Was your life insurance policy sold correctly? Regulator penalized 65 life insurance agents — and the $224,000 in fines tells only part of the story

As a result of the FSRA investigation, 65 agents were penalized for a combined 184 violations of the Insurance Act, including unsuitable sales practices, failure to disclose conflicts of interest, incomplete training and misrepresentation to the regulator.

What agents were actually doing — and why it harmed clients

The three MGAs at the centre of FSRA’s review — Greatway Financial Inc., World Financial Group Insurance Agency of Canada and Experior Financial Inc. — all use a tiered-recruitment model. In that structure, agents are paid not just for selling policies, but also for recruiting other agents. That creates an incentive to prioritize recruitment over client suitability.

The three firms together represented roughly 20% of all licensed life insurance agents in Ontario at the time of the review — approximately 12,775 agents, according to FSRA files.

FSRA found that agents frequently recommended overfunded universal life (UL) policies without conducting a proper needs analysis or considering whether simpler, lower-cost alternatives would better serve the client. In many reviewed files, the regulator found that the needs analyses were “trivial, flawed or identified no insurance need at all.” Retirement planning advice was described as incomplete or inaccurate, and policy illustrations were misleading or unrealistic.

Most critically, the FSRA reports noted that agents often failed to discuss tax-free savings accounts (TFSAs) or registered retirement savings plans (RRSPs) as alternatives to overfunded UL premiums — despite these being more appropriate for many clients seeking estate solutions.

The enforcement actions were not limited to agents with prior regulatory red flags. FSRA explicitly noted that none of the 130 agents reviewed had been previously flagged for compliance concerns. The regulator found the conduct at these firms was worse than at firms whose agents had been specifically selected due to past misconduct.

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The universal life insurance problem: Who it’s for — and who it isn’t

Universal life insurance is a permanent life insurance product that combines a death benefit with a self-directed investment component. Policyholders can pay more than the minimum premium to build a tax-sheltered investment account inside the policy — a strategy sometimes called an “overfunded” UL policy.

Agents sometimes marketed overfunded UL policies as an investment tool available to almost anyone. But for most everyday Canadians — particularly younger, lower-income individuals with high-interest debt and no existing savings — the math rarely works in the client’s favour.

FSRA’s report was direct: “Given that many of these cases involved young people with modest means, no savings and carrying high interest debt, the money being used to overfund UL premiums under the guise of helping them grow their savings may well have otherwise been put to better use through investment in TFSAs or by reducing their personal debt.”

The scale of UL selling at these firms reinforces the concern. According to FSRA data, approximately 92% of Greatway’s $42.8-million gross income for 2020 came from the sale of permanent life insurance products — 99% of that from universal life. In 2020 and 2021, more than half of all policies sold by the three firms were universal life policies.

Universal life insurance can be appropriate in specific circumstances: When you have a genuine need for permanent life coverage, when you are already maximizing your TFSA and RRSP, when you have no high-interest debt, and when you are prepared to actively manage the policy over many years. For the typical client in their 20s or 30s with limited savings and credit card debt, a term life policy paired with a TFSA is almost always a better starting point.

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Where the new MGA oversight rule stands now

In response to its enforcement findings, FSRA developed a proposed licensing and compliance framework specifically for life and health MGAs in Ontario — Proposed Rule 2025-001. The rule would have required MGAs to obtain a licence, meet suitability standards and implement formal compliance systems.

The framework had been targeted for launch on June 1, 2026. However, on February 23, 2026, FSRA announced it was pausing work on the rule. The regulator cited the need for further consideration of industry feedback, including concerns that the proposed rule’s definition of “MGA” was too broad and could inadvertently capture individual advisors and small practices that are not true distribution-level intermediaries.

The Ontario government has stated it remains committed to establishing a licensing framework for life and health MGAs and will communicate next steps in due course. Saskatchewan and New Brunswick have both introduced MGA licensing regimes — in 2020 and 2023, respectively — and Ontario’s regulatory approach is expected to align with those models once revised.

The pause does not affect the enforcement actions already taken against individual agents, nor does it reduce FSRA’s existing authority to investigate complaints and sanction agents under the Insurance Act. The protections available to consumers remain in place; the outstanding issue is whether a new layer of MGA-level oversight will be added.

How to find out if your policy was sold correctly

If you purchased a universal life insurance policy through an agent linked to one of the named firms — or through any MGA-linked agent — in the past several years, you have a practical path to reviewing your situation.

Start by asking for the original needs analysis. Every licensed agent is required to complete a documented needs analysis before recommending a life insurance product. Request a copy. If it does not clearly identify your financial situation, existing debt, savings and specific insurance needs, that is a problem.