CAFII held a 1 December, 2022 webinar with Blair Morrison, CEO of the British Columbia Financial Services Authority.
Mr. Morrison said that as a relatively new organization launched three years ago, BCFSA has undergone a significant journey since 2019. The Financial Institutions Commission of British Columbia, FICOM, was the predecessor to BCFSA. The Minister of Finance wanted the new regulatory authority to be “modern, effective, and efficient.”
BCFSA is an integrated financial services regulator that needed to make changes from the way that FICOM had operated. In particular, BCFSA has emphasized the importance of dialogue with the industry, and it views conversation and consultation as critical to its mandate. As an integrated regulator, it is responsible for credit unions, insurance companies, real estate companies, trust companies, pensions, mortgage brokers, real estate licensees, and deposit-taking institutions.
Mr. Morrison said that there is a Superintendent model at BCFSA where he is ultimately the lead regulator for all the different financial services sectors; but because no one person can manage all those areas, he has many senior people supporting him. However, there is a functional approach as opposed to a siloed approach, so different staff executives cut across the different sectors. This is important because decisions in one area will have an impact in many other areas, so executives need to understand the overall picture. Mr. Morrison also takes a very delegated approach. He said that BCFSA has 350 employees, with a budget of $60 million which comes from fees paid by industry. Employees operate in a hybrid model, working both from home and in the office.
Mr. Morrison said that he is supportive of a principles-based regulatory approach, but there also need to be rules to ensure consumer protection. BCFSA knows that it does not have all the answers, and it believes in communication and dialogue; but there are times when enforcement is required. However, the starting point is the larger principle of what the regulator is trying to achieve.
BCFSA has rule-making authority, and Mr. Morrison said that was necessary to provide it with the types of tools it may need to use for consumer protection. Rule-making authority, however, is part of a very clear and transparent process and does involve consultation with industry. BCFSA also has some emergency powers but they are also subject to a process. In terms of regulatory priorities, BCFSA wants the industry to succeed. It has a three-year roadmap which it has shared with industry.
There is a BCFSA Insurer Code of Market Conduct consultation that is ongoing. Industry has provided a lot of input on this, but there are constraints on what BCFSA can do (or not do) because developing a BC Code is a statutory requirement. Climate change is another major priority for BCFSA. But all those priorities are subject to ongoing discussions with industry — everyone, the regulator and the industry included, has too many jobs and not enough resources, so it is important to work collaboratively to achieve the best outcomes. BCFSA has strong, productive relationships with the BC Ministry of Finance and with the Insurance Council of British Columbia. It also consults with federal bodies such as the Bank of Canada, and it works closely with the Canadian Council of Insurance Regulators (CCIR).
On digitization, Mr. Morrison said that data is incredibly important and regulators will need to use data well to make better decisions. There needs to be more sharing of data, as regulators will need it to understand what is happening in the industry and how best to respond. With digitization, there are always risks of leaks and breaches, and regulators need to keep a close eye on those risks. Regulators will also increasingly need to use regulatory software applications to operate more efficiently.
Mr. Morrison said that he supports regulatory harmonization, but every province may have different priorities or approaches from time to time. When that happens, there will be dialogue with industry and an explanation of why that unique or separate approach is being taken.
Mr. Morrison ended the webinar fireside chat by noting the important role of mental health in the workplace and that supporting employees at BCFSA is a key priority for the organization and for him personally.
There were representatives in attendance at this webinar from the CLHIA and from the Insurance Bureau of Canada, or IBC, and from the following regulator and policy-maker organizations:
the Office of Nova Scotia’s Superintendent of Insurance;
- Quebec’s Autorité des marchés financiers, or the AMF;
- the Financial Services Regulatory Authority of Ontario, or FSRA;
- the Insurance Councils of Saskatchewan;
- Saskatchewan’s Financial and Consumer Affairs Authority, or FCAA;
- the Ministry of Finance, Government of British Columbia;
- the Insurance Council of British Columbia;
- the British Columbia Financial Services Authority, or BCFSA; and
- the Government of the Northwest Territories.