Summary of Stakeholder Comments – Automobile Insurance Rating and Underwriting Guidance | Financial Services Regulatory Authority of Ontario

Purpose of consultation:

The Automobile Insurance Rating and Underwriting Guidance (the Guidance) aims to:

Establish a principles-based, outcomes-focused and risk-based approach to rating and underwriting regulation to promote fair rates and underwriting for consumers. It aligns FSRA’s regulatory approach with FSRA’s statutory objects, vision and mission.
Enable dynamic and flexible oversight that focuses on fair rates and underwriting practices, informed decision-making for consumers, and the promotion of market health with effective regulation.

Outcome of consultation:

The following table summarizes the key changes that have been reflected in the final version of the Guidance:

Type of change	Summary of changes (non-exhaustive)
Accreditation	Changes throughout the Guidance to focus the scope of accreditation on the delivery of the Fair Consumer Outcomes and the specific Control and Oversight characteristics required to achieve the Fair Consumer Outcomes. Removing the reference to insurer participation in FSRA Test and Learn Environments and transparency initiatives from the Accreditation section in the ‘Accreditation, Assessment Approach and Ongoing Supervision’ chapter. Deleting the Figure A diagram that outlined the accreditation processes in the beginning of the ‘Accreditation, Assessment Approach and Ongoing Supervision’ chapter. Clarifying in the ‘Approach to Assessing Fair Consumer Outcomes’ section in the new Chapter 2 that FSRA will assess Fair Consumer Outcomes as part of the accreditation application process for insurers pursuing accreditation. For unaccredited insurers not pursing accreditation, Fair Consumer Outcomes will be assessed as part of the Prior Approval filing process. Clarifying in the ‘Approach to Assessing Sound Controls and Oversight Characteristics for Accreditation’ section that FSRA will accept established Controls and Oversight policies and procedures, whether enterprise-wide or Ontario specific, that meet the requirements of the Guidance.
Ongoing Supervision	Changes throughout the Guidance to clarify FSRA’s scope and intention and to focus Ongoing Supervision on the delivery of Fair Consumer Outcomes and the specific Controls and Oversight characteristics needed to achieve them. Including language that outlines the objectives of FSRA’s Supervision at the beginning of the ‘Ongoing Supervision for all Insurers’ section in the new Chapter 2. Clarifying that FSRA will aim to reduce duplication in data collection by accepting documentation produced for other regulators provided they meet the requirements of the Guidance and Filing Manual within the ‘Ongoing Supervision for all Insurers’ section in the new Chapter 2. Removing the list of major or material circumstances requiring reassessment of accreditation status from the previous ‘Post-Accreditation’ section. Clarifying that all insurers will be supervised against the delivery of the Fair Consumer Outcomes. Providing greater clarity on the sort of data (e.g. loss trend rates, loss development and underwriting results, pricing committee records, data on cost saving and efficiency efforts and rate level indications) that will be required as part of supervision under the ‘Ongoing Supervision for all Insurers’ and ‘Approach to Assessing Fair Consumer Outcomes’ sections of the new Chapter 2.
Clarity	Changes throughout to improve clarity and accuracy. Clarifying that the approval of non-standard forms falls within the scope of the Guidance and FSRA will assess non-standard forms for consistency against the Fair Consumer Outcomes. Replacing “Operations, Controls and Governance” with “Controls and Oversight” to more accurately reflect the scope of FSRA’s focus on rating and underwriting practices. Clarifying within the ‘Approach to Assessing Fair Consumer Outcomes Profitability’ table that insurers may be asked to provide evidence that key actuarial assumptions used in the past - including but not limited to loss trend rates, loss development and underwriting results - are reviewed against actual observed results and validated for reasonableness against FSRA's benchmarks.
Style and restructuring	Stylistic and structural changes with a view to improving readability and aligning with FSRA-wide language, including consolidating the previous Operations, Controls and Governance chapter into the current Accreditation, Assessment Approach and Ongoing Supervision chapter. Integrating the specific Controls and Oversight requirements necessary for accreditation into the sound ‘Controls and Oversight Assessment Approach’ table in the new Chapter 2. Relocating remaining Controls and Oversight requirements into the appendix as standard practices. Simplifying the titles of the Fair Consumer Outcomes in Chapter 1. Integrating elements from the previous ‘Post-Accreditation’ section in the new ‘Supervision for Accredited Insurers’ section in the new Chapter 2. Changes to the ‘Scope’ section in Chapter 1: Fair Consumer Outcomes to consolidate all parties affected by the Guidance under one list.

Feedback from the sector:

FSRA received 19 written submissions and 3 comments on the Guidance during the consultation periods, which occurred between September 16, 2024, and November 15, 2024, and between January 10, 2025 and February 10, 2025. The submissions and comments are available on FSRA's website.

FSRA thanks all those who have commented or provided a written submission. FSRA carefully considered all stakeholder input before finalizing and issuing the Guidance.

Contributors:

Written submissions were provided by 16 stakeholders:

Definity Insurance (Ryan Stein)
Canadian Automobile Dealers Association – CADA (Huw Williams)
CarRx – (Brent Ravelle)
Aviva - (Karin Ots)
Université Laval - (Oliver Côté)
Ontario Rehab Alliance - (Laurie Davis)
Ontario Mutal Insurance Association – OMIA (John Taylor)
Ontario Trial Lawyers Association – OTLA (Matt Di Maio)
Insurance Bureau of Canada – IBC (Amanda Dean)
Travelers Canada - (Sarah Fong)
Ontario Psychological Association - (Ralph Palumbo)
Canadian Association of Direct Relationship Insurers – CADRI (Catherine Allman)
Canadian Vehicle Manufacturers’ Association – CVMA (Jennifer Steeves)
Fair Association of Victims for Accident Insurance Reform - FAIR
Global Automakers of Canada – (David Adams)
Facility Association – FA (Philippe Gosselin)

Feedback summary and FSRA’s responses for public posting on FSRA’s website:

Theme	Stakeholers	Proposed summarized comment for public facing table	Proposed public FSRA’s response
Fair Consumer Outcomes	Definity Travelers Insurance Bureau of Canada (IBC) CADRI Université Laval Aviva	General comments One stakeholder recommended revising: “Pricing actuaries explain any deviations of business decisions from actuarial indications and model outputs” to include “significant deviations.” Fairness It was noted that FSRA’s inclusion of Fair Consumer Outcomes in the Auto Insurance Rating and Underwriting Supervision Guidance may introduce significant uncertainty in the insurance industry and is unnecessary given existing guidance on the fair treatment of consumers. Some stakeholders or one stakeholder sought further clarity respecting the Fair Consumer Outcomes, including their order of priority, mutual compatibility and exhaustiveness. Some stakeholders sought further clarity on how fairness will be assessed and what sort of data can be used for that purpose. One stakeholder recommended removing: “Rating and underwriting decisions, if applied across the sector would not unfairly impact the ability of consumers to access critical automobile insurance coverages” given that the other fairness outcomes reference protected grounds respecting human rights. Stakeholders recommended that FSRA ensure that insurers price, deliver and service products fairly and are transparent with respect to underwriting and approvals.	General comments FSRA appreciates the time and effort that stakeholders have taken to review and provide input on the Guidance. Revision: FSRA has revised the ‘Approach to Assessing Fair Consumer Outcomes’ table in the new Chapter 2 to include “Pricing actuaries explain significant deviations.” Inclusion of Fair Consumer Outcomes Achievement of Fair Consumer Outcomes as described in Chapter 1 of the Guidance is the foundation of FSRA’s principles-based supervisory model for auto insurance. The Fair Consumer Outcomes are specific to rating and underwriting practices and intended to clarify FSRA’s expectations. The Fair Consumer Outcomes are not listed in order of priority. Insurers are responsible for assessing delivery of Fair Consumer Outcomes and striking an appropriate balance between them. Methods for evaluating fairness FSRA has revised the ‘Ongoing Supervision for all Insurers’ section of the Guidance to provide detail on the types of data FSRA will request and how accredited and unaccredited insurers will be assessed against the Fair Consumer Outcomes. The Filing Manual will contain greater detail regarding the specific requirements for fairness. Inclusion of consumer accessibility of products and coverages The inclusion of Accessibility as a Fair Consumer Outcome is intended to protect fair access to auto insurance, which is required to operate a motor vehicle in Ontario, for all Ontarians. This intent extends beyond human rights concerns and signals a responsibility of insurers and the industry to provide broad access to key coverages. FSRA will continue to engage the industry. Insurers may also reach out to their Relationship Managers, after conducting internal due diligence, when submitting Auto Insurance Filings.
Profitability	Definity Travelers IBC CADRI Aviva	Stakeholders expressed concerns about the references to profitability and recommended that FSRA remove the profitability provision. Stakeholders noted that accredited insurers should be permitted to target a profit provision based on business strategy and reviewing prior year profit levels will create extra work. One stakeholder suggested prior year loss developments and loss reserves should be evaluated instead.	This Guidance does not change the current approach to profitability or profitability benchmarks. The profitability benchmarks are also described in FSRA’s Annual Review Guidance. FSRA will review its approach to assessing industry profitability after the new supervisory model is place. FSRA has revised the Guidance to enhance clarity respecting how FSRA will assess rating and underwriting assumptions in terms of actual results. Revision: The ‘Approach to Assessing Fair Consumer Outcomes’ table has been revised to include: “Insurers may be asked to provide evidence that key actuarial assumptions used in the past, including but not limited to loss trend rates, loss development and underwriting results are reviewed against actual observed results and validated for reasonableness against FSRA's benchmarks.”
Transparency	Université Laval Canadian Vehicle Manufacturers' Association Ontario Trial Lawyers Association	Some stakeholders emphasized the importance of transparency and the importance of providing consumers with support for informed decision making, particularly with respect to available coverage options and how insurers can be held accountable for transparency. One submission recommended defining transparency so that it includes model interpretability and transparency on how insurance rates are calculated, including the factors and data that affect rates. A stakeholder suggested that data used in rate setting be publicly accessible.	Transparency is one of three key pillars of FSRA’s Auto Insurance Rating and Underwriting strategy and Auto Supervision Plan. FSRA has taken several steps to enhance transparency for consumers and help them to better understand their policy and premiums, such as: Fair Consumer Outcomes - Transparency is a key principle in FSRA’s new supervisory model and Fair Consumer Outcomes. Insurers will be expected to ensure that consumers receive timely, clear and accessible information that supports informed decision-making about their auto policy needs. Consumer shopping tool – The “Regulator Rate Ranger” tool helps consumers look up the range of premiums available across the entire Ontario market for people that have a similar vehicle and driver profile. Transparency strategy - FSRA has committed to developing an updated transparency strategy under priority 4.1 of FSRA’s 2025-2028 Annual Business Plan. The strategy will improve transparency and disclosure for consumers to increase awareness and product knowledge and support informed decision-making, with an emphasis on high insurer accountability for achieving these outcomes. FSRA’s Auto Supervision Plan – The "Sales & Distribution" component of the Auto Supervision Plan ensures that consumers receive clear and concise disclosures on coverage options. FSRA will also consider stakeholder input in future efforts to improve transparency in Ontario’s auto insurance system. FSRA defines Transparency and Model interpretability separately. Transparency is a Fair Consumer Outcome in Chapter 1 of this Guidance. Insurers are expected to clearly communicate the factors that influence pricing and underwriting decisions to consumers in a timely manner. Model interpretability is a characteristic of sound Controls and Oversight and is included within the list of Standard Practices outlined in the Appendix in the Guidance. It concerns internal processes and may include information that may be commercially sensitive and therefore not shared publicly.
Just and reasonable	Travelers	One stakeholder noted that just and reasonable does not mean or equate to fair or fairness.	It is FSRA’s determination that a risk classification system is "just and reasonable", reasonably predictive of risk and distinguishes fairly between risks if the rates it generates are consistent with the Fair Consumer Outcomes. As such FSRA will consider the Fair Consumer Outcomes in its assessments.
UDAP and intermediaries	Travelers Aviva	Several stakeholders recommended clarifying the application of FSRA’s UDAP Rule to the Fair Consumer Outcomes so that it refers only to those third-party activities that insurance carriers can influence or become aware of. Stakeholders also sought clarification on what is meant by an "insurer’s intermediary".	The UDAP Rule strengthens the supervision of insurance industry conduct and enhances consumer protection by clearly defining outcomes that are unfair or otherwise harmful to consumers. FSRA has revised the ‘Scope’ section of Chapter 1 of the Guidance to clarify affected regulated entities. Revision: FSRA has revised the Scope section on page 5 to reflect the following language: “This Guidance affects the following: all insurance companies, including but not limited to those underwriting private passenger automobile (“PPA”), non-private passenger automobile (“non-PPA”) and fleet, and intermediaries carrying out related functions third-party providers of products and services engaged by insurance companies, including but not limited to aggregators and rating model vendors; and consumers.”
Vulnerability	Université Laval	One submission recommended a greater focus on vulnerable subgroups/populations, including testing, to ensure fair consumer outcomes in vulnerable segments of the population.	FSRA has published its framework for strengthening protection of vulnerable consumers. The framework communicates how FSRA defines vulnerable consumers and actions it will take to strengthen the protection of vulnerable consumers across its regulated sectors. Additionally, FSRA’s Fairness Assessments will consider a review of the impact of rating and underwriting practices on consumer segments, including those that may be considered less vulnerable.
Controls and oversight	Aviva Insurance Bureau of Canada (IBC) OMIA Travelers Definity	Some stakeholders noted that large insurers have established controls and governance and FSRA should not expect large insurers to establish an OCG framework specific to Ontario. Stakeholders agreed that the Board of Directors do have a duty to ensure compliance through oversight, but they disagreed that the Board of Directors are responsible for ensuring rates are fair and reasonable. Stakeholders sought clarification on whether insurers who demonstrate compliance to OSFI’s guidelines must demonstrate operational risk management guidelines to FSRA. Model risk management: One stakeholder recommended substituting “disparate impact” with “disproportionate impact.” The stakeholder recommended amending “Insurers introducing new data, data elements, or models confirm compliance with all relevant legislation, regulations, and rules, and provide FSRA with supporting rationale for their decisions based on due diligence” to “... models shall ensure and demonstrate to FSRA that operational risk controls, governance, and oversight functions are in place to allow for the identification, risk assessment, communication, management, and mitigation of regulatory compliance risk.” Regulatory overlap: Some stakeholders recommended that FSRA align the Guidance with other regulators such as RIBO and ensure that requirements are not duplications of existing regulatory requirements. Data collection, analysis and reporting has become very costly for insurers and reducing duplication is critical to reducing the cost of insurance for consumers.	FSRA has made several changes to the Guidance to focus the requirements of Accreditation on the delivery of Fair Consumer Outcomes and the specific Controls and Oversight characteristics required to achieve them. Changes include restructuring the Guidance to incorporate the contents of the old Chapter 2 on Operations, Controls and Governance into the new Appendix and the new chapter on ‘Accreditation, Assessment Approach and Ongoing Supervision.’ FRSA’s consideration of Controls and Oversight will focus on specific data governance, model risk management and oversight requirements outlined in Chapter 2. FSRA’s supervisions of Controls and Oversight will focus on the requirements of accreditation. However, FSRA may decide to conduct a broader review of Controls and Oversight if necessary to ensure Fair Consumer Outcomes are being achieved. FSRA has revised the Guidance to reflect that it will consider established Controls and Oversight frameworks from insurers so long as they meet the requirements of the Guidance. Revision: FSRA has revised the ‘Accreditation, Assessment Approach and Ongoing Supervision’ chapter to include: “Either enterprise-level or Ontario-specific policies and procedures that sufficiently consider rating and underwriting processes and activities may be used to demonstrate sound characteristics of Controls and Oversight. For clarity, FSRA’s assessment is focused on evidence (i.e., verifiable data) that the Fair Consumer Outcomes set out in Chapter 1 have been met.” Model risk management Revision: The following language has been relocated to the Appendix as it is considered an example of Standard Practices for Sound Controls and Oversight and has been revised to reflect: “Insurers provide a detailed inventory of all models, analytics and data used in rating and underwriting decisions. This includes the policy driven data, as well as non-driver and non-vehicle related factors such as consumer behaviour, marketing data, and other elements that may indirectly or directly influence rating and underwriting decisions.” FSRA uses the term “disparate impact” as disparate impact assessment involves evaluating whether a particular group of policyholders is being treated more negatively (or unfairly) than others. Insurers are responsible for evidencing that they are compliant with the relevant Rules, Regulations and Legislation. As such FSRA expects insurers to carry out the necessary due diligence to confirm that all data and models comply with the relevant rules. Regulatory overlap FSRA will seek to engage with other regulatory organizations to avoid duplication where possible and to ensure that FSRA is provided with sufficient evidence that Fair Consumer Outcomes have been achieved. Revision: FSRA has revised the ‘Ongoing Supervision for all Insurers’ section of the Accreditation, Assessment Approach and Ongoing Supervision chapter to include: “FSRA’s data collection in support of supervision for rating and underwriting practices will aim to reduce duplication, including by using data available from existing sources. FSRA will accept documents that insurers share with other regulators provided that these documents meet the informational requirements set out in this Guidance and the Filing Manual.”
Accreditation	Insurance Bureau of Canada (IBC) Aviva OMIA Travelers CADRI Ontario Psychological Association	Stakeholders expressed broad support for the proposed accreditation system. Duration of accreditation Stakeholders recommended that accreditation be held on a long-term basis to maximize benefits and make the process less resource intensive. Stakeholders sought further clarity on the accreditation process, including with respect to how long accreditation would be held, the standards to which insurers will be held and various aspects of the accreditation application and approval process. Industry costs and benefits of accreditation Some stakeholders also noted that the criteria for insurers to maintain accreditation status are extensive and suggested that benefits of accreditation should reflect the investment needed apply for and maintain it. A stakeholder recommended that FSRA continue to balance resource allocation and cost management. Requirements such as “the absence of unfair bias” might be best clarified through the actual accreditation process. Some stakeholders expressed interest in viewing a draft application form for accreditation. Some stakeholders recommended removing changes in senior leadership and changes in business strategy as reasons FSRA may revoke an insurers accredited status. These standards are too subjective to be measured against. Proportionality Some stakeholders expressed support for FSRA’s commitment to considering an insurers size and complexity when meeting accreditation requirements. Some stakeholders sought clarification on how FSRA distinguishes proportionality between big and small insurers.	FSRA appreciates stakeholder support for the proposed accreditation system. Duration of accreditation FSRA appreciates stakeholders’ feedback regarding the duration of accreditation. FSRA has not specified a fixed duration for accreditation status. Accredited insurers will be required to maintain the standards of accreditation and could be placed under review if they fail to do so. If gaps or deficiencies are identified post-accreditation, depending on the materiality and potential for consumer harm, the insurer may be placed under review while the issues are being addressed, or in extreme cases, the insurer may lose their accreditation status. Industry costs and benefits of accreditation The standards of accreditation are high because the trust granted with accreditation is also high. Accredited insurers are those that have provided evidence that they are operating in a way that consistently achieves FSRA’s Fair Consumer Outcomes. This trust comes with certain Fast-Track filing privileges that will give insurers additional flexibility. However, if the standards of accreditation are not maintained, filing privileges will be suspended or revoked. The Guidance has been revised to focus the scope of accreditation on the Fair Consumer Outcomes and the specific Controls and Oversight characteristics required to achieve them. Revision: FSRA has removed language regarding senior leadership and revised the new Chapter 2 to include “FSRA expects insurers to inform FSRA of any material changes to their business and operations as they relate to the business of auto insurance, including but not limited to strategy, risk appetite and governance.” FSRA’s commitment to transparency and fairness is reflected in the Fair Consumer Outcomes. The scope of the Guidance is limited rating and underwriting practises. Claims handling is out of scope for this Guidance. Proportionality Details on how size and complexity will be considered will be contained in the Filing Manual.
Scope of Guidance	Aviva	Stakeholder recommended removing fleets from the scope of the Guidance.	Although fleet is exempted from rate and risk classification filings under Section 413 of the Insurance Act, fleet is required to file underwriting rules under Insurance Act s. 238 and non-standard OAP forms and endorsements under Insurance Act s. 227. These requirements fall within the definition of Auto Insurance Filings and are within the scope of the Guidance.
Ongoing Supervision	Ontario Trial Lawyers Association	A stakeholder recommended that proactive supervision include evaluation of an insurer’s involvement in the Licence Appeal Tribunal (LAT) resolution process. The stakeholder recommended that FSRA review insurer auto rating data and financial data and makes that data readily available to the public.	Dispute resolution, including the LAT, is out of scope of this Guidance. LAT data is a component of FSRA’s Market Conduct Proactive Supervision and feeds into the overall risk assessment. FSRA reviews insurer rating and financial data through filings and other supervisory activities. FSRA shares the stakeholder’s commitment to transparency while noting that some rating and financial data may be commercially sensitive and therefore is not shared publicly.
Auto theft (out of scope)	Canadian Automobile Dealers Association (CADA) Canadian Vehicle Manufacturers' Association (CVMA) CarRx Canda Global Automakers of Canada	Stakeholders recommended that FSRA consider high-risk vehicle rates and anti-theft measures in fair price reviews and recommended clarifying how the proposed reform will address the rising costs of premiums. They noted the market should be open for additional industry leaders to promote the use of anti-theft and vehicle recovery devices and that consumers should be educated with information about their vehicle choice, risk of theft, how surcharges can be mitigated and the impact their choice has on their overall premium.	FSRA appreciates the time and effort stakeholders have taken to provide input and will take this into consideration as part of FSRA’s broader rating and underwriting strategy work. Auto-theft surcharges, deductibles and anti-theft devices are out of scope for this Guidance. Consumers and insurers can refer to the latest Annual Review Guidance published on FSRA’s website to learn more about FSRA’s current position on industry practices related to auto theft and anti-theft solutions.
Out of scope	Ontario Rehab Alliance	One stakeholder expressed that Fair Consumer Outcomes should not be limited to rating and underwriting processes and should be extended to claims handing. The stakeholder expressed concern about lack of information given to consumers at purchase/renewal.	FSRA thanks the stakeholder for their submission. Claims handling and adjudication is out of scope for this Guidance. FSRA has included the Transparency principle as one of its Fair Consumer Outcomes, which communicates FSRA’s expectation that insurers provide clear, accessible and timely information to consumers so that they can reasonably understand the factors that influence pricing and underwriting decisions respecting their policy.
Credit	CADRI	One stakeholder recommended removing the prohibition on credit scores as a rating factor.	FSRA thanks the stakeholder for their submission. Changes to the existing prohibition on the use of credit information is not within the scope of this Guidance.
Rate Filing Approach	Definity IBC CADRI Facility Association	Stakeholders support modernizing the regulation of auto insurance. They noted that the accreditation program and fast-tracked filings in combination with FSRA’s enforcement and disciplinary tools will create a safer and more dynamic market. Some stakeholders supported focusing supervision of rate and underwriting changes on insurers that present a higher risk to customers and noted that FSRA can allow low-risk insurers to implement all types of rate and underwriting changes without prior approval. One stakeholder recommended that FSRA clarify what it means by ‘due diligence.’ In addition, the stakeholder expressed concerns about FSRA’s approach to monitoring “inconsistences in trend rate setting” and “excessive ultimate loss projections” and recommended removing these references. The stakeholder also recommended that FSRA further clarify language respecting the fast-track process, which could be interpreted to suggest multiple fast-track frameworks that could apply to either Accredited or non-Accredited insurers. One stakeholder expressed concern that FSRA may request further data, noting that the benefit of accreditation is a streamlined and seamless rate filing process for accredited insurers. Some stakeholders recommended that FSRA publicly consult on the Filing Manual.	FSRA thanks stakeholders for their support and feedback. FSRA would like to clarify that not all rating changes or underwriting decisions will be eligible for the Fast-Track filing stream. In addition, FSRA will continue to monitor rating and underwriting changes after implementation to ensure accreditation standards continue to be met. As part of an insurers’ due diligence, FSRA expects insurers to perform the necessary quantitative and qualitative analyses and ensure compliance with the relevant Regulations, Legislation, Rules and expectations outlined in the Guidance. FSRA will also conduct the relevant analysis to ensure the Fair Consumer Outcomes continue to be met. Under the new Supervisory Model, FSRA will follow a rigorous analysis of all filings aided by technology, data and greater insight into insurer practices. FSRA will use the information it gathers to ensure that insurers continue to meet the high standards of accreditation. FSRA does not have multiple fast-track frameworks. Some filing processes will be streamlined allowing for more efficient rate filings for all insurers on those specific filings. Certain Fast-Tracked filing processes will only be available to accredited insurers. The intention of accreditation is to provide streamlined processes for accredited insurers. However, FSRA has the discretion to ask insurers for information respecting auto insurance filings under the Insurance Act s. 238(3.1) and AIRSA s. 3(3). FSRA will continue to work with insurers and Technical Advisory Committee (TAC) members as work in support of the developing the Filing Manual progresses.

Theme

Stakeholers

Proposed summarized comment for public facing table

Proposed public FSRA’s response

Fair Consumer Outcomes

Definity
Travelers
Insurance Bureau of Canada (IBC)
CADRI
Université Laval
Aviva

General comments
One stakeholder recommended revising: “Pricing actuaries explain any deviations of business decisions from actuarial indications and model outputs” to include “significant deviations.”

Fairness
It was noted that FSRA’s inclusion of Fair Consumer Outcomes in the Auto Insurance Rating and Underwriting Supervision Guidance may introduce significant uncertainty in the insurance industry and is unnecessary given existing guidance on the fair treatment of consumers.

Some stakeholders or one stakeholder sought further clarity respecting the Fair Consumer Outcomes, including their order of priority, mutual compatibility and exhaustiveness.

Some stakeholders sought further clarity on how fairness will be assessed and what sort of data can be used for that purpose.

One stakeholder recommended removing: “Rating and underwriting decisions, if applied across the sector would not unfairly impact the ability of consumers to access critical automobile insurance coverages” given that the other fairness outcomes reference protected grounds respecting human rights.

Stakeholders recommended that FSRA ensure that insurers price, deliver and service products fairly and are transparent with respect to underwriting and approvals.

General comments
FSRA appreciates the time and effort that stakeholders have taken to review and provide input on the Guidance.

Revision: FSRA has revised the ‘Approach to Assessing Fair Consumer Outcomes’ table in the new Chapter 2 to include “Pricing actuaries explain significant deviations.”

Inclusion of Fair Consumer Outcomes
Achievement of Fair Consumer Outcomes as described in Chapter 1 of the Guidance is the foundation of FSRA’s principles-based supervisory model for auto insurance. The Fair Consumer Outcomes are specific to rating and underwriting practices and intended to clarify FSRA’s expectations. The Fair Consumer Outcomes are not listed in order of priority. Insurers are responsible for assessing delivery of Fair Consumer Outcomes and striking an appropriate balance between them.

Methods for evaluating fairness
FSRA has revised the ‘Ongoing Supervision for all Insurers’ section of the Guidance to provide detail on the types of data FSRA will request and how accredited and unaccredited insurers will be assessed against the Fair Consumer Outcomes. The Filing Manual will contain greater detail regarding the specific requirements for fairness.

Inclusion of consumer accessibility of products and coverages
The inclusion of Accessibility as a Fair Consumer Outcome is intended to protect fair access to auto insurance, which is required to operate a motor vehicle in Ontario, for all Ontarians. This intent extends beyond human rights concerns and signals a responsibility of insurers and the industry to provide broad access to key coverages.

FSRA will continue to engage the industry. Insurers may also reach out to their Relationship Managers, after conducting internal due diligence, when submitting Auto Insurance Filings.

Profitability

Definity
Travelers
IBC
CADRI
Aviva

Stakeholders expressed concerns about the references to profitability and recommended that FSRA remove the profitability provision.

Stakeholders noted that accredited insurers should be permitted to target a profit provision based on business strategy and reviewing prior year profit levels will create extra work.

One stakeholder suggested prior year loss developments and loss reserves should be evaluated instead.

This Guidance does not change the current approach to profitability or profitability benchmarks. The profitability benchmarks are also described in FSRA’s Annual Review Guidance. FSRA will review its approach to assessing industry profitability after the new supervisory model is place.

FSRA has revised the Guidance to enhance clarity respecting how FSRA will assess rating and underwriting assumptions in terms of actual results.

Revision: The ‘Approach to Assessing Fair Consumer Outcomes’ table has been revised to include: “Insurers may be asked to provide evidence that key actuarial assumptions used in the past, including but not limited to loss trend rates, loss development and underwriting results are reviewed against actual observed results and validated for reasonableness against FSRA's benchmarks.”

Transparency

Université Laval
Canadian Vehicle Manufacturers' Association
Ontario Trial Lawyers Association

Some stakeholders emphasized the importance of transparency and the importance of providing consumers with support for informed decision making, particularly with respect to available coverage options and how insurers can be held accountable for transparency.

One submission recommended defining transparency so that it includes model interpretability and transparency on how insurance rates are calculated, including the factors and data that affect rates.

A stakeholder suggested that data used in rate setting be publicly accessible.

Transparency is one of three key pillars of FSRA’s Auto Insurance Rating and Underwriting strategy and Auto Supervision Plan. FSRA has taken several steps to enhance transparency for consumers and help them to better understand their policy and premiums, such as:

Fair Consumer Outcomes - Transparency is a key principle in FSRA’s new supervisory model and Fair Consumer Outcomes. Insurers will be expected to ensure that consumers receive timely, clear and accessible information that supports informed decision-making about their auto policy needs.
Consumer shopping tool – The “Regulator Rate Ranger” tool helps consumers look up the range of premiums available across the entire Ontario market for people that have a similar vehicle and driver profile.
Transparency strategy - FSRA has committed to developing an updated transparency strategy under priority 4.1 of FSRA’s 2025-2028 Annual Business Plan. The strategy will improve transparency and disclosure for consumers to increase awareness and product knowledge and support informed decision-making, with an emphasis on high insurer accountability for achieving these outcomes.
FSRA’s Auto Supervision Plan – The "Sales & Distribution" component of the Auto Supervision Plan ensures that consumers receive clear and concise disclosures on coverage options.

FSRA will also consider stakeholder input in future efforts to improve transparency in Ontario’s auto insurance system.

FSRA defines Transparency and Model interpretability separately. Transparency is a Fair Consumer Outcome in Chapter 1 of this Guidance. Insurers are expected to clearly communicate the factors that influence pricing and underwriting decisions to consumers in a timely manner.

Model interpretability is a characteristic of sound Controls and Oversight and is included within the list of Standard Practices outlined in the Appendix in the Guidance. It concerns internal processes and may include information that may be commercially sensitive and therefore not shared publicly.

Just and reasonable

Travelers

One stakeholder noted that just and reasonable does not mean or equate to fair or fairness.

It is FSRA’s determination that a risk classification system is "just and reasonable", reasonably predictive of risk and distinguishes fairly between risks if the rates it generates are consistent with the Fair Consumer Outcomes. As such FSRA will consider the Fair Consumer Outcomes in its assessments.

UDAP and intermediaries

Travelers
Aviva

Several stakeholders recommended clarifying the application of FSRA’s UDAP Rule to the Fair Consumer Outcomes so that it refers only to those third-party activities that insurance carriers can influence or become aware of.

Stakeholders also sought clarification on what is meant by an "insurer’s intermediary".

The UDAP Rule strengthens the supervision of insurance industry conduct and enhances consumer protection by clearly defining outcomes that are unfair or otherwise harmful to consumers.

FSRA has revised the ‘Scope’ section of Chapter 1 of the Guidance to clarify affected regulated entities.

Revision: FSRA has revised the Scope section on page 5 to reflect the following language: “This Guidance affects the following:

all insurance companies, including but not limited to those underwriting private passenger automobile (“PPA”), non-private passenger automobile (“non-PPA”) and fleet, and intermediaries carrying out related functions
third-party providers of products and services engaged by insurance companies, including but not limited to aggregators and rating model vendors; and
consumers.”

Vulnerability

Université Laval

One submission recommended a greater focus on vulnerable subgroups/populations, including testing, to ensure fair consumer outcomes in vulnerable segments of the population.

FSRA has published its framework for strengthening protection of vulnerable consumers. The framework communicates how FSRA defines vulnerable consumers and actions it will take to strengthen the protection of vulnerable consumers across its regulated sectors.

Additionally, FSRA’s Fairness Assessments will consider a review of the impact of rating and underwriting practices on consumer segments, including those that may be considered less vulnerable.

Controls and oversight

Aviva
Insurance Bureau of Canada (IBC)
OMIA
Travelers
Definity

Some stakeholders noted that large insurers have established controls and governance and FSRA should not expect large insurers to establish an OCG framework specific to Ontario.

Stakeholders agreed that the Board of Directors do have a duty to ensure compliance through oversight, but they disagreed that the Board of Directors are responsible for ensuring rates are fair and reasonable.

Stakeholders sought clarification on whether insurers who demonstrate compliance to OSFI’s guidelines must demonstrate operational risk management guidelines to FSRA.

Model risk management:
One stakeholder recommended substituting “disparate impact” with “disproportionate impact.”

The stakeholder recommended amending “Insurers introducing new data, data elements, or models confirm compliance with all relevant legislation, regulations, and rules, and provide FSRA with supporting rationale for their decisions based on due diligence” to “... models shall ensure and demonstrate to FSRA that operational risk controls, governance, and oversight functions are in place to allow for the identification, risk assessment, communication, management, and mitigation of regulatory compliance risk.”

Regulatory overlap:
Some stakeholders recommended that FSRA align the Guidance with other regulators such as RIBO and ensure that requirements are not duplications of existing regulatory requirements.

Data collection, analysis and reporting has become very costly for insurers and reducing duplication is critical to reducing the cost of insurance for consumers.

FSRA has made several changes to the Guidance to focus the requirements of Accreditation on the delivery of Fair Consumer Outcomes and the specific Controls and Oversight characteristics required to achieve them. Changes include restructuring the Guidance to incorporate the contents of the old Chapter 2 on Operations, Controls and Governance into the new Appendix and the new chapter on ‘Accreditation, Assessment Approach and Ongoing Supervision.’

FRSA’s consideration of Controls and Oversight will focus on specific data governance, model risk management and oversight requirements outlined in Chapter 2. FSRA’s supervisions of Controls and Oversight will focus on the requirements of accreditation. However, FSRA may decide to conduct a broader review of Controls and Oversight if necessary to ensure Fair Consumer Outcomes are being achieved.

FSRA has revised the Guidance to reflect that it will consider established Controls and Oversight frameworks from insurers so long as they meet the requirements of the Guidance.

Revision: FSRA has revised the ‘Accreditation, Assessment Approach and Ongoing Supervision’ chapter to include: “Either enterprise-level or Ontario-specific policies and procedures that sufficiently consider rating and underwriting processes and activities may be used to demonstrate sound characteristics of Controls and Oversight. For clarity, FSRA’s assessment is focused on evidence (i.e., verifiable data) that the Fair Consumer Outcomes set out in Chapter 1 have been met.”

Model risk management

Revision: The following language has been relocated to the Appendix as it is considered an example of Standard Practices for Sound Controls and Oversight and has been revised to reflect: “Insurers provide a detailed inventory of all models, analytics and data used in rating and underwriting decisions. This includes the policy driven data, as well as non-driver and non-vehicle related factors such as consumer behaviour, marketing data, and other elements that may indirectly or directly influence rating and underwriting decisions.”

FSRA uses the term “disparate impact” as disparate impact assessment involves evaluating whether a particular group of policyholders is being treated more negatively (or unfairly) than others.

Insurers are responsible for evidencing that they are compliant with the relevant Rules, Regulations and Legislation. As such FSRA expects insurers to carry out the necessary due diligence to confirm that all data and models comply with the relevant rules.

Regulatory overlap

FSRA will seek to engage with other regulatory organizations to avoid duplication where possible and to ensure that FSRA is provided with sufficient evidence that Fair Consumer Outcomes have been achieved.

Revision: FSRA has revised the ‘Ongoing Supervision for all Insurers’ section of the Accreditation, Assessment Approach and Ongoing Supervision chapter to include: “FSRA’s data collection in support of supervision for rating and underwriting practices will aim to reduce duplication, including by using data available from existing sources. FSRA will accept documents that insurers share with other regulators provided that these documents meet the informational requirements set out in this Guidance and the Filing Manual.”

Accreditation

Insurance Bureau of Canada (IBC)
Aviva
OMIA
Travelers
CADRI
Ontario Psychological Association

Stakeholders expressed broad support for the proposed accreditation system.

Duration of accreditation
Stakeholders recommended that accreditation be held on a long-term basis to maximize benefits and make the process less resource intensive. Stakeholders sought further clarity on the accreditation process, including with respect to how long accreditation would be held, the standards to which insurers will be held and various aspects of the accreditation application and approval process.

Industry costs and benefits of accreditation
Some stakeholders also noted that the criteria for insurers to maintain accreditation status are extensive and suggested that benefits of accreditation should reflect the investment needed apply for and maintain it.

A stakeholder recommended that FSRA continue to balance resource allocation and cost management.

Requirements such as “the absence of unfair bias” might be best clarified through the actual accreditation process.

Some stakeholders expressed interest in viewing a draft application form for accreditation.

Some stakeholders recommended removing changes in senior leadership and changes in business strategy as reasons FSRA may revoke an insurers accredited status. These standards are too subjective to be measured against.

Proportionality
Some stakeholders expressed support for FSRA’s commitment to considering an insurers size and complexity when meeting accreditation requirements. Some stakeholders sought clarification on how FSRA distinguishes proportionality between big and small insurers.

FSRA appreciates stakeholder support for the proposed accreditation system.

Duration of accreditation
FSRA appreciates stakeholders’ feedback regarding the duration of accreditation. FSRA has not specified a fixed duration for accreditation status. Accredited insurers will be required to maintain the standards of accreditation and could be placed under review if they fail to do so. If gaps or deficiencies are identified post-accreditation, depending on the materiality and potential for consumer harm, the insurer may be placed under review while the issues are being addressed, or in extreme cases, the insurer may lose their accreditation status.

Industry costs and benefits of accreditation
The standards of accreditation are high because the trust granted with accreditation is also high. Accredited insurers are those that have provided evidence that they are operating in a way that consistently achieves FSRA’s Fair Consumer Outcomes. This trust comes with certain Fast-Track filing privileges that will give insurers additional flexibility. However, if the standards of accreditation are not maintained, filing privileges will be suspended or revoked. The Guidance has been revised to focus the scope of accreditation on the Fair Consumer Outcomes and the specific Controls and Oversight characteristics required to achieve them.

Revision: FSRA has removed language regarding senior leadership and revised the new Chapter 2 to include “FSRA expects insurers to inform FSRA of any material changes to their business and operations as they relate to the business of auto insurance, including but not limited to strategy, risk appetite and governance.”

FSRA’s commitment to transparency and fairness is reflected in the Fair Consumer Outcomes. The scope of the Guidance is limited rating and underwriting practises. Claims handling is out of scope for this Guidance.

Proportionality
Details on how size and complexity will be considered will be contained in the Filing Manual.

Scope of Guidance

Aviva

Stakeholder recommended removing fleets from the scope of the Guidance.

Although fleet is exempted from rate and risk classification filings under Section 413 of the Insurance Act, fleet is required to file underwriting rules under Insurance Act s. 238 and non-standard OAP forms and endorsements under Insurance Act s. 227. These requirements fall within the definition of Auto Insurance Filings and are within the scope of the Guidance.

Ongoing Supervision

Ontario Trial Lawyers Association

A stakeholder recommended that proactive supervision include evaluation of an insurer’s involvement in the Licence Appeal Tribunal (LAT) resolution process.

The stakeholder recommended that FSRA review insurer auto rating data and financial data and makes that data readily available to the public.

Dispute resolution, including the LAT, is out of scope of this Guidance. LAT data is a component of FSRA’s Market Conduct Proactive Supervision and feeds into the overall risk assessment.

FSRA reviews insurer rating and financial data through filings and other supervisory activities. FSRA shares the stakeholder’s commitment to transparency while noting that some rating and financial data may be commercially sensitive and therefore is not shared publicly.

Auto theft (out of scope)

Canadian Automobile Dealers Association (CADA)
Canadian Vehicle Manufacturers' Association (CVMA)
CarRx Canda
Global Automakers of Canada

Stakeholders recommended that FSRA consider high-risk vehicle rates and anti-theft measures in fair price reviews and recommended clarifying how the proposed reform will address the rising costs of premiums.

They noted the market should be open for additional industry leaders to promote the use of anti-theft and vehicle recovery devices and that consumers should be educated with information about their vehicle choice, risk of theft, how surcharges can be mitigated and the impact their choice has on their overall premium.

FSRA appreciates the time and effort stakeholders have taken to provide input and will take this into consideration as part of FSRA’s broader rating and underwriting strategy work.

Auto-theft surcharges, deductibles and anti-theft devices are out of scope for this Guidance.

Consumers and insurers can refer to the latest Annual Review Guidance published on FSRA’s website to learn more about FSRA’s current position on industry practices related to auto theft and anti-theft solutions.

Out of scope

Ontario Rehab Alliance

One stakeholder expressed that Fair Consumer Outcomes should not be limited to rating and underwriting processes and should be extended to claims handing.

The stakeholder expressed concern about lack of information given to consumers at purchase/renewal.

FSRA thanks the stakeholder for their submission. Claims handling and adjudication is out of scope for this Guidance.

FSRA has included the Transparency principle as one of its Fair Consumer Outcomes, which communicates FSRA’s expectation that insurers provide clear, accessible and timely information to consumers so that they can reasonably understand the factors that influence pricing and underwriting decisions respecting their policy.

Credit

CADRI

One stakeholder recommended removing the prohibition on credit scores as a rating factor.

FSRA thanks the stakeholder for their submission. Changes to the existing prohibition on the use of credit information is not within the scope of this Guidance.

Rate Filing Approach

Definity
IBC
CADRI
Facility Association

Stakeholders support modernizing the regulation of auto insurance. They noted that the accreditation program and fast-tracked filings in combination with FSRA’s enforcement and disciplinary tools will create a safer and more dynamic market.

Some stakeholders supported focusing supervision of rate and underwriting changes on insurers that present a higher risk to customers and noted that FSRA can allow low-risk insurers to implement all types of rate and underwriting changes without prior approval.

One stakeholder recommended that FSRA clarify what it means by ‘due diligence.’ In addition, the stakeholder expressed concerns about FSRA’s approach to monitoring “inconsistences in trend rate setting” and “excessive ultimate loss projections” and recommended removing these references.

The stakeholder also recommended that FSRA further clarify language respecting the fast-track process, which could be interpreted to suggest multiple fast-track frameworks that could apply to either Accredited or non-Accredited insurers.

One stakeholder expressed concern that FSRA may request further data, noting that the benefit of accreditation is a streamlined and seamless rate filing process for accredited insurers.

Some stakeholders recommended that FSRA publicly consult on the Filing Manual.

FSRA thanks stakeholders for their support and feedback. FSRA would like to clarify that not all rating changes or underwriting decisions will be eligible for the Fast-Track filing stream. In addition, FSRA will continue to monitor rating and underwriting changes after implementation to ensure accreditation standards continue to be met.

As part of an insurers’ due diligence, FSRA expects insurers to perform the necessary quantitative and qualitative analyses and ensure compliance with the relevant Regulations, Legislation, Rules and expectations outlined in the Guidance. FSRA will also conduct the relevant analysis to ensure the Fair Consumer Outcomes continue to be met.

Under the new Supervisory Model, FSRA will follow a rigorous analysis of all filings aided by technology, data and greater insight into insurer practices. FSRA will use the information it gathers to ensure that insurers continue to meet the high standards of accreditation.

FSRA does not have multiple fast-track frameworks. Some filing processes will be streamlined allowing for more efficient rate filings for all insurers on those specific filings. Certain Fast-Tracked filing processes will only be available to accredited insurers.

The intention of accreditation is to provide streamlined processes for accredited insurers. However, FSRA has the discretion to ask insurers for information respecting auto insurance filings under the Insurance Act s. 238(3.1) and AIRSA s. 3(3).

FSRA will continue to work with insurers and Technical Advisory Committee (TAC) members as work in support of the developing the Filing Manual progresses.