The Financial Services Regulatory Authority of Ontario released a consultation paper regarding its new Innovation Office, which was launched in 2020 in order to facilitate what it has termed “responsible innovation” – i.e. managing risk to consumers and members of certain sectors within its regulatory sphere, including mortgage brokers and financial planners and advisors, while supporting the development of new or improved products, services and business models. It plans to set up a Test and Learn Environment (TLE) to provide innovative companies with access to a method of gauging market responses. The intention for the framework is to identify consumer-focused innovative products and services at an early stage, while looking for early signs of unintended consequences and compliance complications. FSRA has also prepared a draft “intake” form to standardize the information it would seek at a preliminary stage of review.  It is expected that the first TLE will focus on the car insurance sector, given recent changes to the governing insurance rules in that sector. FSRA intends to approach each sector contextually, recognizing that different sectors have different risk appetites and regulatory frameworks. A number of discussion questions are posed throughout the paper, focusing on how the affected sectors can best work with the Innovation Office.

October 29, 2021