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Insurance Law

New Financial Consumer Agency of Canada (FCAC) Compliance Framework

Published: 11/30/2011

By Erin Brady, Richard Da Costa, Miho Felicio, Gordon Goodman, Laurie LaPalme, Brian Reeve

On November 14, 2011, the Financial Consumer Agency of Canada (“FCAC”) notified all Federally Regulated Financial Entities (“FRFEs”) of the new FCAC Compliance Framework (“New Framework”). The New Framework represents a more proactive and risk-based supervisory approach undertaken by the FCAC, setting out how the FCAC’s Compliance and Enforcement Branch carries out its mandate for supervising compliance with consumer provisions set out in legislation, consumer-focussed voluntary codes of conduct and public commitments. The New Framework was developed after consultation with industry stakeholders and acts as a foundation for all compliance and enforcement activities and actions undertaken by the FCAC.

The following are key aspects of the New Framework:

1. Reportable Complaints ‘Nil’ Reports –  A new filing requirement, FRFEs that do not have a reportable complaint to submit to the FCAC are now required to report this on a quarterly basis using a Reportable Complaints Nil Report template (“‘Nil’ Report”). CLICK HERE to access the ‘Nil’ Report template.
    
2. Reports on Voluntary Codes of Conduct or Public Commitments – A new filing requirement effective April 1, 2012, FRFEs will be required to send to the FCAC reportable complaints that relate to various voluntary codes of conduct or public commitments applicable to the FRFE.
   
   An applicable voluntary code of conduct is a code adopted by the FRFE, made publicly available (e.g., on the FRFE’s website) and designed to protect the interests of the FRFE’s customers. CLICK HERE to access examples of voluntary codes of conduct monitored by the FCAC.
   
   An applicable public commitment is a commitment made publicly by the FRFE (e.g., on the FRFE’s website) and designed to protect the interests of the FRFE’s customers. CLICK HERE to access examples of public commitments monitored by the FCAC. 
    
3. Reportable Complaints Reporting Templates – The FCAC has created templates for FRFEs to use when reporting reportable complaints. FRFEs should now send to the FCAC reportable complaints using these new templates. CLICK HERE to access the new templates.
    
4. Reportable Compliance Issues Summary Report - All reportable compliance issues should now be reported by FRFEs to the FCAC using the new reportable compliance issues summary report template. CLICK HERE to access the new reportable compliance issues summary report template.
    
5. New Online Interactive Framework Model – The FCAC has developed an interactive and user-friendly model to provide a high level overview of the New Framework, while giving users the option to obtain more detailed information through the use of links. CLICK HERE to access the interactive model. 

COMMENTARY

From a practical perspective, the New Framework creates two new positive filing obligations for an FRFE. First, an FRFE must now submit to the FCAC quarterly ‘Nil’ Reports when it does not experience a reportable complaint. Second, effective April 1, 2012, an FRFE is required to submit reportable complaints reports in relation to applicable voluntary codes of conduct or public commitments.

It is important to appreciate that nothing in the New Framework replaces or supersedes an FRFE’s existing federal or provincial filing obligations – FRFEs must continue to meet their existing federal and provincial filing obligations.

We understand that on December 8, 2011, the FCAC will be holding two information sessions in Toronto regarding the New Framework. We will attend these sessions and expect to provide an update on any new developments in relation to the New Framework.