The Canadian Council of Insurance Regulators (CCIR) has identified a lack of clarity in the roles, responsibilities, accountabilities and appropriate oversight of the agent, the MGA and the insurer.  Life insurance agents do not have to place their business with only one insurer, and while insurance companies are ultimately responsible for the actions of their agents, there is very little supervision of agents being performed  The CCIR will determine if regulation needs to be changed to meet goals such as fair treatment of consumers.

Morningstar calls for integration of the compliance functions for securities and insurance within a securities or fund dealer’s existing structure for those agents who are dual-licensed and can sell securities and mutual funds as well as insurance.  For those who sell insurance only, Morningstar suggests setting minimum standards for supervision and require a senior agent or broker be responsible for compliance within a branch who would have to meet higher standards of proficiency than the LLQP.  It also calls for better disclosure about insurance products. 

Steven Kelman sheds light on who is responsible for the actions of a financial advisor who sells insurance and how supervision can be improved in this article.