Spot Checks, an integral part of the Registered Insurance Brokers of Ontario (RIBO) and our public protection mandate, involve a review of brokerage operations and financial records for compliance.
During a Spot Check, RIBO’s auditors assess brokerage practices, procedures, policies and operations and provide guidance to resolve minor deficiencies. We work with brokerages to help improve their processes and practices to meet their regulatory requirements. Auditors also meet with Principal Brokers.
Most Spot Check files are closed with a letter to the Principal Broker indicating the outcome and any recommendations.
In some cases, Spot Checks may be referred to the Investigations Department. Escalations are made based on complexity, issue severity, risk criteria, and analysis of the audit facts.
RIBO regularly reviews and assesses our activities to find more ways to educate and keep licensees informed about their regulatory obligations. This includes publishing bulletin stories, resources, tools and guidance for Principal Brokers and other licensees on a variety of topics. Some examples include the fair treatment of customers, mandatory disclosure, common Position Report errors, and more.
Below is a summary showing the results of the 60 completed Spot Checks for the 2024-2025 fiscal year.
The findings reveal a mixed picture compared to those of the 2023-2024 fiscal year. While there has been meaningful overall improvement in compliance with disclosure and Take-All-Comers requirements, our auditors identified more issues of significant regulatory concern that have been referred for fulsome investigations.
In 95% of audited brokerages, auditors offered guidance and recommendations on minor practice enhancements to support continuous improvement. In 15% of cases, significant regulatory concerns were found.
Most brokerages (68%) received guidance on improving their financial reporting and practices. This represents a decrease from the 2023-2024 Spot Check results when 75% of brokerages were found to have not complied with financial requirements.
The following is a list of issues discovered in RIBO’s 2024-2025 Spot Checks:
Given the above results, RIBO is taking active steps to better support brokerages in meeting their financial reporting requirements. Steps that have been recently taken and are underway that aim to influence future results in this area include:
Most brokerages (75%) were compliant with disclosure requirements and contained written documentation of disclosure to the client in client files. This represents an increase in compliance from the 2023-2024 Spot Check results, when more than half (57%) of brokerages did not have proper written disclosure record keeping.
In 2024-2025, auditors found that some brokerages did not provide summary quotation sheets, conflicts of interest, and commission disclosure letters to clients. Copies were also not included in client files.
Auditors reiterated to brokerages the importance of maintaining records showing that disclosure was provided to each client. This allows brokerages to demonstrate compliance with disclosure obligations and gives an opportunity to provide supporting documents, should there be complaints against them or Errors and Omissions insurance claims.
Non-compliance with timing of disclosure requirements dropped to 18% among reviewed cases, which was down from 29% in the 2023-2024 Spot Check cycle.
Specifically, a few brokerages provided disclosure to clients at or before the point of sale instead of at the time of quotation in accordance with guidance issued in April 2024.
In some cases, client files did not include the following:
Spot Checks revealed that 31% of the brokerage cases reviewed do not have processes for monitoring or maintaining up-to-date records of CE hours of its licensee employees. Of the cases reviewed, recorded CE hours did not align with CE certificates.
Spot Checks identified that 11% of brokerages do not have written office policies and procedural manuals on how to conduct business transactions.
Of the 60 Spot Checks conducted, nine files were referred to the Investigations Department where auditors identified significant regulatory concerns. This represents 15% of the total Spot Checks completed.
Some of the issues identified include: