Changes to Financial Services Regulation in British Columbia
November 5, 2019
British Columbia’s new regulator, the BC Financial Services Authority (BCFSA), commenced operations on November 1, 2019, when the key sections of its empowering legislation came into force, at which time the Financial Institutions Commission of British Columbia (FICOM) ceased its operations.
BCFSA is a new Crown corporation governed by the Financial Services Authority Act, 2019 (Bill 26), which received royal assent on May 16, 2019. BCFSA’s mandate includes the regulation of entities subject to the following B.C. legislation formerly regulated by FICOM: Credit Union Incorporation Act, Financial Institutions Act, Insurance Act, Insurance (Captive Company) Act, Mortgage Brokers Act and Pension Benefits Standards Act. BCFSA is intended to improve accountability and oversight, align with international best practices and be consistent with other regulators.
In addition, proposed amendments to the B.C. Financial Institutions Act are currently before the B.C. Legislature. The Financial Institutions Amendment Act, 2019 (Bill 37) received first reading on October 21, 2019. Of note are the following proposed changes set out in Bill 37:
- Section 12: Rules for the online sale of insurance in B.C. are proposed to be provided by regulation, the text of which has not yet been released, and additional rules set out by the BCFSA.
- Section 14: Bill 37 proposes a requirement for B.C.-regulated insurance companies and credit unions to adopt and comply with a code of market conduct, the content of which will be periodically established by the BCFSA. Also, B.C.-regulated credit unions would be required to establish a customer complaint resolution process, the details of which must be published on the credit union’s website and made available upon request.
- Section 31: A regime for restricted insurance agent licensing is proposed in Bill 37, the rules and requirements of which would be set by the Insurance Council of British Columbia.
- Section 43 and Division 1.1: These provisions include expanded rule-making authority for the BCFSA as well as the authority to collect and publish certain prescribed financial, risk-related and complaint information. BCFSA would also be granted additional powers in respect of its special examinations and investigations.
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