Recent developments in insurance regulation
Authors
Insurance regulation in Canada has seen significant activity in 2026. At the federal level, the Office of the Superintendent of Financial Institutions (OSFI) continues to build on the priorities identified in its 2026-2027 Annual Risk Outlook, including through its Quarterly Release and Industry Days. Provincial insurance regulators have also been active on several fronts this year, advancing new licensing frameworks and increasing their focus on consumer protection in the distribution of insurance products. Below, we summarize recent federal and provincial developments of particular relevance to insurers, distributors, managing general agents, and other industry participants operating across Canadian jurisdictions.
Insurance regulatory returns
OSFI published its third Quarterly Release of 2026 on September 10, in advance of Industry Day on September 24. Included with that release was an update to OSFI’s regulatory return templates for insurers to align with changes to IFRS 18 that introduce new presentation and disclosure requirements for financial statements1. Filings using the revised OSFI regulatory returns will be expected starting January 1, 2027 (for December fiscal year end filers) and November 1, 2027 (for October fiscal year end filers).
Use of catastrophe bonds as reinsurance for property and casualty companies
OSFI published a regulatory notice on July 20 to the property and casualty (P&C) industry, which communicated, effective immediately, the addition of natural catastrophe bonds as a form of reinsurance to reduce capital requirements for insurance risk, subject to obtaining prior OSFI approval2. Natural catastrophe bonds are insurance‑linked securities issued for the sole purpose of transferring natural‑hazard‑related risk from an insurer, reinsurer, or sponsor to capital markets for a predefined natural peril, such as earthquakes, hurricanes, severe convective storms, floods, wildfires, and other naturally occurring environmental events.
Changes will need to be made to section 4.3 of the Minimum Capital Test Guideline to include the use of natural catastrophe bonds as a form of reinsurance for capital credit, but the interim guidance is meant to provide timely and clear direction to insurers who want to use natural catastrophe bonds as part of their reinsurance risk management.
OSFI has published a regulatory notice to the property and casualty industry, which communicated the addition of natural catastrophe bonds as a form of reinsurance to reduce capital requirements for insurance risk.
Ontario: Life and Health MGA licensing framework
This summer, the Ontario government consulted on significant amendments to narrow the scope of its Life and Health Managing General Agent (MGA) licensing framework. Following industry concerns that the proposed regime (originally introduced in 2024) was overbroad, the 2026 Budget announced a pause on implementation and returned the framework to the Ministry of Finance for legislative revision3. The proposed amendments, published on July 3, would limit the licensing requirement to intermediaries with direct agreements with insurers that facilitate the distribution of life or accident and sickness insurance.
Activities such as recruiting and training agents would shift from licensing triggers to Financial Services Regulatory Authority of Ontario (FSRA) standards of practice, reducing the compliance burden for entities performing peripheral MGA-related functions. 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 credible foundation for greater interprovincial harmonization. The consultation period closed on August 17.
British Columbia: restricted insurance licensing framework
British Columbia’s Restricted Insurance Agent Licence Regulation, enacted in December 2025 and scheduled to take effect on January 1, 2027, will establish a new licensing framework for incidental sellers of insurance. Earlier this year, the Insurance Council of BC consulted on proposed rule changes to implement the regime. Industry stakeholders have raised concerns about the proposed training and accreditation requirements, which go far beyond similar regimes in Manitoba, Saskatchewan, Alberta, and New Brunswick. It has also created some uncertainty around the ability of deposit-taking institutions to offer travel insurance, since it was not expressly included under the new regime. The accreditation application process, originally expected to open in July, has been deferred to fall 2026.
FSRA: consumer warning on gap insurance
On July 23, FSRA published a consumer alert that warned Ontario vehicle buyers about risks associated with Guaranteed Asset Protection (GAP) insurance purchased from unlicensed businesses and individuals, noting that such coverage may not be valid and that claims may not be honoured4. The notice is written for a general audience and, as such, does not distinguish between third-party GAP insurance products and contractual waiver GAP products issued by financing and leasing companies. While it is a welcome step in addressing unlicensed activity, the industry would benefit from more detailed guidance on ancillary insurance and warranty products, as British Columbia and Alberta have done in recent years.
- IFRS, “IFRS 18 Presentation and Disclosure in Financial Statements” (Standard 2026 Issued).
- Government of Canada, “Regulatory notice on using natural catastrophe bonds in the Minimum Capital Test guideline” (July 20, 2026).
- Ontario Ministry of Finance, “A Plan to Protect Ontario: 2026 Ontario Budget” (March 26, 2026).
- Ontario Ministry of Finance, “A Plan to Protect Ontario: 2026 Ontario Budget” (March 26, 2026).