Purpose of the Consultation

The Financial Services Regulatory Authority of Ontario (FSRA) held an 80-day public consultation on proposed Approach and Interpretation Guidance “Reporting and Resolution of Rating and Underwriting Errors”. Thank you to those who provided feedback.

This guidance informs Ontario auto insurers of FSRA’s requirements when rating and underwriting errors occur, and outlines:

  • the expectation for proper notice and resolution of rating and underwriting errors for auto insurance consumers
  • FSRA’s supervisory approach, ensuring rating and underwriting errors are resolved

The consultation launched on December 8, 2021 and concluded on February 25, 2022.

Stakeholder feedback and FSRA’s responses

The report below summarizes the consultation feedback and provides FSRA’s responses.

The comments received include submissions from five insurers and two industry groups who brought forth valuable insight about current practices and recommendations to further protect Ontario’s automobile insurance consumers.

The consultation confirmed support for the Guidance. FSRA amended the Guidance to address stakeholder feedback as identified in the summary below.

The submissions are posted on FSRA’s website: Consultation on Proposed Guidance for Reporting and Resolution of Automobile Insurance Rating and Underwriting Errors

The following table summarizes the key themes raised during the consultation together with FSRA’s responses.

FSRA has made the following amendments to the Guidance:

  • “near misses” have been removed from the definition of minor errors
  • the description of a major error has been amended to include a minimum dollar amount and a minimum number of exposures and requires that both the dollar AND exposure thresholds be reached before an error is deemed major
  • the timelines for reporting and resolution have been combined and amended from “25 business days from the time the rating and/or underwriting error is identified” to “30 business days from the time the rating and/or underwriting error is confirmed”
  • errors are required to be reported to FSRA in writing (i.e. email) rather than through ARCTICS
  • the option to allow insurers to set an alternate threshold has been removed to ensure consistency in reporting
  • The requirement to publish rating and underwriting errors, by company name, has been removed from the Guidance. FSRA will explore options to create and publish an annual aggregate report that summarizes the errors reported under this guidance.
  • the timeline to review the Guidance has been reduced from three years to two years