Provincial insurance legislation requires licensed agents and insurers to have a documented complaint handling procedure. The standard procedure follows a sequential escalation path:
- Agent-level resolution: The client raises a concern directly with the agent. The agent must acknowledge the complaint promptly, investigate, and respond in writing with a position.
- Internal escalation at the insurer: If the agent-level response does not resolve the matter, the client may escalate to the insurer's internal complaint officer or ombudsperson. The insurer must respond in writing with a final position.
- OLHI: Once the client has received a Final Position Letter from the insurer, the client may submit the complaint to the OmbudService for Life and Health Insurance (OLHI). OLHI is independent of the insurance industry and provides non-binding review and settlement recommendations at no cost to the consumer. OLHI does not have the power to order an insurer to pay; its recommendations are non-binding, but most insurers follow them.
- Provincial regulator: A client may also file a market-conduct complaint against the agent or insurer with the provincial regulator (such as FSRA in Ontario) at any stage. The regulator has enforcement powers and can suspend or cancel licences, impose fines, and refer matters for prosecution.
- Courts: Civil litigation remains available at any stage.
Agents must inform clients of the complaint escalation path. Agents must not obstruct or discourage a client from using any of these channels.
Common mistake: conflating OLHI's role with a regulator's role. OLHI provides non-binding dispute resolution for consumers; it does not discipline agents or cancel licences. The provincial regulator does.
Recall: Describe the complaint escalation path from agent-level to OLHI. What is the difference between OLHI and the provincial regulator's role in a complaint?