Ontario watchdog boosts penalties and probes, putting suitability, and oversight under sharper glare
FSRA is turning up the heat on enforcement – and its latest numbers show pension and insurance players are squarely in scope.
The Financial Services Regulatory Authority of Ontario (FSRA) created a principles‑based regulatory environment “to improve consumer and pension plan beneficiary protections in Ontario.”
In fiscal 2024‑25, its Enforcement team stepped up action using licensing sanctions, compliance orders and administrative monetary penalties (AMPs) across all regulated sectors, including pensions, life and health insurance, mortgages, auto insurance, health service providers, loan and trust companies and credit unions.
FSRA says it initiated 100 enforcement actions in 2024‑25, up from 65 the previous year. It imposed 80 unique sanctions, “nearly doubling volume over two fiscal years.”
AMPs totalled about $1.2m, with most imposed in the mortgage sector.
Across sectors, achieved sanctions rose from 47 in 2022‑23 to 54 in 2023‑24 and 80 in 2024‑25. Mortgage brokering remained the busiest area, followed by life and health insurance.
For life insurance, FSRA reports 27 achieved sanctions in 2024‑25, including six AMPs worth $232,000, seven refusals to licence, six revocations, three warning letters, two undertakings not to apply and three licence conditions.
In mortgages, it recorded 43 achieved sanctions: 22 AMPs totalling $860,925, one suspension, four compliance orders, six revocations, five refusals to licence, four licence conditions and one warning letter.
The pension sector remained quieter, but it did not escape attention.
FSRA issued a compliance order against Xylem Canada Company and reports two pension compliance orders in the 2024‑25 enforcement tables.
Whistle‑blower submissions fell from 87 to 70 year over year, but FSRA says they still mainly related to the mortgage and insurance sectors.
Following review, it issued 23 assurances of confidentiality, up from 14 the previous year.
Those assurances included three in the credit union sector and two in the pension sector.
The Investigations team completed 32 investigations in 2024‑25 involving 59 individuals, almost double the number of subjects from the prior year. Most of these files sat in the mortgage brokering sector.
Concluded‑investigation data show one pension investigation in 2023‑24 and none in 2024‑25, while subjects of concluded investigations in mortgages jumped from nine to 45 over the same period.
Information about potential non‑compliance reaches FSRA through public complaints, whistle‑blower reports, sector reporting such as Life Agent Misconduct Reports and Notices of Termination, and its own supervisory examinations.
Staff across the authority evaluate that information and often conduct further investigation.
They consider supervisory approaches as alternatives to enforcement.
When those measures are “insufficient to address the non‑compliance” or when a formal investigation is needed, FSRA escalates matters to its Enforcement team.
If Enforcement decides to proceed, it issues a public formal notice proposing a sanction.
The subject has a set time to request a hearing before the Financial Services Tribunal.
If there is no hearing request, FSRA issues an order imposing the proposed sanction.
If the subject asks for a hearing, the Tribunal receives evidence and submissions from both sides and decides whether FSRA should issue an order.
FSRA notes that cases can settle at any stage. When that happens, it publishes a news release, the settlement terms and the final order.
FSRA underlines its jurisdiction through the case of mortgage broker Harold Gerstel and his brokerage Harold the Mortgage Closer Inc.
After media reported that an elderly woman lost her home following several high‑interest loans, FSRA investigated Gerstel, his brokerage and a private lender.
It says Gerstel did not fully co‑operate and supplied false information in licence renewal applications. FSRA issued a Notice of Proposal to refuse his licence renewal, revoke the brokerage licence and impose penalties.
The Divisional Court and the Financial Services Tribunal confirmed that FSRA acted fairly and within its powers.
The Tribunal ruled that Gerstel failed to co‑operate, stressed that licensees must answer regulatory questions “honestly and completely,” revoked the brokerage licence, refused his renewal and imposed $70,000 in penalties.
Tools and infrastructure behind the crackdown
FSRA relies on three main tools: licence sanctions (suspensions, revocations, refusals and conditions), AMPs and compliance orders that require changes to conduct and governance.
AMP revenues go to prescribed purposes that benefit consumers, including research and educational initiatives.
To manage rising volume and complexity, the Enforcement team has launched a new investigative case management system to improve tracking of case progress and outcomes, and it is planning to integrate an e‑Discovery platform to support collection, analysis and management of information used in enforcement litigation.
