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Brian Goldfinger on the death of FSCO and the birth of FSRA

Everyone loves a good acronym. It’s fun to guess what the letters in the acronym stand for…..or don’t.

Here are a few non legal examples:

BRB Be right back

GTG Got to Go

LOL Laugh Out Loud

Here are a few legal examples of acronyms which personal injury lawyers in Ontario see everyday:

IRB Income Replacement Benefit

NEB Non Earner Benefit

SOC Statement of Claim

ACB Attendant Care Benefit

Here is one acronym which has been in use for over 20 years in legal circles which will soon go extinct:

FSCO Financial Services Commission of Ontario

The Financial Services Commission of Ontario is a regulatory agency of the Ontario Government that use to regulate insurance, pension plans, loan and trust companies, credit unions, caisses populaires, mortgage brokers, and co-operative corporations in Ontario. FSCO regulated or registered:

  • 316 insurance companies
  • 7,022 pension plans
  • 98 credit unions and caisses populaires
  • 57 loan and trust corporations
  • 1,216 mortgage brokerages
  • 2,754 mortgage brokers
  • 12,275 mortgage agents
  • 184 mortgage administrators
  • 4,630 accident benefit service providers
  • 1,764 co-operative corporations
  • 54,128 insurance agents
  • 5,911 corporate insurance agencies
  • 1,740 insurance adjusters 

When innocent car accident victims were having problems with their own insurance companies, they made an application to FSCO (at no charge for mediation). When there was a dispute between an innocent accident victim and his/her insurer about accident benefits which were in dispute, it was heard at FSCO. When two insurance companies had a dispute between each other over priority, it went to FSCO.

FSCO is dead. Enter the Financial Services Regulatory Authority (FSRA).

Effective June 8, 2019, the Financial Services Regulatory Authority (FSRA) will assume the regulatory functions of the Financial Services Commission of Ontario (FSCO) and the Deposit Insurance Corporation of Ontario (DICO).

The Financial Services Regulatory Authority (FSRA) of Ontario is a modern and innovative regulator with rule-making authority that promotes strong financial services and pensions sectors while protecting the public interest,” said Finance Minister Vic Fedeli. “Its mandate is to be open —open to new ideas, open to business, and open to consumer needs. FSRA has the flexibility to cut red tape, bring products to market quicker and be more responsive to the needs of businesses.”

FSRA replaces the Financial Services Commission of Ontario (FSCO) and the Deposit Insurance Corporation of Ontario as an integrated, independent and self-funded regulator for financial services and pensions.linkedin-2-300x300

The new regulator will oversee Ontario’s financial services providers, excluding securities which are regulated by the Ontario Securities Commission, and will tackle key priorities in its first year of operation that will reduce regulatory burden for regulated sectors.

In particular, FSRA is instrumental to the government’s priorities including reforming auto insurance to increasing access and affordability for drivers, and to establishing title protection for financial planners and financial advisors to enhance consumer protection without introducing unnecessary regulatory burden.

Why the death of FSCO? Not sure. I can tell you from experience that FSCO was reasonably fair to innocent accident victims. The mediators or arbitrators knew the laws, procedures and the system very well. There was an unfortunate backlog of disputes at FSCO, which may be attributable to lack of resources at FSCO, or other factors to which I’m not privy. The nice thing about FSCO, and the previous dispute resolution system in place in Ontario is that the parties could opt out of FSCO and elect to pursue the case before the Courts if they didn’t like the FSCO forum.

In short, Plaintiffs could opt to sue their own insurance company in Court over a denial of accident benefits rather than proceed with a FSCO arbitration.

The dispute resolution arm of FSCO was stripped of them and moved to the License Appeal Tribunal or LAT (yet another legal acronym).

An overwhelming majority of LAT decisions have been pro insurer. The number of pro insurer LAT decisions has been disproportionate to the number of decisions which went in the favour of Plaintiffs at FSCO. Makes you wonder. If you can’t win, then change the game or change the battle ground. This is exactly what happened with the introduction of the LAT.

Readers of the Toronto Injury Lawyer Blog should know that the LAT doesn’t just handle car insurance and accident benefit disputes. It handles a hodge podge of claims including but not limited to:

  • Liquor License Matters and Registration
  • Cannabis License and Registration
  • New Home Warranty Disputes
  • Car Impound Disputes

The FSRA is suppose to cut “red tape”. I’m really not too sure how it will all play out. Behind the grandiose rationale that the FSRA will make Ontario Open for Business in a way that FSCO did it was that insurers likely believed that FSCO had failed them. It failed to secure their interests and it was too expensive for them so a new body had to be created (the FSRA), along with a new dispute resolution forum (the LAT), to better protect their interests.

When all else fails, blow it up. And this is exactly what we are seeing when it comes to Ontario car insurance dispute resolution. We had a system with FSCO and the Courts,which provided accident victims access to justice and results. Insurers were not happy with this system, so they changed the game. Now we have a completely different playing field and regulatory body. How the FSRA will treat, act, and legislate accident benefit policy has yet to be seen. If it was anything like the change from dispute resolution at FSCO to the LAT, it will likely not favour the injured. Instead the change will favour large, deep pocketed insurance companies to minimize their exposure and risk to claims.

I would be remiss if I didn’t talk about the historic playoff run that the Toronto Raptors are making. Advancing all the way to the NBA Finals is a first and has captured the hearts and spirit of Canadians from coast to coast. Viewing parties sprouting up all across Canada; kids paying more attention to the sport of basketball, and the attention which basketball is receiving is beautiful to see for a country more known for its passion for hockey as opposed to basketball. For a basketball fan, I hope to see Canadians building on this momentum and continuing to grow the sport I love.

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