Answers to Questions Submitted on
2019-001: Assessments and Fees


Type: Rule
Number: 2019-001
Date: 2019-03-08
Comments Due: 2019-02-25
Sector: All sectors
Status: With Minister for review

Answers

DateSectorQuestionAnswer
2019-02-20 Health Service Provider I am very disappointed that the commission has decided to revert back to status quo fees and will not be providing an exemption or at least a graduated fee structure. eg 1 to 6 patients so much , 7 to 15 so much and full fee structure for 16 plus. I would be interested in seeing the comments that opposed this potential change.

The decision to maintain the status quo fees currently charged by FSCO was in response to comments received on the originally Proposed Fee Rule posted on October 5, 2018. All of the Comments received can be reviewed the FSRA website here and the responses to Questions here. Additionally, the summary of comments received and FSRA responses for all sectors, including HSPs is included in the Notice and Request for Further Comment on Proposed Fee Rule 2019-001, available on FSRA’s website here.

2019-02-20 Health Service Provider I may see no more than 2 or 3 auto claims per year. Charging a fee would be onerous on such a small volume....and this is over and above the costs for obtaining a FSCO billing number?

Beginning in spring 2019, responsibility for the regulation of Health Service Providers (HSPs) who support auto claims will transfer from the Financial Services Commission of Ontario (FSCO) to the newly created Financial Services Regulatory Authority (FSRA). Proposed fees charged by FSRA will replace those charged previously by FSCO.

The fee structure currently proposed by FSRA responds to earlier industry feedback and mirrors the status quo used today by FSCO with no new increases to the fee levels previously charged by FSCO.

  • An annual per location fee of $128 remains unchanged
  • A per claimant fee of $15 remains unchanged.
  • Also unchanged from the status quo is that new applicants will pay a service provider licence application fee of $337.00. New applicants who apply for a service provider licence will also pay a pro-rated per location fee and per claimant fee based on the number of whole and partial calendar months remaining in the fiscal year, as outlined in Section 4.3 Fees (Service Providers) of the Fee Rule.

For additional clarity, existing FSCO licence holders will not have to pay a licence application fee to obtain a new licence from FSRA.

2018-12-21 Health Service Provider The ORA strongly supports the philosophy underlying the proposed exemption of HSPs with few claimants annually. Namely, the retention and recruitment of licensed providers serving smaller more remote communities. However, we are surprised by the larger than anticipated size of the proposed group of HSPs with 6 or fewer claimants annually, the impact on the regulator’s fee revenues and the corresponding impact of increased fees for non-exempted HSPs. We would like to know more about the composition of the proposed exempted group to better inform our position on exemption, namely:

• The geographic distribution of exempted HSPs
• The breakdown of treating vs IE providers in this group

FSRA’s proposed fee rule for HSPs indicated that providers with 6 or fewer Statutory Accident Benefits Schedule (SABS) claimants will be exempt from paying an annual fee. Below we provide some data on the composition of the proposed exempted group in terms of geographic distribution and Treatment versus Insurer Examination (IE) providers.

Figures are provided based on the data used for the 2017 service providers’ Annual Information Return (AIR) results summary report, which includes AIR responses for 4,366 service providers who were licensed at December 31, 2017 and had filed by August 7, 2018. All data is self-reported by licensees.

Of the 4,366 service providers, 1,668 service providers or 38% reported zero to six (0-6) SABS claimants. 1,422 or approximately one-third reported one to six (1-6) SABS claimants.

When considering the geographical composition of exempt HSPS:

  • Among HSPs with 0 – 6 SABS Claimants, the majority of exempt HSPs are geographically located in the City of Toronto (22%), Suburban Toronto (20%), and Central Ontario (24%).
  • Similarly, among HSPs with 1-6 SABS Claimants, the majority of exempt HSPs are geographically located in the City of Toronto (21%), Suburban Toronto (19%), and Central Ontario (25%).

Within each region, the percentage of HSPs that are exempt varies:

  • For those HSPs with 0 – 6 SABS Claimants, percentages of exempt HSPs range from a low of 36% (Suburban Toronto) to a high of 44% (Northern Ontario).
  • For those HSPs with 1-6 SABS Claimants, percentages of exempt HSPs range from 29% (Suburban Toronto) to 37% (Central Ontario).

When considering service type composition within this group of exempt HSPs:

  • Among those HSPs with 0 – 6 SABS Claimants, 71% provide Treatment only, while 22% provide Treatment and IE.
  • Similarly, among those HSPs with 1 – 6 SABS Claimants, 71% provide Treatment only, while 24% provide Treatment and IE.

FSRA Full Response

2018-12-20 Insurance Proposed FSRA Rule 2019-001 highlights at p. 3, 5. Future Focus, that FSRA is proposing NOT to do a reconciliation between budgeted and actual expenses (implement a refund/credit mechanism) for the go forward.

Am I to understand FSRA Rule 2019-001B (interim) will continue the practice of reconciliation between budgeted and actual expenses in the short term?

That is correct. With the proposed FSRA Rule 2019-001, FSRA is NOT planning to do a reconciliation between budgeted and actual expenses.

The interim rule (FSRA Rule 2019-001B) will continue the practice of reconciliation between budgeted and actual expenses in the short term. Per the Interim Fee Rule:

  • “As part of the transition of FSCO’s and DICO’s regulatory mandate to FSRA, FSRA developed an initial fee rule to obtain funding from the financial services sectors it regulates” (2019-001B, p.1). This new fee rule is described in proposed FSRA Rule 2019-001 – Assessments and Fees (the Proposed Fee Rule).
  • “If the Proposed Fee Rule cannot be adopted prior to the spring 2019 launch date, FSRA expects it will adopt an Interim Fee Rule, on a transitional basis, which is substantially similar to FSCO’s existing assessment regulations and fee schedules” (2019-001B, p.1).
  • The Interim Fee Rule is based on “…assessment provisions established by regulation under the FSCO Act (Ontario Regulation 11/01, Assessment of Expenses and Expenditures (Ontario Regulation 11/01)). The assessment provisions under this regulation involve an annual reconciliation of invoiced amounts versus actual costs incurred by FSCO” (2019-001B, p.2).
  • “The Interim Fee Rule takes substantially the same assessment approach as the approach currently used by FSCO, but differs from the approach currently used by DICO. More detail with respect to the Interim Fee Rule, and a comparison of the fee and assessment changes from FSCO’s and DICO’s approach, is set out...” elsewhere in the Interim Fee Rule (2019-001B, p.2).
2018-11-01 Mortgage brokerage Is the continuing education requirements also being considered for change, i.e. follows the current fee structure or every 2 years?

This is outside the scope of the Fee Rule.

2018-11-01 Mortgage brokerage The current License Link system has a pre-paid component for payment, will a new system also take this into consideration?

This is outside the scope of the Fee Rule. No changes are planned for the License Link system prior to FSRA transition. Longer term, FSRA plans to engage with stakeholders to inform before making any changes.

2018-11-01 Mortgage brokerage Can we get more information on the timing? For example , current charges and licenses are good until March 31st, 2020. The timing of the introduced changes will impact accrual principals that will require adjustment and planned for in advance of changes. (i.e. the beginning of a fiscal year would lead us to believe this change would likely take effect January 2020 based on known timing, and if so, would there be a credit taken off the annual fee's for the 3 months (Jan,Feb,Mar 2020) that were paid for as part of existing FSCO process?)

FSRA is working closely with FSCO and DICO to ensure a smooth transition, including administrative and billing procedures. Once the proposed FSRA fee rule is approved, we will communicate the timing and approach to current and future invoices, licences and adjustments in advance of implementation. Until that time, there are no changes to existing billing and licensing processes with the current regulator.

2018-11-01 Mortgage brokerage Can FSRA elaborate on the "systems transition". Will FSRA leverage components of the current FSCO Licensing Link system or will this be an entirely new platform? If it is new, how early will information be provided to a Brokerage to ensure we are well training in advance of implementation? Will Brokerages have an opportunity to provide feedback and/or suggestions prior to systems selection by FSRA? (for example, aspects of the current License Link system provide little data and basic reporting components for a Brokerage).

This is outside the scope of the Fee Rule. No changes are planned for the License Link system prior to FSRA transition. Longer term, FSRA plans to engage with stakeholders to inform before making any changes.

2018-11-06 Mortgage brokerage Pay $200 every time we fill out an investor disclosure form? Do I understand that right?

The draft fee rule states:

The fee payable pursuant to subsection 6.3(3) shall be paid within 5 days following the date on which any prescribed disclosure documentation was first provided by or on behalf of the brokerage to the first potential or actual lender or investor in a non-qualified syndicated mortgage and shall be accompanied by a copy of the syndicated mortgage disclosure form provided to such first potential or actual lender or investor in respect of that non-qualified syndicated mortgage.

Based on this, the intention is that the fee is not payable in respect of each subsequent potential or actual lender or investor in such non-qualified syndicated mortgage and to whom such same syndicated mortgage disclosure form is also provided.

2018-11-01 Health Service Provider The rationale provided for the increased payments is to compensate for decreased revenues from HSPs with 6 or fewer claimants. Can FSRA/FSCO provide data on the number of currently licensed HSPs that fall into this category?

Based on data from the 2017 Annual Information Returns filed by 4,351 HSPs, 38% of HSPs reported 6 or fewer SABS claimants. 2% of the 203,439 SABS claimants came from HSPs that reported 6 or fewer SABS claimants.

2018-10-18 Health Service Provider Please clarify if the following is correct:

1. All new applicants pay a Service Provider License application Fee of $337.00, as is currently in place.

2a). New applicants with HSPs with 7 or greater number of claimants annually pay a pro-rated regulatory fee for work during a partial first year (this consists of facility fee and claimant fee) of $155 x number of locations + $16 per claimant; this is an increase from the current fees of $128/location + $15 per claimant.

2b). New applicant HSPs with 6 or fewer claimants pay no additional location / per claimant fee.

3a). Existing license holders with 7 or great number of claimant annually pay an annual fee of $155 x number of locations + $16 per claimant; this is an increase from the current fees of $128/location + $15 per claimant.

3b). Existing license holder with 6 or fewer claimants pay no additional location / per claimant fee.

1. All new applicants pay a Service Provider License application Fee of $337.00, as is currently in place.

Response: This is correct. New applicants will pay a service provider licence application fee of $337.00. For additional clarity, this fee does not change based on the number of claimants, nor is there a pro-rated calculation depending on when the application is made.

2a). New applicants with HSPs with 7 or greater number of claimants annually pay a pro-rated regulatory fee for work during a partial first year (this consists of facility fee and claimant fee) of $155 x number of locations + $16 per claimant; this is an increase from the current fees of $128/location + $15 per claimant.

Response: This is correct. The proposed fee rules increase the location fee from $128/location to $155/location and increase the per claimant fee from $15 to $16. See below for an example.

Example A: An applicant who applies for a service provider’s licence on June 1, and has one (1) location and nine (9) claimants would pay an applicant’s regulatory fee using the following formula:

(A + B) x (X/12)

in which,

“A” is $155.00 multiplied by the number of locations of the applicant, “B” is $16.00 multiplied by the number of claimants of the applicant, if any, and “X” is the number of whole and partial calendar months remaining in the fiscal year, calculated from the date application is made until March 31st.

Under the above scenario, this would result in an applicant’s regulatory fee of $249.17.

(($155.00*1) + ($16.00*9)) x (10/12) = $249.17

For clarity, this is in addition to the service provider license application fee of $337.00.

2b). New applicant HSPs with 6 or fewer claimants pay no additional location / per claimant fee.

Response: This is correct. New applicants with 6 or fewer claimants pay $0 New Applicant’s Regulatory Fee.

For additional clarity it should be noted that the Service Provider Licence Application Fee ($337.00) still applies to all new applicants, regardless or the number of claimants.

3a). Existing license holders with 7 or great number of claimant annually pay an annual fee of $155 x number of locations + $16 per claimant; this is an increase from the current fees of $128/location + $15 per claimant.

Response: This is correct. The proposed fee rules increase the location fee from $128/location to $155/location and increase the per claimant fee from $15 to $16. See below for an example:

Example B: An existing licence holder with two (2) locations and 100 claimants would pay Licensees’ Annual Regulatory Fee using the following formula:

A + B

in which,

“A” is $155.00 multiplied by the number of locations of the licensee, and “B” is $16.00 multiplied by the number of claimants of the licensee.


Under the above scenario, this would result in a Licensees’ Annual Regulatory Fee of $1,910.00.

($155.00*2) + ($16.00*100) = $1,910.00

3b). Existing license holder with 6 or fewer claimants pay no additional location / per claimant fee.

Response: This is correct.