Feb. 25, 2026 — Canada’s insurance regulators said in a recent report that many insurers do not have strong enough controls over how their products are sold and are calling on the industry to tighten its supervision of distribution channels.

The Canadian Council of Insurance Regulators released its ‘Consolidated Observations, Recommendations and Good Practices Report’ following a national review of insurers’ monitoring and supervision of their distribution networks.

The regulators said they found that weaknesses were most common in independent distribution channels and were often linked to how insurers selected, trained and supervised distributors and individual representatives.

“The work carried out in connection with the co-operative review showed that most of the issues identified were due to a lack of insurers’ robust monitoring and supervision of independent distribution channels,” the CCIR said.

The review assessed 19 insurers selected based on size, complexity and business mix.

Participating insurers were required to submit action plans after receiving confidential supervisory findings from their regulators.

The CCIR said many insurers had some processes for selecting distributors and representatives, but these were often informal, poorly documented or focused mainly on sales volume rather than on fair treatment of customers. In some cases, insurers could not demonstrate that people selling their products had the knowledge and ability to treat customers fairly.

The regulators also found that while boards were generally involved in overseeing compensation and incentive structures, some insurers still needed clearer governance over how incentives affect customer outcomes.

The council said several insurers had conflict-of-interest policies in place but had not clearly communicated their expectations to independent distributors or put in place controls to confirm those expectations were being followed.

Training was also uneven.

Some insurers had not developed formal training on fair treatment of customers, while others did not have controls to ensure distributors’ training programs were adequate.

The CCIR said that with independent channels in particular, insurers frequently lacked formal processes to verify that corrective actions recommended to distributors or representatives had actually been implemented.

The Insurance Bureau of Canada said insurers remain committed to the fair treatment of customers and to supporting brokers and other intermediaries.

In an email to Thompson’s, the IBC said the CCIR’s report reflects the industry’s shared focus on consumer protection across the insurance lifecycle.

“As licensed and regulated professionals, brokers are uniquely positioned to understand their clients’ needs, identify insurable risks, and recommend appropriate coverage solutions,” the bureau said.

“Insurers continue to invest in and support their intermediary partners, reinforcing their role as trusted advisers and helping to ensure that Canadians receive clear, appropriate and fair insurance outcomes.”

Regulators said they will continue working with insurers on remediation plans and will monitor distribution practices through annual market conduct reporting, with a particular focus on independent channels.

“Our objective is to share the observations, recommendations and good practices derived from the reviews conducted by CCIR members across Canada,” said Patrick Déry, CCIR chair and superintendent of financial institutions at Quebec’s Autorité des marchés financiers.

“This report will help insurers identify potential areas for improvement and thereby determine if measures need to be taken.”

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