Ontario revisits Life and Health MGA licensing framework

The Ontario government is proposing important amendments to the licensing framework for Life and Health (L&H) Managing General Agents (MGAs). If adopted, the revised framework could bring Ontario’s approach into closer alignment with existing MGA licensing regimes in Saskatchewan and New Brunswick and serve as a stronger model for harmonization across other provinces.

What you need to know

• The Ontario Ministry of Finance is consulting on proposed amendments intended to narrow the scope of the L&H MGA licensing framework in response to industry concerns that the previous framework was overbroad.
• Persons or entities that do not have agreements directly with insurers, or that do not act as intermediaries between insurers and authorized agents, would no longer be captured by the proposed licensing requirements.
• Activities such as recruiting and training agents would shift from licensing triggers under the previous framework to oversight by the Financial Services Regulatory Authority of Ontario (FSRA) through standards of practice (SOPs), reducing the compliance burden for persons or entities that perform these functions but are not commonly understood to be MGAs.
• Stakeholders have until August 17, 2026, to provide feedback on the proposed changes.

Background

The L&H MGA licensing framework was originally introduced in 2024 through amendments to Ontario’s Insurance Act. FSRA subsequently launched two consultations on a proposed Rule to implement the framework, the first closing on April 30, 2025, and the second closing on November 19, 2025. The licensing framework was intended to address a regulatory gap: MGAs play a significant role in distributing L&H insurance in Ontario but are not currently subject to their own explicit licensing requirements.

As we detailed in a previous article, the 2024 licensing framework cast a wide net to establish its definition of an L&H MGA. Notably, it did not require a person or entity to have a direct agreement with an insurer to be classified as an MGA. It also included an expansive list of activities that could trigger the licensing requirement, such as recruiting agents or merely providing training to agents, and gave rule-making authority to FSRA to prescribe additional activities that would trigger the licensing requirement.

Stakeholders raised concerns that the breadth of the licensing regime would capture entities beyond those commonly understood to be L&H MGAs. Some of the key concerns were that entities with only indirect relationships with insurers could be captured, and that many of the activities triggering the licensing requirement overlapped with activities routinely performed by entities already licensed as agents, creating duplication with the existing agent licensing framework.

The Ontario government responded to these and other concerns in the 2026 Budget¹ by announcing a pause on implementing the framework, which was meant to come into effect on June 1, 2026. The pause was meant to allow the Ministry of Finance to propose legislative changes that would narrow the scope of who is required to obtain an L&H MGA licence and provide better regulatory clarity. This decision to pause and return the framework to the Ministry of Finance for legislative amendments reflects the government’s recognition that the issues raised were fundamental to the legislative framework itself, rather than details that could be addressed at the rule-making level.

Proposed 2026 amendments

On July 3, 2026, the Ministry of Finance published a consultation paper proposing amendments to narrow the licensing regime so that it applies primarily to entities that are commonly understood to be L&H MGAs. The overarching objective is to limit the framework to intermediaries between insurers and authorized agents that undertake activities which have a direct impact on consumers, such as supervising insurance agents.

The proposed amendments would limit the types of agreements captured for licensing purposes to agreements directly between insurers and intermediaries. Agreements must also be for the purpose of facilitating the distribution of life insurance or accident and sickness (A&S) insurance.

The consultation paper also uses the words “facilitating the distribution” rather than referring to the sale of insurance products, reinforcing that the licensing framework targets the intermediary distribution function rather than direct sales activities. This change is perhaps the most significant in responding to stakeholder concerns, as it attempts to establish a clear line between the L&H MGA function and the activities of corporate agencies and individual agents who were never intended to be captured. By requiring a direct contractual relationship with an insurer and an intermediary role between that insurer and its agents, the proposed definition more closely aligns with the common understanding of L&H MGAs.

Narrowing licensed activities

The Ontario government is also proposing to narrow the list of activities in section 407.2 of the Insurance Act that trigger the licensing requirement. Under the proposal, the licensed activities would be limited to (i) supervising or monitoring the activities of agents, and (ii) screening agents or prospective agents, in addition to other activities later prescribed by regulation. The proposed amendments would also shift future authority to prescribe additional MGA activities from FSRA's rule-making powers to the regulation-making process.

It is important to note that the activities removed from the licensing triggers in section 407.2 would not go unregulated. The Ministry is proposing to amend the Insurance Act to identify these activities as ones for which FSRA may set SOPs, including roles and responsibilities of insurers, L&H MGAs, and agents, without tying the performance of those activities to a requirement to obtain an L&H MGA licence. Activities that would be subject to SOPs rather than licensing include recruiting agents or prospective agents, providing training to agents or prospective agents, and supervising or monitoring the activities of prospective agents. This would preserve FSRA’s ability to regulate key consumer-facing activities while removing the potential licensing burden for entities that may only peripherally engage in MGA-related work. It also helps to address the concern over duplicative regulation between the L&H MGA licensing regime and existing obligations already imposed on licensed insurers and agents.

Sub-MGAs

The proposed amendments would also remove the definition and all references to sub-managing general agents (sub-MGAs) from the Insurance Act. Given the proposed changes to section 407.2 and the new requirement that agreements must be directly with an insurer, entities previously captured as sub-MGAs would no longer fall within the MGA licensing requirement. However, this does not mean that sub-MGAs would escape accountability. The Ministry would preserve accountability by looking to the insurer or licensed L&H MGA responsible for the delegated activity, even where the work is performed through a third party such as a sub-MGA.

SOPs for sub-MGA activities are expected to be developed in future FSRA rules and guidance. In addition, persons or entities that would have been captured as sub-MGAs under the 2024 framework will continue to be required to meet the terms of any other existing licences, as applicable.

Licensing exemptions

In addition, two licensing exemptions are proposed. The first exemption is for insurers, including officers and employees acting on behalf of insurers, since insurers are already subject to extensive oversight and licensing requirements.

The second exemption is for L&H MGAs that solely facilitate the distribution of group insurance, as the focus of the framework is on the risks posed to individual retail consumers of insurance products. The proposed exemptions would be subject to change in the future as needed, and the Ministry of Finance proposes that any additional exemptions from L&H MGA licensing requirements be prescribed through future regulation.

Issues not addressed in the consultation paper

One aspect of the 2024 framework that does not appear to have been considered in the proposed amendments is the requirement under section 407.12 of the Insurance Act for insurers to provide notice to FSRA when entering into, amending, or terminating an MGA agreement. This provision, which effectively requires all L&H MGA agreements to be submitted to the regulator, remains intact and would apply to agreements with all licensed L&H MGAs. While the narrowed scope of licensing may reduce the volume of agreements subject to this requirement, the filing obligation itself adds a layer of regulatory oversight not present in the MGA licensing frameworks of other provinces.

Another issue that was raised in industry feedback but does not appear to be addressed in the consultation paper relates to the treatment of A&S insurance products underwritten by property and casualty (P&C) insurers. The 2024 amendments to the Insurance Act created an MGA licensing class for life and A&S insurance, as well as a separate MGA licence class for A&S insurance only, which, of course, can be underwritten by either a life insurer or a P&C insurer. However, both drafts of the FSRA MGA Rule released in 2025 specified that the rule only applied to life and A&S insurance underwritten by “insurers that are licensed for the class of life insurance”. As a result, MGAs distributing A&S-only insurance products, such as travel medical insurance, would be caught by the L&H MGA licensing framework if their products are underwritten by a life insurer, but would avoid the framework if the exact same products were underwritten by a P&C insurer. The July 2026 consultation paper does not appear to propose any changes that could address this gap, as the proposed amendments continue to focus on “life or accident and sickness insurance”.

Implications for harmonization and next steps

Despite this remaining gap, the proposed amendments in the consultation paper appear to be a positive step for the Ontario L&H MGA licensing framework. In key respects, the proposal brings the framework closer to the other two existing MGA licensing regimes in Saskatchewan and New Brunswick by requiring a direct agreement with an insurer and the intermediary function between an insurer and agents. That said, Ontario’s requirement under section 407.12 of the Insurance Act to file MGA agreements with FSRA has no equivalent in either Saskatchewan or New Brunswick and adds a layer of regulatory oversight distinct from those jurisdictions.

On the whole, the proposed amendments represent meaningful progress toward interprovincial harmonization on MGA licensing compared to the previous 2024 framework. If adopted, Ontario’s revised framework could provide a credible foundation for a more harmonized national approach to L&H MGA oversight, particularly as other provinces that do not yet have dedicated MGA licensing regimes consider introducing them.

Finally, while not proposing specific amendments at this time, the consultation paper also seeks feedback on whether additional business structures beyond corporations and partnerships should be eligible to apply for an L&H MGA licence. Under the current framework, individuals are not eligible to apply unless operating under an appropriate business structure. The Ministry notes that stakeholders have raised concerns about the potential impacts of this restriction on certain business models in which individuals who are not a partner in a partnership or employed by a corporation are delegated to perform one or more L&H MGA regulated activities.

The consultation remains open until August 17, 2026, and submissions must be made through the Ontario Regulatory Registry.