Insurance Blogs hosted by Canadian Underwriter
Insurance Blogs hosted by Canadian Underwriter
The Ontario Divisional Court has ruled that Ontario laws cannot be used to determine whether a specific vehicle needs to be insured, when an incident happens outside Ontario. Why is this Important? Automobile insurance is meant to insure automobiles and…
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FSCO’s latest quarterly rate approval numbers have been released and at least rates are holding steady for now. However, considering the statutory accident benefit cuts that became effective on June 1, 2016, consumers are getting less coverage but payi…
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A FSCO arbitrator has confirmed that the first insurer that receives a completed application for accident benefits is required to adjust and pay the claim, even if the insurer is taking an off-coverage position. Overview In Cankaya v. Intact /…
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FSCO’s latest quarterly rate approval numbers have been released and suggest that consumers will see very few savings the statutory accident benefit cuts that became effective on June 1.FSCO approved 14 private passenger automobile insurance rate filin…
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After months of uber anticipation, FSCO has approved a new fleet auto policy, from Intact, for private passenger vehicles engaged in UberX activities. The announcement comes days after Intact launched a similar product in Alberta. Background UberX is a Web-based…
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This week, the Ontario amended Regulation 664 to expand the definition of a fleet to accommodate ride-sharing services like Uber. The change opens the door for insurers to offer policies to drivers of vehicles for hire using an online app.
The regulation amendment expands the fleet definition to include vehicles available for hire through a common online-enabled application or system for the pre-arrangement of transportation. The vehicle owner or lessee is to be named insured under an auto insurance contract. The regulation change will make it easier for Ontario businesses to insure a group of privately owned vehicles under one insurance policy as a “fleet” when they are available for hire using an online app.
FSCO has already approved a fleet policy proposed by Intact Insurance Company. The Intact policy provides blanket fleet coverage under a standard automobile owner’s policy (OAP 1) for private passenger automobiles used in the transportation of paying passengers who utilize Uber.
The Intact fleet policy does not provide coverage when the driver is not logged onto the Uber online app. Coverage under the personal owner’s policy for the automobile is applicable.
FSCO also approved the use of an electronic insurance card for use in connection with ride sharing. The electronic insurance card will permit ride share drivers who are covered under the Intact policy the option to provide evidence of insurance electronically using an online-enabled app (e.g., to law enforcement officials).
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The Ontario government should establish a new organization that would perform the functions currently performed by the Financial Services Commission of Ontario (FSCO) and the Deposit Insurance Corporation of Ontario (DICO), an expert advisory panel said in a report released Monday.
The panel recommends that a new Financial Services Regulatory Authority (FSRA) be established, and it should exercise both prudential and market conduct functions. The panel – comprised of George Cooke, James Daw and Lawrence Ritchie – made its recommendation to create FSRA in an interim report released in November, 2015. The final report, dated March 31, was made public Monday and contains 44 recommendations.
The mandate review was partly made necessary with the transfer of responsibility for operating an auto insurance dispute resolution system from FSCO to Ministry of the Attorney General’s Licence Appeal Tribunal on April 1, 2016.
Governance
The report suggests that FSRA should consolidate functions, but it should have separate divisions for the regulation of market conduct; prudential oversight; and pension administration. These divisions of the regulator should operate in a coordinated manner, but each division should be insulated from the routine regulatory activities, pressures and resource demands of other divisions.
FSRA should be a self-funded corporation without share capital, operationally independent of government, yet accountable to the Legislature through the Minister of Finance. The FSRA should be outside of the Ontario Public Service and be empowered to hire its personnel from outside of the Ontario Public Service’s collective agreements, compensation restraints, and other hiring restraints to support its ability to recruit professionals and industry expertise as it deems necessary.
FSRA should have a skills-based Board of Directors appointed by the Lieutenant Governor in Council. The Board would oversee FSRA’s operations and the Board should have the authority to appoint a Chief Executive Officer (CEO). The Board Chair should report directly to the Minister of Finance.
FSRA’s Board should be given authority to make rules that would be enforceable pursuant to the statute, having a similar authority as Cabinet Regulations.
Auto Insurance Rate Regulation
The panel did not make any recommendations with respect to the prior approval of auto insurance. However, it did recommend that FSRA’s Board should be obliged and empowered to decide how auto insurance rates are to be regulated and make use of its rule-making authority to scope out a rate approval process.
The view of the panel is that when it comes to the regulation of automobile insurance rates, FSCO is not ultimately protecting the public interest or enhancing confidence in the sector.
Motor Vehicle Accident Claims Fund
The panel recommends that responsibility for operating the Motor Vehicle Accident Claims Fund (MVACF) be transferred to the Facility Association (FA), a non-profit organization funded by automobile insurers in the provinces and territories that operate private insurance systems. This responsibility would fit well with the FA’s original purpose, which is to act as the ‘insurer of last resort’ for high-risk drivers. The FA already operates uninsured motorist funds similar to the MVACF in the Atlantic Provinces.
Fraud Prevention
The panel indicated that the new mandate should require FSRA to utilize its statutory authorities to adequately, firmly and consistently discourage fraudulent activities or behaviours that mislead or harm consumers and pension plan beneficiaries.
FSRA should be directed to identify and seek to eliminate gaps in protection for consumers who might be defrauded by licensed sales agents, brokers and corporations. FSRA should also have the authority to establish a fraud compensation fund such as exists in Quebec if or where enhancements to mandatory insurance coverage would not fully close current gaps.
There is no word from the government on implementing the panel’s recommendations.
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FSCO’s latest quarterly rate approval numbers have been released and suggest that some savings have been accrued from the statutory accident benefit cuts that become effective on June 1.FSCO approved 50 private passenger automobile insurance rate filin…
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The Licence Appeal Tribunal (LAT) begins accepting applications to resolve auto insurance disputes on April 1, 2016. LAT has completed a first round of recruitment for adjudicators and case management staff. Adjudicators are Order-in-Counci…
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The Financial Services Commission of Ontario has approved Aviva’s plans to offer a product for ride-sharing services like uberX. Aviva’s coverage will be available for drivers licensed for at least six years. Drivers can spend up to 20 hours a…
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The promise to reduce auto insurance premiums by 15% is a failure. In August 2013 the Ontario government announced a two-year rate reduction strategy. What has ensued since that announcement has been a series of reforms to bring down the cost of …
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My recent article in the January 2016 K-W OIAA Bulletin As we look forward to a new year of insurance law excitement, let us reflect on some of the interesting cases and legal developments that impacted the auto insurance industry…
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The Ministry of Finance has posted proposed changes to Insurance Act regulations to provide for the transition the Automobile Insurance Dispute Resolution System from the Financial Services Commission of Ontario (FSCO) to the Ministry of the Attorney General’s Licence Appeal Tribunal (LAT), and the wind down of disputes filed at FSCO.
Proposed amendments include:
• The last date for submitting applications for mediation, neutral evaluation, or the appointment of an arbitrator to FSCO will be March 31, 2016.
• An application for an appeal to the FSCO Director of Arbitrations will only be accepted where the application for the appointment of an arbitrator was received by March 31, 2016.
• As well, an applications for a variation or revocation to the FSCO Director of Arbitrations will only be accepted where the application for the appointment of an arbitrator was received by March 31, 2016.
• The Office of the Director of Arbitrations will continue to function until all notices of appeal and all applications for variation or revocation have been finally determined.
• Statutory Accident Benefits Schedule (SABS) provisions that apply to the dispute resolution process at FSCO will continue to apply, as they read on March 31, 2016, to all applications that were received by FSCO before the transition date but are not finally determined before that date. The SABS will also be amended, where necessary, to apply to applications filed at the LAT on or after April 1, 2016.
A November 30, 2015 Law Times article titled “Arbitrator orders rare special award against insurer” reports on an unusual FSCO case between Thomas Waldock and his auto insurer. The case not only highlights the constant risks associated with relying on insurer…
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