ID
2020-018

Type
Règle
Secteur
Secteur de l'assurance automobile
État
Période de commentaires du public terminée
Date
Date de remise des commentaires
La Règle proposée relative aux actes ou pratiques malhonnêtes ou mensongers (APMM) s’applique à tous les assureurs, courtiers, intermédiaires, experts d’assurances et fournisseurs de biens et de services exerçant des activités dans le secteur des assurances. Nous nous excusons de la confusion causée par la désignation du secteur sur notre site Web.

Cette consultation est maintenant terminée.

L’ARSF lance une consultation publique afin d’obtenir l’avis des consommateurs, des membres de l’industrie et des autres parties prenantes dans le domaine concernant sa première règle proposée en matière d’assurance.

La règle proposée a pour objectif de rendre la surveillance dans le domaine de l’assurance plus transparente, dynamique et souple. Elle met également l’accent sur la nécessité de mieux protéger les consommateurs en définissant clairement les résultats qui sont inéquitables ou autrement néfastes pour les consommateurs.

La nouvelle règle, si elle est approuvée, favoriserait l’innovation, la concurrence et le choix. Par exemple, elle permettrait aux assureurs d’offrir des incitatifs à leurs clients, incluant des rabais ou des récompenses, si ces derniers satisfont à certains critères.

L’ARSF continue de surveiller le système d’assurance et de prendre des mesures pour aborder les inconduites. La règle relative aux APMM s’applique aux assureurs, aux courtiers, aux intermédiaires, aux experts en sinistres et aux fournisseurs de biens et de services œuvrant dans le domaine de l’assurance, notamment les fournisseurs de service de santé, les opérateurs de dépanneuse, les ateliers de réparation de véhicule et les services d’entreposage de véhicule.

L’ARSF tient une consultation d’une période de 90 jours relativement à la règle proposée et souhaite obtenir des commentaires du public en général et des parties prenantes.

La règle proposée relative aux APMM peut être consultée à Règle relative aux actes ou pratiques malhonnêtes ou mensongers (APMM) [2020-002].

Cette consultation est maintenant terminée.

FAQ sur les APMM

Que sont les APMM?

Actes ou pratiques malhonnêtes ou mensongers (APMM) : L’article 439 de la Loi sur les assurances interdit les « actes ou pratiques malhonnêtes ou mensongers ». Le règlement de l’Ontario 7/00 (règlement sur les actes ou pratiques malhonnêtes ou mensongers) aux termes de la Loi sur les assurances prescrit certains actes et pratiques considérés comme malhonnêtes ou mensongers. Il peut s’appliquer aux assureurs, aux courtiers, aux intermédiaires, aux experts en sinistres et aux fournisseurs de biens et de services œuvrant dans le domaine de l’assurance comme les fournisseurs de soins de santé, les ateliers de réparation de véhicule, les services d’entreposage de véhicule et les opérateurs de dépanneuse.

Le concept juridique qui sous-tend les APMM est un élément critique de l’approche de l’ARSF visant à protéger les consommateurs contre un large éventail de préjudices éventuels dans le secteur de l’assurance. Aux termes de la Loi sur les assurances, l’ARSF a le pouvoir de procéder à des examens et à des enquêtes afin de déterminer si une personne œuvrant dans le domaine de l’assurance a posé un acte mensonger ou malhonnête ou adopté une pratique mensongère ou malhonnête. La Loi sur les assurances permet également à l’ARSF d’appliquer différentes mesures de conformité, par exemple des pénalités administratives, afin de sanctionner les actes ou les pratiques mensongers ou malhonnêtes.

Pourquoi l’ARSF a-t-elle élaboré une nouvelle règle pour remplacer la réglementation actuelle sur les APMM?

La Loi de 2016 sur l’Autorité ontarienne de réglementation des services financiers donne à l’ARSF un pouvoir de réglementation. L’Autorité a élaboré une règle fondée sur des principes qui peut lui fournir une plus grande souplesse dans la surveillance en matière d’assurance et accroître la protection des consommateurs.

La réglementation actuelle sur les APMM n’est pas harmonisée avec l’approche fondée sur les principes de l’ARSF qui vise à protéger les consommateurs. Les parties prenantes dans le domaine de l’assurance ont demandé de revoir la réglementation actuelle afin qu’elle offre une plus grande souplesse et ont indiqué que la réglementation était trop rigide et qu’elle représentait un obstacle à l’innovation.

Qu’est-ce qu’une réglementation fondée sur des principes?

Une approche fondée sur des principes en matière de réglementation repose sur des principes généraux élaborés par l’organisme de réglementation plutôt que sur des règles rigides interdisant certaines actions. Ce type de réglementation permet d’établir des attentes claires pour ce qui est des résultats prévus. Elle offre de la souplesse aux entités réglementées; celles-ci peuvent déterminer leur approche de manière à respecter ces attentes et atteindre leurs résultats. Une approche fondée sur des principes sert mieux l’intérêt du public en permettant plus d’innovation, de concurrence et de choix.

Comment la règle proposée améliorera-t-elle la protection des consommateurs?

La règle proposée a pour objectif de rendre la surveillance dans le domaine de l’assurance plus transparente, dynamique et souple. Elle met également l’accent sur la nécessité de mieux protéger les consommateurs en définissant clairement les résultats qui sont inéquitables ou autrement néfastes pour les consommateurs. Elle vise à améliorer les mécanismes relatifs à l’identification, à la dissuasion et à la sanction des inconduites afin de mieux protéger l’intérêt du public. Sont inclus dans la règle le traitement inéquitable des consommateurs, les pratiques abusives en matière de demandes d’indemnisation et les comportements qui visent délibérément à induire les consommateurs en erreur.

Quelles sont les nouvelles mesures que peuvent prendre les assureurs aux termes de la règle proposée et comment les consommateurs en profiteront-ils?

En plus de renforcer la protection, les consommateurs bénéficieront des changements proposés par l’ARSF qui visent à favoriser l’innovation, la concurrence et le choix. Par exemple, la nouvelle règle permettrait aux assureurs d’offrir des incitatifs à leurs clients, incluant des rabais ou des récompenses, si ces derniers satisfont à certains critères.

Sous réserve du respect de certaines normes relatives au traitement équitable exposées dans la règle proposée, voici quelques exemples :

  • Un assureur pourrait offrir à ses clients un rabais sur sa prime d’assurance automobile pour son bon comportement en matière de conduite;
  • Un assureur pourrait offrir à un consommateur une inspection de plomberie gratuite ou à un prix réduit afin de réduire le risque de dommages causés par l’eau;
  • Un assureur pourrait offrir une carte-cadeau en guise de récompense à un consommateur qui adopte un comportement réduisant le risque assuré.

Remarque : Ces nouvelles possibilités sont offertes en sus des rabais sur les primes que les assureurs automobiles peuvent déjà offrir afin de récompenser les clients inscrits à un programme d’assurance fondé sur l’utilisation et qui ont un bon dossier de conduite.

Étant donné que la règle proposée permettra aux assureurs d’offrir des rabais et des récompenses, quelles sont les mesures qui protégeront les consommateurs contre les rabais inappropriés?

La nouvelle règle permettra aux assureurs d’offrir des rabais et des incitatifs aux consommateurs à condition que ces rabais et incitatifs :

  • ne mènent pas à des décisions qui vont à l’encontre des intérêts des consommateurs;
  • ne sont pas interdits par la loi;
  • sont communiqués de façon transparente; et
  • ne sont pas injustes, discriminatoires et anticoncurrentiels.

Est-ce que les changements proposés feront augmenter les primes?

L’ARSF ne s’attend pas à ce que les changements proposés fassent augmenter les primes. En permettant plus de concurrence et d’innovation et en établissant des normes claires pour la protection des consommateurs, la règle proposée profitera tant aux assureurs qu’aux consommateurs.

La règle proposée est affichée aux fins de consultation et l’ARSF souhaite obtenir des commentaires sur les conséquences imprévues qui pourraient en découler.

Où puis-je obtenir de plus amples renseignements?

La règle proposée peut être examinée à Règle relative aux actes ou pratiques malhonnêtes ou mensongers (APMM) [2020-002]. L’ARSF invite le public et toutes les parties prenantes à formuler leurs commentaires avant le 18 mars 2021.

Liens utiles

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Secteur Commentaire Date postée Trier par ordre décroissant
Secteur des planificateurs et conseilers financiers
[2020-018] Derek J Lanting, CFP CPCA - PPI
I dislike incentives that cause a broker to consider his/her compensation prior to acknowledging the fudiciary duty owed the client. As an insurance member, as well as a MFDA rep, I would prefer the discontinuation of all incentives, and perhaps simply raise base compensation for sales by an equivalent amount (if an average insurance sales person gains $1000 in incentives, raise base compensation for standard business sales so that the same $1000 is realized). In MFDA, as my compensation is equal across all retailers, my constant focus is on client service with the best/most appropriate product.
Some insurance corps require minimum policies per year in order to qualify to sell - and I have emailed them that this constitutes undue pressure on me to sell to meet their target - instead of meeting the needs of clients.
THis is a sticky topic - and i wish you patience and wisdom and you attempt to craft a solution!
Secteur de l'assurance automobile
[2020-018] Ron S
I think this is great start to more transparency from industry. First lets start with Facility Association bringing in $50,000 and $100,000 deductible on trucking customers after enjoying profits from the clients. No explanation has been given on that new policy. Seems like FSRA approved it as well. Do you care to shine some light on that change?
[2020-018] Anthony Haynes
Re: Auto insurance. This is a very abusive unfair system by the insurers. There is absolutely no distinction between moving violations and non moving violations. This is designed either to deny insurance or price gouge. For example, two missed payments over 10 years because of intermittent unemployment and they either refuse to provide insurance or price gouge. How is an insurance company facing additional risk in this case? According to insurance companies people never become unemployed temporarily or those people are uninsurable. This is off course extremely stupid and unrealistic. There are many fixes to this that does not put insurers at risk.
Secteur de l'assurances habitation, vie et maladie
[2020-018] Maggie Du
I was an advisor with a national account dealer for insurance companies, when a policy was transfer out from the dealer, I received commission charged back from insurance company. However, I was also charged back for commissions I did not receive for policies when they were released from the previous dealer. This makes me wondering whether the insurance company are double dipping both side of advisors.
When I changed to a new MGA, I was refused to transfer out my old clients' commission even I continue to service these clients. I find this is not a fair practice to agent who spend time to service clients. It is also not fair to clients who may not receive proper service. The servicing advisor should be compensated for their time and efforts to service clients.


Secteur de l'assurances habitation, vie et maladie
[2020-018] Mark Lillie
I am a licensed Insurance Agent and often see commission driven solutions pushed on unknowing clients. I'd like to see full disclosure of commissions, up front, as part of any life insurance policy. Even the commissions paid to me for my own term life policy were egregious. Many thanks.
Secteur de l'assurances habitation, vie et maladie
[2020-018] Wilson Igwe - Ally Adjusters Ltd.
As an adjuster who has been on both sides of the claims process and as an advocate for the fair and reasonable treatment of policy holders, specifically during the claims process which is considered to be the 'moment of truth' for insurers, I am excited to see activity form those monitoring behaviours of financial institutions more specifically insurers; in that I am hopeful to contribute to the necessary guidelines that should be put in place for insurance claim handling amongst straight forward, routine scenarios that would enable immediate access to the indemnity advertised, promised and sold to the policy holder in order they carry on with their lives or businesses, and leaving any truly contentious issues to be resolved on the back-end.
The claims process is truly never a one-step type of process and this is understandable, however, over the years we have been privy to numerous abuses of the indemnity /claims process by differing levels of those involved with administering claims from the insurance company side and their 'preferred' handling vendors who routinely employ heavy-handed and unfairly leveraged tactics enabling lawless abuse of the claims process, also with underlying pretexts far removed from any honourable intention of the insurance policy and remote from reasonable or simply humane behaviour, during a process meant to promptly and meritoriously put people back on their feet after suffering a loss - be it auto, property, injury, liability. etc....
We look forward to more consultations on differing aspects of the insurance industry that would continue to evolve insurance processes (specifically claims) for protections of more fair and less arduous, abusive and unempathetic behaviours by some of those empowered with directly enabling indemnity to those whom who suffered legitimate losses ands seek the benefits of their product purchased as the insurance contract.
Ultimately, insurance companies are trust companies entrusted with safe-keeping premium dollars in order to pay warranted and covered losses with promptitude, however, it is quite ironic that the very consumers that patron these companies view them as the most 'untrusted and unliked, however necessary' societal institutions.
With my ear to the ground and on the front lines of these claim confrontations, I truly believe that there is a better, more reasonable, more judicious manner to inject more fairness, accountability and boundaries to benefit all interested parties.
The Unfair or Deceptive Acts or Practices needs a section for some guidelines for fair claims handling practice and possibly a department/panel whom must issue appropriate reprimands for parties who breach (if we should seek its effectiveness).
I remain available for serious consultation on enacting fair measures to ensure consistency and just behaviours amongst this great industry and would be open for pre-consultation in order to narrow contentious issues between consumers and insurers.
Thank you and sending my regards.

Secteur de l'assurance automobile
[2020-018] Ronald Gillis
This is a modified form of rebating which is prohibited under the Insurance Act. Carriers only desire to get closer to consumers so they can by pass the Broker Channel. This is sheer lunacy, and is another intrusion in the lives of the premium paying public
Secteur de l'assurances habitation, vie et maladie
[2020-018] VINCENZO PRINCIPATO - Beneplan Inc
To whom it may concern,
I would like to offer my comments on the "proposed rule that will allow insurers to offer rebates/rewards". My name is Vince Principato and I am an Employee Benefits Advisor that has been in business for over 30 years. I am not clear on whether or not this proposal is applicable to the employee benefit sector but I am making the assumption that it does, and I will structure my comments based on this assumption.

I believe if insurance companies are allowed to offer rebates and rewards to clients on the employee benefit programs they underwrite, it will lead to higher premiums on the employee benefits plan for that client. Let me briefly explain, unlike most other types of insurance products employee benefits specifically extended health care and dental care premiums are really not insurance. Insurance is when you purchase coverage for an unforeseen event such as disability or death (we all know that we will die we just do not know when). Health and Dental coverage is not an unforeseen event, most people will see their dentist at least once or twice a year, and most people take medications on a regular basis or at least expect to take the odd medication throughout the year.. There is nothing unforeseen about this. Therefore health and dental premiums are based on claims that are made plus a carriers overhead expenses. Ultimately the ratio of the premiums paid vs the claims made (loss ratio) must fall within the insurance carrier parameters, and if it doesn't the insurance carrier will adjust the premiums at renewal accordingly. If premiums are discounted or rebated this would lead to higher loss ratios which of course would lead to higher premiums. Unfortunately despite advisors doing their best to explain the ramifications of discounted premiums, most employers do not take the time to understand these tactics and end up moving their benefit program to these carriers. Yes, these discounting tactics already do occur to the detriment of employers and employees, insurance carriers today will offer lower premiums in order to entice employers to bring their benefit programs to them, only to have those lower premiums skyrocket on renewal. I have simplified my example above only to illustrate the point and provide some basic context.
I believe that if insurers are allowed to discount premiums or offer rewards or rebates on benefit plans it will result in very large increases for the employers and ultimately their employees. If you wish to further discuss this issue I would be happy to cooperate.

Thank you.
Secteur de l'assurances habitation, vie et maladie
[2020-018] Mike O'Grady B.A., A.I.I.C. - O'Grady & Associates Insurance Services Inc.
I have been an insurance broker for 42 years and would like to suggest some common sense to assist consumers, reduce loss ratios and offer some ideas regarding Ontario Auto Insurance.

1) Licensing drivers.
Drivers need to be tested. This can be done on a voluntary basis. Customers should be offered a voluntary free test by their insurer and discounts can be structured into passing the test, frequency of testing (5 years?) . Common sense suggests being tested at age 16 and never being tested again is not a good model to assist consumers, insurers.

2) Insurers should offer their clients free dangerous driving courses, skid course testing. Discounts can be tied into taking these courses. It would be nice for drivers to be assisted by their insurer in offering learning courses to refresh and correct driving habits. Every driver in Ontario would benefit and this would result in better loss ratios.

3) Minimum education standards for agents/ brokers. Currently there are no minimum education requirements. An individual does not even need a high school diploma to sell insurance. Legal documents being sold with this in mind hurts consumers as the legal documents being sold are complicated.

4) Auto policies are identical for all. It is time to rethink how we help consumers. Please consider offering consumers "voluntary" education, and "voluntary" testing. Loss ratios will improve. Insurers should be investing in their clients. Consumers deserve an insurance advisor who is better trained and educated. Mention to anyone that in order to sell insurance you do not even need grade 8 and that person will respond in disbelief.
[2020-018] Gord McGuire - Adair Goldblatt Bieber LLP
I'm a litigator who often represents insurance policyholders in disputes involving home and property insurance such as residential house fires. I have been counsel in a number of cases in which the insurer has decided to cancel the insured's policy before the claim has been allowed, or before the amount of the claim has been agreed upon. Finding a new insurer while one has an open insurance claim can be next to impossible, meaning the cancellation puts enormous pressure on the insured to settle the claim as soon as possible, or else risk being left uninsurable. This should be expressly prohibited. Insurers should be precluded from cancelling an insurance policy prior to the resolution of a claim unless the claims process has been unduly delayed by the insured.
Secteur de l'assurances habitation, vie et maladie
[2020-018] David Brokerage Patriarche - Mainstay Insurance Brokerage Inc.
Comments on the Unfair or Deceptive Acts or Practices (UDAP) Rule

I have been an Ontario licensed insurance agent for almost 25 years. I run a practice (Mainstay Insurance Brokerage Inc.) that specializes in providing employee benefits to small and mid-sized companies headquartered in Ontario. I am also the founder and administrator of Canadian Group Insurance Brokers, an association dedicated to the education of those in the employee benefits/group insurance space. It is from this benefit focused position that I offer my comments below.

I understand that this proposed rule was originally intended for the Auto insurance sector, but the wording below appears to extend it to other insurance industry sectors and areas. It simply does not make sense for this to apply to the employee benefits arena.

“The UDAP rule applies to insurers, brokers, intermediaries, adjusters and providers of goods and/or services engaged in the insurance sector. It applies to, but is not limited to, health service providers, tow truck operators, vehicle repair shops and automobile storage facilities.”

If this proposed rule is applicable to employee benefits area, the negative consequences to consumers (both employers and employees) will be significant.

Employee benefit premiums are determined in consideration of each employers industry, plan design, claims experience and demographics. At renewal each year, these rates are adjusted based largely on the “premium to claims ratio” that the specific employer has experienced in the past year. If a portion of that premium is “rebated”, then the resulting renewal can be significantly higher.

As an example, if a 2 month “rebate” of premium were provided, but the corresponding claims were not removed, it would cause the renewal to be at least 25% higher once all the discount, inflation and trends are included. If employees are paying a portion of the premium (as they often do), they too will see large and unnecessary increases to their portion of the costs. This type of volatility in rates can result in employees “voting out” plans, or employers cutting plan coverage in order to maintain sustainability. Many consumers are unsophisticated buyers who are unaware how group plan rates are set or renewals calculated. Providing these discounts, rebates or incentives results in a “save now, pay later” model that has no place in the benefits area. Insurers could take advantage of these rebate opportunities to acquire plans without concern for the long term impact to the employer/consumer.

Rebating has no place in the group benefits market because of the negative impact it will have on consumers. We are now seeing employee benefit insurers selling to both employees and employers with their direct marketing. Having rebates or incentives involved in this process can create more and bigger problems when unsophisticated consumers are not provided with competent independent advice.

I am unclear how this proposed rule will in any way “protect” consumers.

• Would a rebate offered by an insurer to obtain a company’s business protect an employer? Or put them at more risk when the impact is felt a year down the road when at plan renewal?

• What will the impact be on plans where the employee is paying 50% of the premium? The employer collects it through payroll deduction and then is rebated by the insurer. Would this approach benefit the employer at the expense of the employee? Would it be communicated? What are the tax implications such as on disability benefits?
This new rule would allow insurers to offer rebates and incentives as long as those incentives:
• do not lead to decisions that are against the interests of consumers;
• are not prohibited by law;
• are transparently communicated; and
• are not unfairly discriminatory or anti-competitive.

Underfunding plans, thereby creating higher than expected renewals would be against the interests of the consumers.

Could or would these discounts be passed onto employees? Who would decide, monitor and oversee these communications?

Many of these issues could have a negative effect on consumers be it at the employer or employee level. I understand how there may be space for rebates in the auto market, where rates are set by class, but in the employee benefits area, they would cause significant ingoing issues.

It appears that there was little or no involvement of the stakeholder committee (which has very few independent advisor, and NO employer representation) in these discussion. In addition, attempting to have a “one size fits all” solution for all areas of insurance seems extremely short sighted as they each utilize differing renewal processes.

We currently have group insurers providing misleading and somewhat deceptive renewal information as a result of COVID-19 premium discounts/reductions. They are “forgetting” months of claims data and then inflating and creating claims in other areas, where none were incurred. This proposed change would make experiences like this commonplace and is unacceptable.

The simple solution to this problem is to make this change apply ONLY to auto insurers and not other areas of the industry such as group insurance/employee benefits.

I appreciate the opportunity to provide these comments and am available to discuss anything in further or to ensure that the advisor and consumer perspective are effectively represented.

Dave Patriarche
Mainstay Insurance Brokerage Inc.
905-886-9203
[email protected]
[2020-018] Mike Kanters
Insureds need a clear understanding of identity theft as well as cyber threat coverages.

When researching identity theft coverage when it was first offered to me, I determined that it did not provide any coverage at all. My credit card and bank were required by law to cover almost everything that the insurance company offered to cover but I wasn't covered for things like somebody working under my SIN number and sticking me with the taxes. If the goal is to clean-up deceptive practices then that is a great place to start.

Thanks,
Mike Kanters.
Secteur de l'assurances habitation, vie et maladie
[2020-018] Todd Hounsome - Brokers Trust
Hello

I just wanted to comment on the UDAP proposed rule change that would allow insurers to rebate and provide incentives.
I believe this rule directly violates what the financial service industry has been trying to achieve over the past 15 years.
You want consumers purchasing based on professionalism, advice and service not based on rebates and incentives.
I believe that this rule change will hurt most consumers as they may be persuaded to change or move carriers based on rebates and incentives and not based on professional advice.
Advice, professionalism and service has been at the forefront on the financial services and life insurance industry for many years and this rule change really does hurt this concept.
In my opinion this rule change should not take place as it violates wat the industry has been trying to achieve for many years by protecting consumers.

Sincerely,

Todd Hounsome






Secteur de l'assurances habitation, vie et maladie
[2020-018] Lynn Wintraub - Win-Life Insurance Agencies
I have read the suggested revision to the rules regarding rebating and while this change in rules seems to be in respect of Auto insurance, it is not clear that the change in the regulations will not impact other insurance products, nor is it clear that the regulation has been restricted to just auto insurance. As an independent insurance agent who specializes in group benefits (and has worked in the industry for more than 30 years), I do not feel that rebating premiums can ultimately be good for the consumer. The nature of how rates are set at renewal each year (based on how much has been paid out in claims for experience rated benefits) makes rebating a troublesome idea. While employers are the group contract holders, employees' are the direct beneficiaries of these group contracts and I am concerned that rebate promises will ultimately impact the appropriate pricing, funding and viability of benefit programs for employees. I would suggest that the change in the regulations be made very specific and only in relation to auto insurance.
[2020-018] Mike Kanters
It is difficult for an insured to understand what they are or are not covered for. This needs to be stated in plain English! For example: All Perils vs. Specified Perils; it sounds like All Perils auto coverage should cover everything but it does not. Trying to understand which ones of these coverages is right for a car owner is difficult and when I've asked brokers they struggle to give advice on it. All is about as black and white as it can get so why isn't All Perils coverage actually ALL perils?

The recent pandemic clearly underscored the problem with relation to business interruption. I understand why insurers cannot be made to pay for all the claims but on the other hand, how clear is it that businesses aren't covered for some interruptions? I know there is a lot of grey area around how the business was interrupted as well but there is significant room for improvement.

Insurance is a basic necessity of business and life. In some cases it is forced upon us by law (with good reason). Given how ubiquitous it is in life, the wordings need to be clear about what is and is not covered so people can understand the protection they have purchased. Most small businesses and even fewer private insureds comprehensively understand their current insurance coverage or documentation. I learned to read mine through necessity; most people are completely dependent on the brokers or agents who serve them and who currently only have the existing jargon to teach by.

Additionally, the value of a loss should include the concept of replacement cost for a like product. For example: two cars of the same make and model are not identical in value. Insurance wordings and practices seldom differentiate between the car with low mileage and in good repair compared to the car with high mileage and wear. Insurance companies are quick to point out that someone's car is below average value when settling a claim but they won't pay extra for a total loss on a car that was in a good state of repair and possibly with low mileage. If it costs an insured more to replace a lost vehicle with a like vehicle then the insurance company has not been honest in their practices.

If you want to clean-up the deception; people need to understand the coverage they have and insurance companies need replace losses with 'like' replacements. Otherwise the insured is only partially covered and left with little recourse. The cost to fight for the difference is higher than the value of the difference and it is unfair to those that don't have the resources to deal with it.

When trying to make the guidelines flexible to anticipate future needs and innovation, don't leave them open with loopholes. Target ethical practices and language; that should leave lots of room for innovation. Consider concepts like describing what is and is not covered. Phrase the base concepts in the legislature to protect the insured who doesn't have the access to armies of lawyers if you want the companies to be ethical. The European GDPR is a good example of protecting the victims by erring on the side of making it the company's responsibility to prove they need something rather than the victim needing to prove the company doesn't need something. It is easier to loosen restrictions in a law than it is to tighten them down again later.

Sincerely,
Mike Kanters

Secteur des planificateurs et conseilers financiers
[2020-018] Theresa (Terry) Zavitz - Zavitz Insurance and Wealth
FSRA Comments on Unfair or Deceptive Acts or Practices (UDAP) Rule
I am an Ontario licensed insurance advisor for 37 years with my own company, Zavitz Insurance and Wealth, a part of which is engaged in employee benefits to large and small companies. I have read the document and am concerned the wording can be extended to other insurance sectors, most particularly group benefits, and request a wording change that clarifies UDAP applies to auto insurance alone. UDAP, if applied to group benefits, will have negative consequences to employers and employees and likely to result in much higher premiums. I can understand how UDAP could benefit the consumer in regards to auto insurance, but auto and group benefits are very different in how benefits are paid and how premiums are established. I don't believe the intention is to apply a broad brush to the insurance industry with the thought that what is good for the auto industry is good for group benefits, however, the wording can be interpreted to include group benefits as it stands. I appreciate the clarification that UDAP relates to auto insurance only. I would be pleased to provide more detail if requested.
Kindest regards, Terry

Secteur de l'assurance automobile
[2020-018] Healthcare Advocate
FSRA’s First Proposed Insurance Rule Released for Public Consultation – the Unfair or Deceptive Acts or Practices (UDAP) Rule
Here are my comments.
You call this “principle-based” but I see no meaningful or substantive principles to support consumer protection when it comes to insurance company handling of healthcare claims.
Missing principles:
• Independence. The regulator and the LAT should clearly uphold the need to be independent of the insurance industry. They must avoid bias that has favoured Ontario Auto insurance companies for well over a decade. Data and analysis regarding unfair or deceptive practices which is provided by the insurers or their consulting firms needs to be subject to critical analysis and scrutiny by the regulator. The industry is subject to a conflict of interest which favours depicting healthcare as illegitimate. Some companies routinely manipulate data and analysis to justify persistent unfair and deceptive practices when it comes to handling health claims. As long as the regulator refuses to assert its independence from the industry, accident victims will suffer from unreasonable obstructions to accessing healthcare they need.
• Proportionality. There has to be a threshold between reasonable and unreasonable behaviour on the part of insurers handling health claims. Insurance “investigations” or “questions” are often unreasonably numerous and allowed to persist for years without any clear evidence or reasonable grounds and no clear resolution or conclusion. Meanwhile accident victims cannot get funding for their healthcare. Certain insurers use disproportionate questioning as a means to accuse healthcare providers of failing to provide sufficient “evidence” and these insurers use this as an excuse to justify vastly reduced payment or denial of payment for healthcare.
• Scope of jurisdiction. The Regulated Health Professions Act and other Healthcare college regulations concerning clinical standards needs to be out of scope for claims adjudication. Allowing claims adjusters to adjudicate adherence to 100s of healthcare regulations, treating healthcare providers as presumptively guilty without any reasonable grounds, has resulted in extreme abuse of process that violates patient rights. Typically insurers abuse this process by demanding clinical documents that have no purpose and therefore do not exist. These abusive audits are undertaken by certain insurers on a vast and unlimited scale that violates the public interest and damages accident victim ability to obtain healthcare. Auto insurers cannot be permitted to audit the clinical practices of health care providers and use these vexatious and frivolous audits to deny payment for healthcare. Evaluating the adherence to clinical standards should not be delegated to claims adjustment personnel with no expertise in this area and a sole interest in denying claims. When it comes to evaluating the quality of the clinical service provided, the patient is the priority and the insurer is acting against the patient. The insurance company is clearly engaging in this questioning as a means to falsely de-legitimatize the healthcare so as to avoid funding it. Instead of funding healthcare, premiums are funding compensation, job security and power for employees and contractors responsible for health claims denial. Certain companies flood health regulatory colleges with supposed complaints about the clinical practices of healthcare providers in violation of the wishes of the patients who wish services to continue to be funded. Regulatory colleges have been hijacked by insurance companies to carry out pointless disciplinary investigations that go on for years harming patient access to care. Regulatory colleges feel shamed and intimidated by this flood of expensive and elaborately constructed complaints insurers have concocted without any reasonable grounds. When insurance companies file complaints against healthcare providers, patient access to quality healthcare is made to seem a “risk” rather than the goal for the regulatory colleges and the public interest is deeply violated as the colleges try to appease the insurers.
As long as FSRA and insurance companies persist in violating the above principles, accident victims will suffer from lack of access to quality healthcare.

Targeted Questions
1. Are there any parts of the Proposed Rule that are too general or require further detail, including for the purposes of clarity or closing possible gaps?

Answer: There needs to be more detail about the limits of the SABs section on Duty of provider to provide information 46.2 so as to cut down on the extreme abuse insurers engage in for the purpose of denying funding for healthcare.

3. FSRA has drafted the Proposed Rule to ensure that the intent of existing consumer protection provisions is preserved where no substantive policy change is being proposed. FSRA has deliberately erred on the side of maintaining consumer protections even where they may be redundant given other aspects of the Proposed Rule. An example includes provisions related to non-compliance with the Statutory Accident Benefits Schedule in section 5 (Unfair Claims Practices) given the contents of section 3 (Non-Compliance with Law). Are there sections of the Proposed Rule that are redundant and can be removed without compromising consumer protection?

Answer: The regulator provides no consumer protection with respect to health claims and this has persisted for over 10 years . As long as the regulator sees preserving claims denial powers as superseding all other priorities, accident victims cannot get healthcare.

4. Are there any other issues or amendments to the Proposed Rule that FSRA should consider as it proceeds to its intended second stage of work in this area?

Answer: The regulator must examine its longstanding bias in favour of insurance company denials of healthcare. Examine your culture.

Secteur de l'assurances habitation, vie et maladie
[2020-018] Allan Sabat - The Consulting House Inc.
As a licensed group insurance broker for the past 17 years, I find the proposed rule to be very concerning. Our clients turn to us as their trusted brokers to help them navigate the complex world of Employee Benefits. Having an insurance company offer rebates to earn business will mean more direct sales from insurers to consumers without the support of an insurance broker. Group Insurance (Employee Benefits) requires a sufficient premium to pay for an employee's claims and offering a rebate in premium will have a negative impact on the renewal as it reduces the amount of money available to pay claims. This rebate should not apply to group insurance contracts and I look forward to learning more. I would be happy to discuss further. Thank you, Allan Sabat
Secteur des planificateurs et conseilers financiers
[2020-018] Edward Sabat - The Consulting House Inc.
I have been a licensed advisor for 20 years and a Certified Financial Planner for 12 years. The UDAP proposal to rebate and incentivize clients to purchase products should not apply to group benefits nor to individual life insurance products. I am requesting that a change be made to the wording to reflect my concerns, as well as many other advisors concerns about this proposal. In addition to misleading clients on the true cost of the products, a rebate paid to a consumer is taxable as income. However, customers are rarely informed of this. Many individuals fail to understand the tax consequences. This has led to CRA audits and court cases.
Secteur de l'assurance automobile
[2020-018] Matt Caron - Ontario Trial Lawyers Association

Secteur de l'assurances habitation, vie et maladie
[2020-018] Mike McClenahan - Third Party Administrators Association of Canada
TPAAC is pleased to provide the attached submission.
Please do not hesitate to reach out if you have questions.
Mike McClenahan, President
Third Party Administrators Association of Canada
Secteur de l'assurance automobile
[2020-018] David McNeely
(Non Injury Issues Automobile Insurance) I am concerned that it took 6 months to fix my car properly and 8 months for my auto insurer to supply a Final Position Letter that was initially promised by the Insurers Ombudsman and not delivered despite further requests. I filed a complaint with the regulator regarding the failure to provide the FPL as required. The regulator, once involved, requested an FPL, giving the insurer 30 days to provide one. My file was then closed. An FPL was finally obtained after 60 days and contacting the regulator again. Given the tight timelines to bring the matter to court, there is a need to establish time limits for the insurer to provide a written statement regarding their position. Their unreasonable and intentional delay negated bringing the matter to small claims court. The insurer apologized and the regulator felt the apology and the promise to do better in the future was enough. As well, key statements that the Insurer made on the FPL were proven false by investigators from another government entity. The regulator (FSRA) refuses to deal with the false statements provided by the insurer in writing on the FPL.. I have also noticed that the new complaint form has removed the information about an FPL being a requirement of the insurer to provide. How is someone going to know about the requirement? Both the Insurer and FSCO referred me to GIO. GIO advised that FSCO had more authority then they did to decide the issues. Given the relationship between the insurance industry and GIO, I believe it is time that FSRA look at creating timelines and responses that favour bringing disputes to small claims court and before an independent judiciary. If the FSRA truly wants to get rid of unfair or deceptive acts or practices, they need to publish complaints against insurers so that consumers can see what is actually going on in the industry and which companies have the best record for dealing with matters. The time for self reporting by the Insurers anonymously is past. The definition of Insurance Fraud also needs to be expanded to include the actions and misrepresentations of the Insurance industry themselves. The collecting and selling of collision data and vehicle history reports by the industry needs to be brought into the open. A portion of the profits from the sale of data should be used to offset rates for consumers. A historical overview on the sale of information can be found on the Competition Bureau of Canada website containing a 2011 Case UCDA (Used Car Dealers Association) vs IBC (Insurance Bureau of Canada). Consumers should also be advised that they can check the information the Insurers have on them by ordering a free CGI AutoPlus Report. The Insurers themselves should be made responsible for the quality and accuracy of the information they have gathered on consumers. Instead of providing a brief overview, the industry should have to supply all of the information they have on a consumer, unless it would threaten an active investigation. Currently there is an onus on the consumer to ensure information is correct - but they need to know about the existence and access to these reports. The regulator needs to demand that the information is accurate and should be notified when problems are discovered.
Secteur de l'assurance automobile
[2020-018] FAIR Association of Victims for Accident Insurance Reform
FAIR submission to the Proposed Rule [2020-002] Unfair or Deceptive Acts or Practices

Thank you for the opportunity to speak to the issue of unfair or deceptive acts or practices in Ontario’s auto insurance industry. FAIR (Fair Association of Victims for Accident Insurance Reform) is a grassroots not-for-profit organization of Ontario’s MVA (Motor Vehicle Accident) survivors who have struggled with access to recovery resources under the current auto insurance system.

Consumer protection should be a basic underpinning of auto insurance since the product itself is a promise of coverage when you need it. Unfortunately that has not been the case since most regulations have been designed to protect insurer profits at the cost of consumer health and recovery and the taxpayers who pay when insurers don’t.

It is deeply disturbing to see “the government has passed amendments that permit the CEO of FSRA, on application by a person or entity, to exempt persons or entities from requirements under the Act that are prescribed by regulation, and specify the conditions to which the exemption is subject, should the CEO be of the opinion that doing so would not be prejudicial to the public interest”. This would undermine the intent in this new principals-based regulation to protect consumers since such new ‘rules’ would be so easily manipulated at the whim of a single person. This ‘new power’ to influence auto insurance or to “exempt persons or entities from requirements under the Act” introduces a new element of distrust by placing so much power in the hands of the CEO and it gives a perception of possible corruption and influence that will work against consumers.

It is unclear why the wording is changing from ‘regulation’ to ‘rules’ or why a principle-based rule would be any more effective than the current regime. The current regulation has failed injured consumers and by extension the taxpayers who are paying for Ontario’s court system to continually redefine what coverage really means. This overuse of our courts is, in and of itself, an abuse and an unfair act by insurers trying to escape accountability.

By FSRA’s own definition this new UDAP rule “would require less prescriptive oversight resources, while generating improved outcomes for consumers; principles based regulation, however, does not entail giving up the ability to enforce.” How can less oversight resources improve consumer outcomes? There’s already a clear trail of broken contract agreements by Ontario insurers and the dedicated statutory benefits (SABs) hearings system, LAT AABS, is overrun with unpaid car crash survivors looking for recovery resources they were promised but their insurer failed to deliver. There’s nothing here to speak to what that ability to enforce means. Does it mean fines or other meaningful sanctions for those who act without principals? We cannot find that answer here. It’s worth noting that the Stakeholder Advisory Committee members who recommended that the UDAP be reviewed (page 5) are all insurance companies or affiliates and there are no consumer representatives on that committee.

If the intent is “to improve the identification, deterrence and sanctioning of misconduct to better protect the public interest“, then we must ask where are the sanctions? The offences are only vaguely articulated and the costs/sanctions/deterrence for insurers (and others listed as subject to this UDAP rule) is absent. This reads like a free pass for insurers without the accompanying possible outcomes or disincentives for poor behavior included in the UDAP Rule.

Consumers need certainty and they need to know what is and is not acceptable behavior in clear and concise language. They need timely response to their complaints and they need to be updated on the progression of those complaints as it works through the system. There needs to be greater clarity here and greater transparency. Our last inquiry into the volume of complaints under consideration at FSRA was in excess of 800 cases and that alone is a testament to the overwhelming discontent with this product by consumers. It speaks to insurers’ failure to live up to consumer expectations and existing legislation. The volume of complaints tells the story about the lack of understanding by consumers AND insurers about what is, and what is not acceptable behavior. Creating more uncertainty with an absence of detail about what happens when unclear or murky expectations aren’t met is not an improvement for consumers.

We see no upside to the alignment with CCIR / CISRO FTC Guidance (1) provisions in respect to misrepresentation and/or unfair claims practices when that guidance suffers from the same lack of follow-through or sanctions information as this proposed UDAP rule does.

1. Are there any parts of the Proposed Rule that are too general or require further detail, including for the purposes of clarity or closing possible gaps?

Consumers need to know exactly what is and is not acceptable insurer behavior when it applies to:

• Response time to claim notification needs to be made clear because initial response from insurers has grown significantly longer in recent years. Consumers have no idea what to expect or what is acceptable. Consumers need to know and insurers ought to inform.

• Information insurers provide them with immediately following a claim needs to be better explained as do any timelines associated with establishing and maintaining that claim including filing for a hearing. These are details that should be consistent across the board and are perhaps best supplied by FSRA on their website. Claimants need to know exactly what information they should be getting from their insurer and when it is required in order to know whether they truly are being fairly treated during the claims process.

• Clear concise rules about insurer medical examinations. Claimants will often have to attend multiple medical exams and they need to know how many will be required. They need to know what the timing of those examinations should be, the extent of the examinations and the risks of attending those medical examinations. A recent decision at the CPSO has made it clear that they take little interest in these Third Party examinations when it was stated: “The College does not regulate the quality control of third-party IME for the province of Ontario and the insurance industry.” ICR Committee #1111896, Sept 1, 2020 (2) This does not inspire confidence that the examiner will be qualified and experienced in a particular specialization that is relevant to the claimant’s injury by education, training and experience. Insurers must be made responsible for ascertaining the integrity and expertise of their choice of medical experts and treatment providers and there must be sanctions when they fail to do so.

• There are far too many questions surrounding cancelled medical appointments that are driving up the cost of insurance and it is often a problem created by the assessment firms hired by insurers. There is a serious lack of transparency around the relationship between insurers and their experts and/or their service providers that needs to be addressed and that starts with understanding expectations. The failure to protect the interests of some of the most vulnerable patients in Ontario ought to have consequences beyond ‘take us to court if you disagree with a medical report’ stance insurers have taken.

• Insurers have increasingly failed to be reliable when it comes to paying out on their obligations when it comes to SABs recovery resources. Consumers expect a penalty will be applied when this happens. Insurers should also be accountable when their denial of claim is not consistent with legislation and there is a failure to provide adequate information about the denial to the claimant. These are issues that lead to court cases and significant expenses for claimants but even worse is the delayed treatment leading to poorer recoveries.

• UDAP complaints ought to have some sort of timeline associated with informing complainants about the progression of their complaint. This should be done at regular intervals because the complaints we are aware of are in the system for well over a year and consumers have no way to know where they stand or how long they must wait to hear back about a UDAP issue. We would hope there would be a way to designate ‘larger picture’ complaints that center on public interest from individual or more focused complaints. These are distinctly different and the outcome expected by the complainants is different as well. There is a lack of transparency about how the complaints are handled that doesn’t tell us which insurers are being complained about and why. This is a missing piece or part of protecting consumers who want to know which insurer would best serve them.

2. Are there any implementation considerations, such as transition issues or the coming into force date of the Proposed Rule, that interested parties would like to bring to FSRA’s attention?

We think there should be a second look at this implementation in regard to the inclusion of what the sanctions and deterrence will be and how that would be applied. In other words – what will enforcement look like? There’s a lot of detail missing and that deserves a second look.

3. FSRA has drafted the Proposed Rule to ensure that the intent of existing consumer protection provisions is preserved where no substantive policy change is being proposed. FSRA has deliberately erred on the side of maintaining consumer protections even where they may be redundant given other aspects of the Proposed Rule. An example includes provisions related to non-compliance with the Statutory Accident Benefits Schedule in section 5 (Unfair Claims Practices) given the contents of section 3 (Non-Compliance with Law). Are there sections of the Proposed Rule that are redundant and can be removed without compromising consumer protection?

We see the need for more detail, not less. There should be consideration to preserving some of the regulation under s. 5 of Reg 7/00 in the new UDAP rules. Entitlement hinges on quality medical information and insurers have not given any reason to trust that they will not stay on the same path of mis-information and/or medical file manipulations to support claim denials. There must be accountability since recovery resources and quality of life are at stake.

4. Are there any other issues or amendments to the Proposed Rule that FSRA should consider as it proceeds to its intended second stage of work in this area?
The question needs to be asked – is the new UDAP about reduced regulatory burden or about consumer protection because the two, while not mutually exclusive, are likely not achieved by reducing regulatory oversight.

FAIR supports robust oversight of Ontario’s auto insurers and their affiliated partners to ensure consumer confidence through UDAP rules that protect consumers from unscrupulous behavior. Information and education in a transparent system is key to ensuring consumer confidence. We support innovation and flexibility but that too must come with oversight.

Thank you for the opportunity to be heard and we are always available for further discussion about this important issue.

FAIR Association of Victims for Accident Insurance Reform

(1) Canadian Council of Insurance Regulators (“CCIR”) and the Canadian Insurance Services Regulatory Organizations (“CISRO”) Guidance https://www.ccir-ccrra.org/Documents/View/3450
(2) FAIR letter to Minister of Health regarding CPSO oversight failure http://www.fairassociation.ca/wp-content/uploads/2020/10/Auto-insurance-and-CPSO-failure-to-protect-patients-letter-to-Minister-Elliot-Oct-22-2020.pdf

Secteur des services de soins de santé
[2020-018] David - Canadian Society of Chiropractic Evaluators
Attached please find the submission from the Canadian Society of Chiropractic Evaluators. Included are examples of bias in Insurer Examinations.
Secteur de l'assurances habitation, vie et maladie
[2020-018] Michael Williams, President - CAILBA
March 18, 2021

Dear Sirs/Mesdames,

Re: Financial Services Regulatory Authority of Ontario
Notice of Proposed Rule and Request for Comment
Proposed Rule [2020-002], Unfair or Deceptive Acts or Practices

The Canadian Association of Independent Life Insurance Brokerage Agencies (CAILBA), welcomes the opportunity to comment on Financial Services Regulatory Authority of Ontario Proposed Rule [2020-002], Unfair or Deceptive Acts or Practices (the Proposed Rule). We have focused our comments on the life and health insurance industry and sections 7 and 8 of the Proposed Rule, which most directly affect our members.
CAILBA is a national industry association of life insurance intermediaries that helps our members to stay abreast of change and effectively implement compliance and regulatory updates. We work with our insurance carrier members to identify their expectations and provide education, knowledge, and tools to our members and their insurance brokers to help them stay current with industry best practices and technology. We provide a platform for our MGA members to collaborate and share ideas and best practices across Canada in order to better the industry and build unity in the MGA community nationally.

Comments

In our view, rebating should be strictly prohibited to ensure the protection of consumers of life and health products. We believe this clarity helps ensure more equitable outcomes for all consumers. Rebating of any amount in any form creates an uneven playing field whereby a consumer can pay a different price for the same product depending on the rebate being offered by the broker. In addition, allowing rebating is in direct conflict with the Canadian Council of Insurance Regulators’ ‘Fair Treatment of Customers’ Guidance; put simply, how can consumers be treated fairly when they may be paying different prices for the same product? Aside from the inherent unfairness of providing products at different prices (often based largely on negotiating skills), it is clear to us that attempts to regulate the practice have created some unforeseen problems.

This becomes more important in the context of the long-term nature of many of these products (e.g., life insurance), and their relative complexity. In all cases, one cannot discount the possibility of short-term financial gain and a possibly inappropriate product over longer-term financial security. This is particularly true as the unequal offering or availability of rebates (e.g., based on regulatory environment or distribution channel) could lead to financial advisors’ not providing appropriate pre- or after- sale services.

If permitted in certain circumstances, as section 7 of the Proposed Rule suggests, we believe this would lead to unforeseen consequences as individual judgment is exercised in circumstances in which there may not be parity in terms of knowledge, both between a consumer and financial advisor, and among all consumers. This is even the case for group policies, where a more ‘even playing field’ with sophisticated purchasers is assumed. Other than the fact that rebates may not be passed onto the end consumer, initial premiums (with attendant rebates) in one year may have an effect on subsequent group pricing. This is exacerbated, in our opinion, if lower-cost providers are permitted to rebate as they often sell through call centres where individualized and independent financial advice is not on offer.

As FSRA is aware, rebating is rarely used in the life insurance brokerage world to make a product more affordable to a consumer; rather it is used as an incentive for the consumer to purchase the product through one broker rather than using another. This may drive insurers and brokers out of the market, leading ultimately to increased premiums and reduced choice for all consumers. Also, whether based on premiums or commissions, rebates are often structured creatively in ways that are not made clear to consumers. Some examples of ways used to rebate based upon premium are set out below:
• % of monthly premium
• % of annual premium
• % of premium calculated over the ‘average’ lifetime of a similar policy
• % of premium from issuance to ‘life expectancy’ of the insured life
• % of ‘standard’ premium as opposed to a reduced premium given to the consumer due to a ‘grouping’ discount, ‘volume’ discount and/or ‘underwriting’ discount.

We have also seen rebates of commissions based on:
• % of base First Year Commission
• % of base First Year Commission + Base Override
• % of base First Year Commission + Full Override
• % of commission over the ‘average’ life expectancy of the policy
• % of non-discounted commission.

Further, a rebate paid to a consumer is taxable as income, but many brokers fail to understand these tax consequences and consumers are rarely informed of them. This has led to CRA audits and court cases which further tarnish the industry (see Lapalme v. R. 2011 TCC 396).

Although we oppose the practice of rebating, we do believe that reimbursement for certain fees, such as for switching from one financial institution to another, should be permissible. This to us does not appear to be ‘rebating’ (the circumstances of which are varied and dependent in many cases on the relative knowledge and experience of the consumer and the advisor), but rather covering the pre-paid and identifiable cost of a service. To ensure equitable access to this reimbursement benefit, we recommend that its availability be fully disclosed to all life and health insurance consumers. This has the added possible benefit of reducing churning in the industry.

Conclusion

We generally support the positions taken by our peers and other stakeholders, particularly with respect to their recommendations that FSRA hold separate consultations on rebating in the life and health insurance industry. We believe that these practices do not promote fair treatment of consumers and that attempts to correct observed problems will likely create unforeseen consequences. If permitted at all, rebating practices would be difficult to monitor without more explicit guidance.
On behalf of our CAILBA members, I wish to thank you again for the opportunity to comment, and look forward to further consultations on these very important issues.


Secteur de l'assurance automobile
[2020-018] The Poor Never Forget - Anon
It is quiet disappointing to see only comment sections available for such complex topics to give feedback on. We have noticed many cases of discrimination in the insurance system for many years now. Continued fraudsters are getting away with multiple accidents without any accountability because they are protected by the system within a Motor Vehicle Situation (MVA) situation.

How is that in community more folks know about insurance frauds than the government or courts while INNOCENT hard working - trustworthy Canadians get put under the buss for years trying to fight there way to survive on a daily basis while fighting to access any benefits they have the right to but have to prove to even start it. What has Ontario turned into? The system is so corrupt from top to bottom no one is IMMUNE trust me not even lawyers some how always forcing settlements on customers suffering years to get benefits. I want to make this very care if you are not going to AUDIT the insurance companies and the system as a whole at every level then you will see more suffering and suicide rates to huge growth in INSURANCE DUMPING OF INNOCENT ACCIDENT VICTIMS INTO THE ALL READY FAILED ONTARIO SOCIAL PROGRAMS...creating not only a societal prison but loss of tax payer money to increases in family suffering, lack of opportunity, huge growth in mental health problems in the communities, increased drug use, increased signing up for MAiD, etc. We are a diverse community and are ALL HUMAN.

WE SHOULD NOT LET those in POWER structures to benefit for suffering peoples situations when it comes to any MVA situation be it from the person at fault or not. HOW is it that the system is 100 times more generous to the person at fault when the victim always must have their life turned into the worst experience of their whole life and are the ones seeking and always having to always prove they’re not AT FAULT when it has been already determined by GOVERNMENT powers that this person is not at fault. But still their LIFE gets Dragged like a garbage bag and no one can save them. Not only does their families suffer but they miss out of on the most important memories, celebrations, of their lives because of how psychologically afraid they are that the INSURANCE companies always are watching them and their every move and are AWARE anything you do to try to live will be used against you. Your identity will be challenged, your culture, your immigration status everything, social media posts tainting you as a BAD PERSON...etc.

This is a shame time we are living in and this pandemic has only WIDEN the DIVIDE between the RICH AND THE POOR. We must SUCK up our privilege and ASK OURSELVES. Are we human? or are we just part of a factory which we do not see the suffering of customers paying insane amounts of money to billion-dollar insurance companies that literally can get away with anything.... Should we not fight for someone who has EVERY right to defend themselves and be treated equally in the system that of a person of privilege in society.

I can tell you right now right that I would either be not on this earth or prefer to be in prison and treated better there without the psychological trauma (private investigators, social media records, forcing a victim to wait years BECAUSE THEY CAN... while forcing them to be RE-VICTIMIZED MULTIPLE TIMES OVER BY THEIR OWN MEDICAL PROFESSIONALS THEY PAY FOR…etc) and financial hardship these insurance CAUSE INNOCENT VICTIMS OF CAR ACCIDENTS especially the fact that they HAVE IMMUNITY at every level.

Innocent VICTIMS of MVA's don't want to lose many years of their life to settle for the amount of money someone would have made at Dollarama working part-time for the same-time period while dealing with the worst situations of their lives like living in this prison I mentioned above. VICTIMS FIGHT TO GET RESPECT AND SECURITY for THEIR RIGHTS AND SUFFERING THEY WENT THROUGH DURING THIS ORDEAL. Open your brain a little bit why do you think SO MANY PEOPLE SETTLE EARLY? ALMOST 99% Don't go to COURT WHY?? because folks (especially minorities and the poor) slowly start figure out this SYSTEM WILL ONLY MAKE THEM SUFFER the longer it drags out, but they KNOW THEY WILL SUFFER.THEY KNOW WE DO NOT OFFER THEM THE REAL OPPORTUNITY AND AFFIRM THEIR RIGHT TO ACCESS *THE SUFFERING AND PAIN* which is (worth more than anything else) THEY ARE ONLY GIVEN IF TO PROCEED TO COURT TRIALS.

Please all I ask you is to use your brains and empathy to ask these questions brought forward above. One last thing ASK HOW IN THE WORLD DID WE GET TO A PLACE IN CANADA WHERE INSURANCE COMPANIES HAVE BECOME SO COMFORTABLE IN DUMPING INNOCENT VICTIMS INTO THE WELFARE SYSTEM AND CONTINUE TO GET AWAY WITH THIS. Such a disgrace. Just look online thousands of folks forced to get into ODSP OR OW.

This is a shame and a disgrace to taxpayers because I can tell you one thing ODSP and OW is something you WISH and PRAY to never be apart of.... That’s all I am going to say.

Secteur de l'assurances habitation, vie et maladie
[2020-018] Lyne Duhaime - Canadian Life and Health Insurance Association
Please find attached CLHIA's comments..
Secteur de l'assurance automobile
[2020-018] Colin Simpson - Insurance Brokers Association of Ontario (IBAO)
Please see attached file for IBAO's comments on the new UDAP Rule.

Many thanks

Colin Simpson
[2020-018] Law Society of Ontario - Law Society of Ontario

Secteur de l'assurance automobile
[2020-018] Erica Kelsey - Aviva Canada
Please see attached submission. Thank you for the opportunity to provide feedback.
Secteur de l'assurance automobile
[2020-018] John Taylor - Ontario Mutual Insurance Association

Secteur de l'assurance automobile
[2020-018] Kim Donaldson - Insurance Bureau of Canada
Please find attached IBC's submission
Secteur de l'assurance automobile
[2020-018] Elliott Silverstein - CAA Insurance
Attached please find CAA Insurance's comments on FSRA's proposed rule on Unfair or Deceptive Acts or Practices.
Secteur de l'assurance automobile
[2020-018] Dr. Moez Rajwani and Ms. Dorianne Suave - Auto Coalition
Please find attached our submission on the proposed UDAP rule.
Secteur de l'assurances habitation, vie et maladie
[2020-018] Richard Ollier - Travel Health Insurance Association of Canada
The Travel Health Insurance Association of Canada (THiA), recognized as the leading voice of the Travel Insurance Industry in Canada, is pleased to provide comments and feedback on the Proposed UDAP Rule in the attached document.

Please don't hesitate to contact me to discuss further.

Best regards

Richard Ollier
President
Travel Health Insurance Association of Canada
Secteur de l'assurances habitation, vie et maladie
[2020-018] Danica Sergison - Advocis, the Financial Advisors Association of Canada
Dear Sirs/Mesdames,

On behalf of Advocis, The Financial Advisors Association of Canada, please find attached a response to FSRA's consultation on the proposed rule regarding unfair or deceptive acts or practices (UDAP).

Regards,

Danica Sergison
Associate Director, Legal and Regulatory Affairs
Secteur de l'assurances habitation, vie et maladie
[2020-018] Andrew Fitzpatrick - Canada Life
Please find attached the submission of Canada Life.

Thank you.
Secteur de l'assurance automobile
[2020-018] Craig Hirota - Associated Canadian Car Rental Operators (ACCRO)
Speaking on behalf of the Canadian car and truck rental industry and specifically, our industry members in Ontario, Associated Canadian Car Rental Operators (ACCRO) is pleased to see proposed initiatives designed to improve consumer protection. However, with respect to the proposed Unfair or Deceptive Acts or Practices (UDAP) Rule, ACCRO has significant concerns that portions of the proposed rule to not adequately address issues endemic to the Ontario automobile insurance landscape.

Among the objectives listed in the “Substance and Purpose of the Proposed Rule” section are the requirements that the proposed rules:

Do not lead to decisions that are against the interests of consumers, and…are not unfairly discriminatory, anti-competitive or reliant on prohibited factors.

While these would appear to be foundational requirements, they are referenced only in terms of the portion of the proposed rule that address the area of customer incentives and rebates from insurers. Given the proposed rule’s shift to “Principles-based drafting,” protecting the interests of consumers and prohibiting unfair discrimination and anti-competitive practices should reside in the backbone of the regulation not limited to the portion of the rule that addresses incentives, rebates, or other inducements to accept policy conditions.

Other stated intentions of the proposed rule are flexibility and transparency. This is to be accomplished in part by incorporating the participation of stakeholders for future supplements to the rule and to identify and prevent misconduct “to protect the public interest and ensure desired outcomes.” In the text of the proposed rule, the entities captured by the rule include “for greater clarity and without limitation, automotive repair, towing and storage services.” Despite falling under the authority of FSRA and the proposed rule, none of the included claims service providers have a conduit via FSRA to identify or report misconduct. This asymmetry biases the rule; a claims goods or services provider can only be accused under the rule but cannot bring a complaint themselves. This opens the possibility that insurers will use the rule in a manner that is anti-competitive within the marketplace to the ultimate detriment of the consumer.

There are systemic issues that increase conflict between claimants and insurers and friction between all service providers tasked with the goal of restoring the insured to pre-accident condition. In a document produced by FSRA’s predecessor, FSCO, the “Auto Insurance Consumers’ Bill of Rights”, one of the consumer rights is, “you have the right to choose a repair shop, tow operator, or vehicle rental company.” This document resides on FSCO’s website at fsco.gov.on.ca/en/auto/brochures/Pages/brochure_billofrights.aspx.

Despite this long-held insured’s right to choose their service provider, insurers too focused on claims costs outcomes rather than claimant outcomes will exert leverage upon their insureds to influence their choice, also known as ‘steering’. A common tactic (just one of many) involves changing the administration of a policy benefit based on which service provider is chosen, this despite no acknowledgement at policy inception that the policy benefit would be applied unevenly based on which service vendor was chosen. Naturally, left with the choice of using the insurer’s vendor of choice and no money out of pocket versus using the vendor of the insured’s choice but having to pay up front and apply to the insurer for a likely contentious reimbursement, virtually all insureds are ultimately strong-armed into using the vendor of the insurer’s choice. This is a deceptive act on the part of the insurer and an anti-competitive act inflicted upon the marketplace. Under current and proposed rules, the marketplace has no venue available to address anti-competitive actions on the part of insurers.

If the interests of consumers are truly important to FSRA, their ability to choose must be respected and FSRA must engage with claims service providers who allege harm from an insurer’s anti-competitive actions.

ACCRO is not opposed to the concept of an insurer’s preferred providers. However, it must be acknowledged that the quid pro quo inherent in a preferred provider agreement disqualifies that arrangement from bearing reference to any determinations of unreasonable or unfair costs or expenses.

From the proposed rule:

“Unreasonable consideration” means an amount being paid or sought for goods or services provided to a claimant that a reasonable person, in the position of the provider of the goods or services, would not charge or seek, or would not expect a reasonable person, in the position of the recipient of the goods or services, to accept.

1(2) For greater clarity: (i) in determining what amounts to a reasonable person who is an insurer, the reasonable person will be deemed to have a level of knowledge and expertise commensurate with that insurers size and type of business…”

The definition of “unreasonable consideration” in the rule anchors its reference to the insurers size and type of business. This implies acceptance of an insurer’s internally negotiated pricing as proxy for fair market value. An example of the inequity that will result follows. The Ontario Automobile Policy, since at least the days of the original OMPP form, has codified a basic temporary substitute vehicle benefit as $30/day (described in the current OAP 1 as “reasonable expenses for the rental of a similar substitute automobile” OAP 1 section7.4.4). In 1990, $30/day was not a reasonable proxy for a base market value rate. ACCRO is not aware of what consultation occurred, if any, to determine that figure within the policy. In 2021 with the average cost of a new car approximately double what it was in 1990, it is clearly not reflective of a ‘reasonable expense’ for rental of an automobile, yet the policy benefit in the section of the policy describing “loss of use due to theft” limits the policy benefit to $900. The policy does not disclose to an insured that the common industry standard of a 30-day waiting period in addition to the first 72 hours before settling an unrecovered theft claim results in the same 1990-era $30/day policy benefit limitation for most insureds.

In the consultations leading to the ensuing regulation designed to address unfair or deceptive tow and storage charges (O reg. 427/15), the regulation uses the language “fair value” to set expectations for industry conduct in pricing. It should only be appropriate that if claims goods and service providers are expected to charge fair value prices, that the insurance policy and insurers should provide policy benefits at fair value as well.

Whether an insurer has been able to negotiate ‘preferred pricing’ from a specific claims goods and service provider should have no bearing on determining reasonable consideration from another. Neither the insured or another claims goods and service provider is party to the negotiations or benefits directly from the relationship. It is important that the proposed UDAP rule reference any determination of ‘reasonableness’ or ‘fairness’ to fair market values, rather than proprietary, internally negotiated rates with no public access.

In the 30 years since the introduction of OMPP and the continual evolution of the Ontario automobile insurance policy, we have experienced incredible technological advances. In the last 10 years, the rate of innovation has accelerated. While it is promising that aspects of the proposed rule seek to address potential innovations in terms of insurance products, it falls short in addressing innovation in other areas.

Appendix C of the proposed rule document includes the list of stakeholders consulted in the formation of the proposed rule. No representative groups from any claims service providers save the Health Service Provider Stakeholder Advisory Committee participated in the consultations. The list of stakeholders is likely similar in content to the same lists created 30 years ago for the OMPP consultations. Uses and ownership structures of vehicles have changed in 30 years. Technology has made it quick and easy to share timely information. The technology within vehicles has changed dramatically as has their complexity and repair expense. In terms of identifying the root causes of unfair or deceptive practices, addressing regulation of multiple industries, and facilitating transparency and flexibility, to look forward, one needs more than reliance on legacy stakeholders. Nowadays, with a phone-based app, any vehicle can be a rental car and any insured can instantly connect with an advisor, insurer representative or service provider of the insured’s choice. With the proposed rule’s focus on claims goods and services delivery, stakeholders from the vehicle repair, towing and/or rental industries should have been included.

Associated Canadian Car Rental Operators (ACCRO) is encouraged to see initiatives designed to reduce unfair or deceptive acts or practices however, to best achieve the goals of improved claimant outcomes, consumer protection, customer satisfaction, and operating efficiencies, FSRA and the Ontario government must engage at the principles drafting level, a properly representative group of all participating stakeholders. Renewed focus on claimant outcomes and cooperation of all participating providers of goods and services involved in claimant outcomes will encourage a departure from the all-too-frequently adversarial relationship between insurers, insureds, and claims goods and service providers.

ACCRO encourages FSRA to review our industry’s submission and consider the recommendations addressing:

• Accountability and reporting provisions for anti-competitive actions upon the claims goods and services provider marketplace to preserve the consumer’s right to choose,
• Creating an equitable framework for determining unreasonable or unfair costs,
• Engaging with additional stakeholder groups so the drafting principles properly contemplate future developments in all aspects of the consumer experience not solely those at policy inception.

Sincerely,


Craig Hirota
Associated Canadian Car Rental Operators


About ACCRO:

Associated Canadian Car Rental Operators or ACCRO is a Canadian organization that represents the united voice of the industry in Canada. ACCRO is dedicated to the continuous improvement of the Canadian car and truck rental industry through participation in legislative and regulatory consultation with all levels of government. The car and truck rental industry in Canada operates over 175,000 vehicles (pre-pandemic), employs over 16,000 Canadians, and has a total direct and indirect economic impact in excess of $10 billion annually.

ACCRO is comprised of over 98% of our nation’s Car and Truck Rental Industry. This includes all the major brands, Alamo, Avis, Budget, Discount, Dollar, Enterprise, Hertz, National, Thrifty, and U-Haul along with over 200 independently owned and operated vehicle rental companies. Our industry truly spans the range of business size classifications from large, multi-national companies with fleets in the tens of thousands to ‘mom and pop’ businesses with as few as 5 cars. Despite the vast disparity in sizes, we are all united in our goal of facilitating the mobility needs of Canada’s population

Secteur de l'assurance automobile
[2020-018] Julie Singh - Allstate Canada Group
Please find attached our submission. Thank you.
Secteur de l'assurance automobile
[2020-018] Bruce Taylor - Citizens Against Unfair Insurance Practices
See attached document...
Secteur de l'assurance automobile
[2020-018] Sam Palmerio - Desjardins General Insurance Group (DGIG)
Good morning,

On behalf of Desjardins General Insurance Group (DGIG), I am pleased to respond on the Financial Services Regulatory Authority of Ontario’s (FSRA) Proposed Rule [2020-002] Unfair or Deceptive Acts or Practices (UDAP).
Thanks,
Sam

Sam Palmerio
Manager of Government Relations
Desjardins General Insurance Group (DGIG)



Secteur de l'assurances habitation, vie et maladie
[2020-018] Susan Allemang - Independent Financial Brokers of Canada
Attached is the response from Independent Financial Brokers of Canada (IFB).
Secteur des services de soins de santé
[2020-018] Vanessa Rankin - Ontario Association of Social Workers
As a member of the Coalition of Health Professional Associations in Ontario Automobile Insurance Services (the Coalition), please find attached a comment by the Ontario Association of Social Workers in support of the Coalition's submission to FSRA on the UDAP rule.
Secteur de l'assurance automobile
[2020-018] Catherine Allman - Canadian Association of Direct Relationship Insurers
Please find following CADRI's submission on Notice of Proposed Rule and Request for Comment [2020-18].
We welcome your questions.

Secteur des planificateurs et conseilers financiers
[2020-018] Maureen Campbell - Flashlite Benefits
I am writing in regard to the proposed UDAP rule. I am very opposed to FSRA's proposal as it relates to Group Benefit plans. I am an Insurance Broker specializing in Group Benefits. By nature of my role and my professional conduct, I am an advocate for my clients and their employees. I am very intentional in my work so that my clients are fully informed about the products that they have purchased, the pricing structure of those products, the contract terms with their provider, and their administrative responsibilities as the plan sponsor. I do this in an effort to manage the financial risks and administrative liabilities for the client that are inherent in sponsoring a Benefits program. This is not a role that Insurers play so it is incumbent on Brokers to interpret and educate clients on all actions taken by their Insurer. Probably the most important is educating clients on the relationship of the Premiums paid versus the Claims made and the impact on Renewal pricing which is critical to sustaining their program from year to year.
In the last year, there has been considerable upheaval in the client community with several Group Insurers' announcements including; mandatory changes to the client contract, adding new services to clients' programs at a cost with no opt-out, fabricating client program experience for renewal calculations due to a perceived impact of Covid and launching marketing initiatives to sell insurance products directly to a client's employees. These actions by Insurers create financial and privacy exposures for the client and impacted their Renewals and were only in the best interest of the Insurer. Allowing Insurers to offer rebates directly to employers without involving their Broker so they can advise the client of all implications represents the most potential for financial risk that I have seen in our industry even given the offensive practices that are listed above.
I am happy to further elaborate if it is of value in your decision making,
Maureen
Secteur de l'assurance automobile
[2020-018] Brendan Wycks - Canadian Association of Financial Institutions in Insurance (CAFII)
Dear Mr. White:

Re: CAFII Comments On FSRA’s Proposed Rule [2020-002]: Unfair or Deceptive Acts or Practices

The Canadian Association of Financial Institutions in Insurance (CAFII) thanks FSRA for the opportunity to comment on the Authority’s Proposed Rule [2020-002]: Unfair or Deceptive Acts or Practices (UDAP).

We congratulate FSRA on developing the new draft Rule, and for involving industry stakeholders -- including our Association -- in a preliminary consultation process to that end.
Our Association concurs with FSRA that it is necessary and opportune to replace the existing, on-the-books UDAP Regulation with a new FSRA UDAP Rule under the Insurance Act; and that this initiative will move Ontario forward towards a clearly understood insurance regulatory regime that is adaptable to changing circumstances and creates conditions under which misconduct can be better identified, curbed, and sanctioned to protect the public interest.

Our feedback comments on Proposed Rule [2020-002] are set out below.

INTRODUCTION
CAFII supports FSRA’s intention to replace the Unfair or Deceptive Acts or Practices (UDAP) Regulation which it inherited from FSCO with a new FSRA Rule on the same subject.
We support FSRA’s intention to take an outcomes/principles-based approach to its Proposed UDAP Rule, which we believe will produce better results for both consumers and the industry, by facilitating innovation and responsiveness to consumer needs. We are therefore very comfortable with FSRA’s stated objective for the Proposed UDAP Rule, as follows:

Removing barriers to innovation in the area of customer incentives, including rebates and incentives provided that they:
• do not lead to decisions that are against the interests of consumers;
• are not prohibited by law;
• are transparently communicated; and
• are not unfairly discriminatory, anti-competitive or reliant on prohibited factors. (Page 2.)
CAFII encourages FSRA to ensure that its Proposed UDAP Rule is as consistent and harmonized as possible with existing guidelines, rules, and regulatory frameworks in other Canadian jurisdictions; and, as such, we support FSRA’s statement that

The first stage of drafting is also intended to further alignment with particular Canadian Council of Insurance Regulators / Canadian Insurance Services Regulatory Organizations (CCIR / CISRO) Fair Treatment of Customers (FTC) Guidance standards as appropriate, including in relation to advice, product promotion, disclosures to policy holders and customers, compliance with laws, claims handling and settlements. (Page 2)

Further, we understand and appreciate the logic of the sequential steps which FSRA plans to take for aligning its Proposed UDAP Rule with existing FTC guidance, stated as follows:

FSRA considered further convergence with CCIR / CISRO FTC Guidance. FSRA determined that doing so should be reserved for stage two given the scope of rule-making authority established by the enabling legislation, as well as a lack of conceptual alignment between the existing regulation and other components of the guidance that could potentially lead to greater compliance costs and complexity in implementation of the stage one rule.
While the logic of this phased approach makes good sense, CAFII encourages FSRA, in stage two of the Proposed UDAP Rule development, to continue to put harmonization and alignment with existing guidelines, rules, and regulatory frameworks at the front and centre of its deliberations and decision-making.

STRONG SUPPORT FOR ONTARIO’S COMMITMENT TO ALLOW FSRA TO OPERATE AN INSURANCE REGULATORY SANDBOX
CAFII was pleased to learn recently of the Ontario government’s new commitment to allow FSRA to operate an insurance regulatory sandbox, as confirmed by the following excerpt from the Proposed UDAP Rule consultation document:

FSRA’s objective of removing specific barriers to innovation through the Proposed Rule is aligned with the Ontario government’s commitment to provide the CEO of FSRA with the power to operate an insurance regulatory sandbox to pilot initiatives that bring new consumer-focused products and services to market more quickly in response to changing consumer needs. (Page 3)

We believe that regulatory sandboxes are highly beneficial because they provide a safe, monitored space for testing innovative products, services, and distribution methods which existing rules may not allow, within sandbox boundaries that are subject to regulatory oversight; and thereby, they foster and support innovation while ensuring consumer protection.

In that same vein, CAFII firmly believes that regulatory frameworks should foster an open marketplace where consumers are able to choose how and where to purchase their insurance protection.

CAFII members distribute Authorized Insurance Products “ more specifically, credit protection insurance (CPI; also known as creditor’s group insurance), other types of life and health insurance, and travel insurance via financial institution branches, direct mail, contact centres, and the internet -- and we share regulators’ objective of ensuring that consumers are protected while they purchase insurance products through their channel of choice.

It’s our view that the future of life and health insurance will be marked by continued and accelerating innovation; and that regulation should embrace the role of all distribution channels in meeting the insurance needs of consumers.

In particular, consumers continue to demand greater access to insurance information, purchasing opportunities, servicing, and claims fulfillment through digital means; and we believe that the digital space will play an ever more important role in meeting the insurance needs of Canadians.

A number of financial services regulators “ including the Financial Conduct Authority (FCA) in the UK; its counterparts in Australia and Singapore; and the Ontario Securities Commission (OSC Launch Pad) here at home “ have established regulatory sandboxes, as projects designed to help companies test innovative products, services, and distribution methods with a limited number of users, for a limited period of time.

CAFII wholeheartedly supports FSRA’s planned insurance regulatory sandbox initiative; and, in that connection, we highlight our support for the UK FCA’s stated objectives for its own regulatory sandbox:
• technology has the potential to improve not only how products and services are designed, but also how they are distributed;
• as a regulator, the FCA wants more firms to embrace innovation and it wants to work with innovators to build in consumer protection from the outset; and
• the FCA regulatory sandbox has been designed to reduce the time and potential costs of getting innovative ideas to market; and it will accelerate the testing and introduction of genuinely novel products, services, and distribution enhancements which will benefit consumers.

ISSUE OF NOTEWORTHY CONCERN FOR CAFII MEMBERS
With respect to the Proposed Rule’s section on incentives, we note the following language (quotation marks added):
7 Incentives 7(1) Payment, rebate, consideration, allowance, gift or thing of value being offered or provided, directly or indirectly, (i) as an incentive or inducement for a person to take an action or make a decision that would encourage that person to buy a product which would not, considering the options generally available in the marketplace, be recommended as a "suitable insurance product" by a reasonable person licensed to sell such an insurance product ¦
We want to draw to FSRA’s attention to the fact that the words suitable insurance product“ which imply the provision of advice to consumers -- in this definition of Incentives are problematic for Authorized Insurance Products/credit protection insurance (CPI).

The issue of concern around suitability stems from the fact that while the federal Bank Act and section 5(1) of the federal Insurance Business (Banks and Bank Holding Companies) Regulations (IBBRs) permit banks and other federally regulated financial institutions (FRFIs) to offer advice regarding Authorized Insurance Products/CPI, the offering of that advice is significantly tempered by provincial/territorial regulatory and licensing requirements.

The nature of the advice that banks/FRFIs are permitted to provide around an Authorized Insurance Product/CPI is strictly limited to the Authorized Insurance Product itself and must not include suitability-related measures such as a needs-based financial/insurance assessment, Know Your Client tools, or holistic advice.

In the case of Authorized Insurance Products/CPI, because the consumer is purchasing/enrolling in optional insurance related to a single and specific borrowing need such as a mortgage or line of credit “ and that scenario falls within the scope of activity permitted to occur through a non-advisory sales channel, i.e. the business must provide consumers with sufficient information, which meets provincial/territorial regulations and industry commitments and guidelines, to enable them to make an informed decision “ Authorized Insurance Products/CPI are typically offered by non-licenced individuals in Ontario and throughout Canada. Non-licenced individuals are strictly prohibited from offering advice and recommending an insurance product as suitable.

With respect to Authorized Insurance Products/CPI, given the prohibition against holistic advice engendered by the combination of the federal Bank Act and IBBRs with provincial/territorial regulatory and licensing requirements, banks/FRFIs legally can only ascertain a consumer’s eligibility for coverage and to make a claim at the time that an Authorized Insurance Product/CPI is being offered as optional insurance. Banks/FRFIs therefore prioritize establishing certainty of the consumer’s eligibility for coverage and to make a claim under the group CPI master policy.

This situation makes Authorized Insurance Products/CPI a unique product set “ a product set to which the concept of product suitability does not apply due to legal constraints; but a product set to which the more limited concept of eligibility for coverage and to make a claim does indeed apply as a Fair Treatment of Customers (FTC) consideration.
As a proposed solution to deal with the problematic application of the words suitable insurance product in the Proposed UDAP Rule’s subsection 7(1)(i) to Authorized Insurance Products/CPI, CAFII recommends that those words be precisely defined within the Rule “ perhaps through an approach which uses a superscript number and corresponding footnoted definition below -- and that the definition expressly state that suitable insurance product does not apply to Authorized Insurance Products as defined by the federal Bank Act and the federal Insurance Business (Banks and Bank Holding Companies) Regulations.

In that connection, we also want to bring to your attention CAFII’s strong view that any provision in the Proposed UDAP Rule or any other Regulation which would hamper the ability of consumers to obtain Authorized Insurance Products/CPI would contribute to the significant problem of Canadians being under-insured or even totally uninsured with respect to life and health insurance.

In 2019, according to LIMRA, half of Canadian adults did not own any life insurance coverage. Canadians should therefore be encouraged to obtain more life and health insurance, and the regulatory environment should foster fair treatment of consumers without inhibiting the industry’s ability to offer such coverage to Canadians. Life and health insurance coverage is already inherently challenging to offer due to the fact that contemplating one’s own mortality or the risk of contracting a serious illness or becoming disabled is not something people readily want to do.

TECHNICAL/DRAFTING ERROR ISSUE; AND RELATED UNCERTAINTY
CAFII would like to point out that the Proposed UDAP Rule consultation document’s definition of contract of insurance(found in Appendix A and Appendix B) appears to contain a drafting error, by referring to the wrong sections in the current Ontario Insurance Act. The correct sections of the Act to be referenced with respect to contract of insurance are s. 171 (found in Part V: Life Insurance) and s. 190 (found in Part VII: Accident and Sickness Insurance).

In that connection, it is not clear whether or not the Proposed UDAP Rule intends to capture creditor’s group insurance.
One of the more significant changes made when the province’s Insurance Act was amended several years ago was to introduce clarity that creditor’s group insurance is indeed included under the Act. However, those amendments did not then flow through to parallel amendments in the existing UDAP Regulation; and that may explain why it appears that creditor’s group insurance has been overlooked in the Proposed UDAP Rule.

RESPONSES TO TARGETED QUESTIONS
1. Are there any parts of the Proposed Rule that are too general or require further detail, including for the purposes of clarity or closing possible gaps?
A principles-based approach is commendable because the avoidance of prescription enables a regulator to steer clear of imposing a compliance burden upon industry players and forcing them into an inefficient allocation of resources; but ironically, on the other hand, an overly high-level approach can lead to ambiguities and uncertainties. On balance, we feel that FSRA has struck the right balance in the Proposed UDAP Rule.

FSRA’s consultations and ongoing dialogue with industry can provide greater clarity around regulatory expectations, and those measures constitute a better approach than trying to anticipate and respond to every possible eventuality. With the pace of change evident in business, technology, and society today, trying to anticipate every possible eventuality will be counter-productive and inefficient.

We also encourage enforcement of the Proposed UDAP Rule based solely upon data and objective evidence.

In a competitive environment, different industry players and channels will no doubt try to promote their own products and/or channels self-servingly, but at the end of the day consumer choice should be paramount.

The identification of problematic products, channels, acts or practices should therefore be based solely upon data and objective evidence such as complaints or clear conflicts of interest.
2. Are there any implementation considerations, such as transition issues or the coming into force date of the Proposed Rule, that interested parties would like to bring to FSRA’s attention?
We have not identified any immediate implementation or transition issues that are of concern, but we encourage FSRA to continue its open, transparent, and consultative approach, so that any unintended consequences, hiccups, or outcomes can be rapidly brought to its attention by the industry.
3. FSRA has drafted the Proposed Rule to ensure that the intent of existing consumer protection provisions is preserved where no substantive policy change is being proposed. FSRA has deliberately erred on the side of maintaining consumer protections even where they may be redundant given other aspects of the Proposed Rule. An example includes provisions related to non-compliance with the Statutory Accident Benefits Schedule in section 5 (Unfair Claims Practices) given the contents of section 3 (Non-Compliance with Law). Are there sections of the Proposed Rule that are redundant and can be removed without compromising consumer protection?
We believe that the best approach to deal with possible redundancies is to reject a once and done approach; and instead view the UDAP Rule, and more generally all of FSRA’s Rules and Regulations, as iterative, living, and readily amendable documents. In that regard, CAFII supports the staged approach that FSRA has espoused because we believe it will allow for post-implementation adjustments based on the experience of both FSRA and the industry.
4. Are there any other issues or amendments to the Proposed Rule that FSRA should consider as it proceeds to its intended second stage of work in this area?
CAFII has no other issues or amendments to the Proposed Rule to raise for FSRA’s consideration at this time.

Conclusion
As part of our concluding remarks, CAFII would like to reiterate a constructive comment we offered in our November 18, 2019 submission on FSRA’s Draft 2020-21 Priorities and Budget. We noted then that while FSRA has certain rule-making authority, the extent of that authority in the life and health insurance sector is limited. CAFII believes that FSRA’s securing of greater rule-making authority for life and health insurance will give the Authority the nimbleness and flexibility required to respond to industry developments more quickly. We therefore encourage FSRA to work on obtaining additional rule-making authority for life and health insurance through the appropriate government channels.

Thank you again for the opportunity to provide input and feedback on FSRA’s Proposed Rule [2020-002]: Unfair or Deceptive Acts or Practices. Should you require further information from CAFII or wish to meet with representatives from our Association on this or any other matter at any time, please contact Keith Martin, CAFII Co-Executive Director, at [email protected] or 647-460-7725.

CAFII and its members remain committed to supporting FSRA in its critically important mission and mandate; and we look forward to continuing our involvement as key stakeholder contributors to the Authority’s ongoing success.

Sincerely,
Rob Dobbins
Board Secretary and Chair, Executive Operations Committee

About CAFII
CAFII is a not-for-profit industry Association dedicated to the development of an open and flexible insurance marketplace. Our Association was established in 1997 to create a voice for financial institutions involved in selling insurance through a variety of distribution channels. Our members provide insurance through client contact centres, agents and brokers, travel agents, direct mail, branches of financial institutions, and the internet.

CAFII believes consumers are best served when they have meaningful choice in the purchase of insurance products and services. Our members offer travel, life, health, property and casualty, and credit protection insurance across Canada. In particular, credit protection insurance and travel insurance are the product lines of primary focus for CAFII as our members’ common ground.

CAFII's diverse membership enables our Association to take a broad view of the regulatory regime governing the insurance marketplace. We work with government and regulators (primarily provincial/territorial) to develop a legislative and regulatory framework for the insurance sector that helps ensure Canadian consumers get the insurance products that suit their needs. Our aim is to ensure appropriate standards are in place for the distribution and marketing of all insurance products and services.

CAFII’s members include the insurance arms of Canada’s major financial institutions “ BMO Insurance; CIBC Insurance; Desjardins Insurance; National Bank Insurance; RBC Insurance; ScotiaLife Financial; and TD Insurance “ along with major industry players Assurant; Canada Life Assurance; Canadian Premier Life Insurance Company; CUMIS Services Incorporated; Manulife (The Manufacturers Life Insurance Company); Sun Life; and Valeyo.
Date posted Secteur Question et réponse
Secteur de l'assurances habitation, vie et maladie

Question: As an adjuster who receives regular updates on the fiscal status of the industry and of individual insurers, and with all of the complaining by insurers about the auto industry not being a feasible component of their overall business, due to 'rising' claim costs and fraud, thus their never-ending petitions for rate increases, would you have the thinking public attempt to believe that insurers would now give back rebates to consumers without somehow hiding these expenses in the premiums and their never-ending increases?
Would insurers truly give back 'would-be profits' over their number one priority, their shareholders'?
This shall be a tough swallow for the public, but I am excited to see activity amongst those who should monitor behaviours of financial institutions for the benefit of those whom enable their existence and profiting..

FSRA réponse:

The new rule would allow insurers to offer rebates and incentives to consumers so long as those incentives: 
•    do not lead to decisions that are against the interests of consumers;  
•    are not prohibited by law;
•    are transparently communicated; and
•    are not unfairly discriminatory or anti-competitive.

FSRA does not expect the proposed changes to affect rates or make premiums go up. By allowing more competition and innovation, and setting clear standards for consumer protection, the proposed rule is intended to benefit consumers. 

Secteur de l'assurances habitation, vie et maladie

Question: Is the thought that this would extend to group insurance (employee benefit plans) seeing this kind of rebating?

Would this allow insurers to offer things like 2 months premium free, if you sign up with them?

These rates are experience rated so it may appear that there is no long term rate change, but this would have a considerable effect on the renewal rates (as they are calculated based on paid premium and claims) thereby affecting not just employers but the employees that often share the cost of the premium.

This is deeply concerning that our regulator would put so many small businesses and consumers at risk, if this were the case.

FSRA réponse:

The new rule would allow insurers to offer rebates and incentives to consumers so long as those incentives: 
•    do not lead to decisions that are against the interests of consumers;  
•    are not prohibited by law (for example, Agents Regulation 347/04);
•    are transparently communicated; and
•    are not unfairly discriminatory or anti-competitive.

FSRA will be looking into the specific issues that you have raised. 

Secteur des planificateurs et conseilers financiers

Question: Will the new legislation impact A&S and Life Insurance MGAs, AGAs, Advisors and Clients; specifically with fair practices between these entities, versus Insurers and Consumers? Thank you!

FSRA réponse:

Section 439 of the Insurance Act prohibits “unfair or deceptive acts or practices”. O. Reg. 7/00 (UDAP regulation) under the Insurance Act prescribes specific actions that are considered as unfair or deceptive. The regulation may apply to insurers, brokers, intermediaries, adjusters, and goods/service providers engaged in the insurance sector such as health service providers, vehicle repair shops, automobile storage facilities, and tow truck operators.


Yes, the new rule will impact intermediaries in the life and health insurance sector. 
Intermediaries also share the responsibility for treating consumers fairly and ensuring strong consumer protections; therefore they should not be contributing to outcomes that are unfair or otherwise harmful to consumers. 

Secteur de l'assurances habitation, vie et maladie

Question: I'm curious as to the reason why rebating is now something that FSRAO would like to allow, when the previous regulator had it as a cornerstone that rebating would be considered unethical? Thank you.

FSRA réponse:

FSRA is taking a principles-based approach to rebates and incentives rather than supporting an outright prohibition. The new rule would allow insurers to offer rebates and incentives to consumers so long as those incentives: 
•    do not lead to decisions that are against the interests of consumers;  
•    are not prohibited by law;
•    are transparently communicated; and
•    are not unfairly discriminatory or anti-competitive.
 
Subject to meeting certain fair treatment standards outlined in the proposed rule, further examples include (but are not limited to):
•    An insurer could offer their customer a rebate on their auto policy premium for good driving behaviour
•    An insurer could provide a consumer with a paid-for/subsidized plumbing inspection to help mitigate the risk of water damage-related losses
•    An insurer could reward a consumer with a gift card for behavior that reduces insured risk

Question: When is FSRAO going to really focus some attention on the Property sector? Property losses amount to millions of dollars in claims. Residential and Commercial property losses involve my client's biggest assets and the manner in which many insurers and their preferred vendors conduct themselves can be very adversarial, intimidating, and antagonistic. More importantly, it is causing harm to the public. There are several insurers through their appraisers and some of their vendors, who think of themselves as above the law because the Ontario Insurance ACT has failed property owners in its administration and enforcement and does not hold the insurance companies accountable for delays, denials, and numerous other underhanded tactics that are used against policyholders. IT IS TIME FOR CHANGE! It is supposed to be a fair, fast, and efficient method to settle disputes. When can we expect a review and overhaul?

FSRA réponse:

The proposed rule focuses on the need for stronger consumer protections by clearly defining outcomes that are unfair or otherwise harmful to consumers. It will improve the identification, deterrence and sanctioning of misconduct, including abusive claims practices, to better protect the public interest. 

FSRA’s mandate under the FSRA Act includes promoting high standards of business conduct. In addition, our proposed statement of priorities for 2021-22 includes a focus on protecting the public interest by, among other things, developing and publishing a FSRA complaints framework and implementation plan for regulated sectors. 

If you have concerns about the conduct of an insurer please contact us.

Question: I am submitting this question on behalf of the Third Party Administrators Association of Canada (https://www.tpaac.ca/).
We applaud FSRAO for taking further steps to develop principles-based regulations and protect consumers from unfair or deceptive practices.
Our specific question centres on the proposal to allow insurers to introduce incentives, including rebates and rewards. The link to your UDAP rule shows the sector as "auto insurance". Our members and customers are in the Life/Health sector and specifically are primarily engaged in the distribution and administration of employee benefits programs across Canada. We would certainly have comments about allowing incentives if FSRAO sees it applying to the employee benefits sector.
However, given the sector is noted as auto insurance and the incentive examples provided are for the P&C sector, we wanted to seek this clarification first before providing any submission.
We look forward to your comments.
All the best.
Mike McClenahan, President
TPAAC

FSRA réponse:

Although the public consultation for the Unfair or Deceptive Acts or Practices (UDAP) Rule is classified under the ‘Auto Insurance Sector’ on FSRA’s website, it applies to everyone. Section 439 of the Insurance Act prohibits “unfair or deceptive acts or practices” and O. Reg. 7/00 (UDAP regulation) under the Insurance Act prescribes specific actions that are considered as unfair or deceptive, and may apply to insurers, brokers, intermediaries, adjusters, and goods/service providers engaged in the insurance sector such as health service providers, vehicle repair shops, automobile storage facilities, and tow truck operators.

Yes, the new rule will impact intermediaries in the life and health insurance sector. Intermediaries also share the responsibility for treating consumers fairly and ensuring strong consumer protections; therefore they should not be contributing to outcomes that are unfair or otherwise harmful to consumers.

Secteur de l'assurances habitation, vie et maladie

Question: I see many responses by FSRA as:
The new rule would allow insurers to offer rebates and incentives to consumers so long as those incentives:
• do not lead to decisions that are against the interests of consumers;
• are not prohibited by law (for example, Agents Regulation 347/04);
• are transparently communicated; and
• are not unfairly discriminatory or anti-competitive.
FSRA will be looking into the specific issues that you have raised.

1. What about the livelihood of the agent or broker, since the rebating with affect commissions and/or chargebacks?
2. What keeps the insurer from offering a discount to clients if they renew their Life Insurance policy directly with the insurer as opposed to through their broker?
3. As I see in the wording, this is for the Insurers. Why would brokers not be able to offer an incentive or "rebating", if it is in the best interest of the client?

Thank-you for your time.

FSRA réponse:

Section 439 of the Insurance Act prohibits “unfair or deceptive acts or practices” and O. Reg. 7/00 (UDAP regulation) under the Insurance Act prescribes specific actions that are considered as unfair or deceptive, and may apply to insurers, brokers, intermediaries, adjusters, and goods/service providers engaged in the insurance sector such as health service providers, vehicle repair shops, automobile storage facilities, and tow truck operators.

Under the proposed Rule, an incentive or rebate would be permitted if it meets the requirements as outlined in section 7 (Incentives). The requirements are meant to protect the rights and interests of consumers. One such requirement is compliance with the law– for example, under the Insurance Act’s Agents Regulation 347/04 and Registered Insurance Brokers Act’s General Regulation 991, life insurance agents, and brokers, are prohibited from offering incentives / rebating.

Secteur de l'assurance automobile

Question: 1. What are the specific measures to determine the proposed policy will successfully "foster strong, sustainable, competitive, and innovative financial service sectors"?
2. Based on those measures, what are the specific repercussions for companies that fail to innovate or compete?
3. In keeping with the emphasis on transparency, what are the anticipated timelines and methods of updating the industry and public regarding the measured results of the proposed policy?
4. What are the specific repercussions for companies that fail to innovate or compete?
5. What specific repercussions can consumers expect from FSRA and its policymakers for an ineffective policy?
6. Is the new proposed policy and admission of previous FSRA/FSCO policies creating barriers to competition which has ultimately resulted in unnecessarily increased consumer premiums?

FSRA réponse:

FSRA is still planning for implementation of the rule and are considering performance metrics that can be used to measure outcomes of key proposed changes in the rule. Once the rule comes into force, FSRA will implement an evaluation strategy to assess if intended outcomes are being achieved. For example some metrics that FSRA may consider in order to evaluate whether the proposed rule is helping to foster innovation would be the number of new innovative models that are being offered by insurance companies as a result of the new rule, and the percentage of policies benefited through these new programs.

By allowing more competition and innovation, and setting clear standards for consumer protection, the proposed rule is intended to benefit insurers and consumers alike. Also, FSRA’s objective of removing specific barriers to innovation through the proposed rule is aligned with the Ontario government’s recent commitment to encouraging innovation and competition in the insurance sector.

We understand transparency strengthens our accountability to consumers for protecting the public interest. We will be re-engaging the public on this topic in the future as part of our staged approach, and we will also publish results of the consultation on the Stage One rule as part of our staged approach.

We are not aware of evidence showing that the existing UDAP regulation directly increased premiums paid by consumers. We have received input from stakeholders that the existing regulation is overly prescriptive and a barrier to innovation, particularly with respect to incentives (including rebates and inducements).

Secteur de l'assurance automobile

Question: Why do insurance companies continue to get away with dumping accident victims into the already failed welfare system?

FSRA réponse:

The proposed Unfair Deceptive Acts or Practices (UDAP) rule includes provisions to protect consumers against unfair claims practices, in particular those associated with the SABS. The proposed rule, that may apply to anyone engaged in the business of insurance, states that the resolution or delay in the adjustment or settlement of any claim which would be considered unreasonable or unfair is a UDAP. Examples of such conduct include - treating a claimant in an arbitrary, capricious or malicious manner; seeking a result which is inequitable or inconsistent with the rights of the claimant under the contract.

Those who have questions about the sectors FSRA regulates, want to report a case of fraud, or wish to file a complaint against a FSRA regulated company or professional, can contact FSRA @ https://www.fsrao.ca/ask-question-file-complaint-or-report-fraud