The Consultation Paper also invites feedback on the following issues:
a. Business structures eligible for licensing
The Prior Amendments state that only a corporation or partnership or certain other prescribed entities may apply for a L&H MGA licence, and individuals are not eligible to apply for such licensing unless doing so under a corporation or partnership approved by FSRA. Some stakeholders raised concerns regarding the potential impact of this approach on certain business models where individuals who are not employed by a corporation or a partner in a partnership, are delegated to perform regulated activities (that would trigger insurance licensing in Ontario). Accordingly, the MOF is seeking feedback as part of the Consultation Paper regarding whether additional corporate structures should be explicitly prescribed as being eligible to apply for an L&H MGA licence.
b. Opportunities to reduce duplication
The MOF also invited general stakeholder feedback on any other opportunities to reduce potential duplication or regulatory burden associated with the implementation of the L&H MGA licensing framework, or to address other potential implementation risks or unintended consequences.
VI. Next steps
We anticipate that, although the life and health insurance industry will welcome many of the proposed revisions when compared to the Prior Amendments, there will be additional feedback and questions raised by the Consultation Paper and the proposed legislative changes. Stakeholders have been afforded a fairly limited window to submit their responses to the Consultation Paper, which must be submitted to the MOF through the online Regulatory Registry by August 17, 2026.
Please do not hesitate to contact any member of Dentons Canada’s Corporate and Regulatory Insurance team should you wish to discuss the proposed amendments and/or to prepare a submission to the MOF in response to the Consultation Paper.
For more information on this topic, please reach out to the authors, Laurie LaPalme, Marisa Coggin and Jesse Collins-Swartz.
