Fortuity - Canadian Insurance News and Trends - January 2026

The regulation of incidental insurance sales in Canada has been inconsistent and has been identified as problematic by the Canadian Council of Insurance Regulators (CCIR) and "CISRO" for decades. In 2007, the CCIR struck a working group to consult the industry and provided a paper in 2008 with recommendations on how to regulate these sales. 

An incidental seller of insurance is generally defined as a person who, in pursuing activities in a field other than insurance, offers, as an accessory, for an insurer, an insurance product which relates solely to goods sold or services offered by the person or secures a client’s enrollment in respect of such an insurance product. Typical examples of incidental insurance sellers include travel agents (travel, trip cancellation, and extended medical insurance), mortgage brokers (mortgage and creditor insurance), retailers (extended warranty or product warranty insurance), automobile dealers (warranty repair insurance), and funeral homes (prepaid funeral expense insurance). 

The concerns that have been raised by regulators in 2008 and other industry participants on an ongoing basis are generally:

• consumers are not provided with adequate explanation of the exclusions, restrictions and limitations of the insurance products sold at the point of sale,
• there is no disclosure of potential conflicts of interest for the incidental sellers to consumers (i.e. disclosure of commission paid for selling the policy offered);
• there is a lack of clarity as to whether incidental sales are regulated by general prohibitions against the unlicenced sale of insurance, or are unregulated entire, or if there are regulations that are not being enforced against incidental sellers; and
• it is unfair to licenced agents and agencies who comply with strict licencing regimes if incidental insurance is able to be sold by unlicenced and untrained salespeople without consequence.

In the 2008 Incidental Sales Paper, the CCIR and CISRO put forward the following recommendations to more effective regulate incidental insurance sales:

• application forms and other documents should be improved to alert consumers to the criteria for lack of eligibility, to highlight exclusions in coverage, and to use plain language to enhance understanding;
• training and supervision of sellers of incidental insurance should be improved so that sellers understand and can explain the insurance product, the exclusions, limitations and restrictions, as well as the application and claims process;
• consumers should have the ability to consider the appropriateness of the insurance to their needs, whether by being offered a choice from multiple products or provided with a cooling-off period; and,
• consumer complaints information should be better tracked.

Since 2008, provinces have increasingly established restricted licencing regimes to regulate some incidental sales of insurance, notably in Alberta, Saskatchewan, Manitoba and New Brunswick. However, there is still a significant lack of clarity as to whether incidental sales are subject to the general prohibition on the sale of insurance without a licence or if they are not subject to regulatory oversight. 

BC has a limited current regime of incidental insurance regulation by way of the Insurance Licencing Exemptions Regulation, which exempts certain incidental insurance sellers and products from the general requirement to obtain licencing as an insurance agent or agency prior to the sale of such products. However, since 2019, BC has been working to develop a fulsome regime of incidental insurance regulation.

On January 15, 2026, the Insurance Council of BC published an article highlighting the newly released Restricted Insurance Agent Licence Regulation (the “RIA Regulation”) and gave details as to the process of implementation of the RIA Regulation and development of the Restricted Insurance Agent Licence (RIA Licence) regime.

Presently, the BC government has confirmed the eligible business and insurance products that will be regulated, and has advised that the RIA Regulation will come into force and RIA Licences will be required as of January 1, 2027, for:

• Construction equipment dealers selling credit protection insurance, construction equipment warranty insurance, and guaranteed asset protection insurance;
• Credit grantors for credit protection insurance;
• Custom brokers, freight forwarders, and transportation companies for cargo insurance;
• Deposit-taking institutions, credit grantors, extra-provincial trust companies, and mortgage brokers for credit protection insurance;
• Farm implement dealerships for credit protection insurance, farm implement warranty insurance, guaranteed asset protection insurance;
• Funeral providers for funeral services insurance;
• Motor-vehicle and pleasure craft dealers for credit protection insurance, guaranteed asset protection insurance, and vehicle or craft warranty insurance;
• Peer-to-peer vehicle service providers for rented vehicle insurance; and
• Portable electronic vendors for portable electronic insurance.

The BC government has confirmed that the licencing will be at the business level - the businesses listed above that sell these insurance products will need to be licenced as opposed to the individual salespeople.

The BC government has tasked the Insurance Council of BC with issuance and oversight of the new RIA Licence, but the program is still in development and will require a "legislative rule-making process" prior to implementation. The Insurance Council of BC anticipates that it will be in a position to begin accepting applications in November 2026.

As of now and pending further development over the next 10 months, the proposed RIA Licence regime includes requirements for businesses to:

• have a licence and renew their licence annually;
• have a "Designated Representative" with control over the business (an officer, direct, partner or sole proprietor) to be responsible for regulatory compliance and oversight of insurance activities and must notify the Insurance Council if they cease to have one;
• ensure completion of an accredited course by sales representatives who will be selling insurance on behalf of the agency;
• meet disclosure requirements for insurance transactions (which include a number of consumer protection-oriented written disclosures at the point of sale);
• ·obtain and maintain Errors and Omissions insurance; and
• have a current contract with an insurer authorized in BC.

For further information on sales of incidental insurance contact Katrina Edgerton-McGhan.