Auto insurance is mandatory to operate a vehicle in Ontario. FSRA is taking steps to ensure that all consumers can get the best product at the best price available when they purchase or renew their auto insurance policy.
Take-All-Comers Guidance:
FSRA’s “Take-All-Comers” guidance helps to prevent activities that prevent or frustrate consumers efforts to purchase or renew their auto insurance when they would otherwise qualify for a quote or renewal. For example, insurers are required by law to offer the lowest rate available for each consumer’s circumstances and must accept all auto insurance business from consumers that meet their approved rules.
Thematic review:
Early in our mandate as the new regulator, FSRA became aware of certain business practices being used which appeared to contravene the Take-All-Comers requirement. We undertook a broad thematic review which included public consultations, insurer examinations and a regulatory self-assessment.
Our review confirmed that there was intentional non-compliance industry-wide. Instead of filing new underwriting rules for approval by FSRA, insurers chose to engage in non-transparent and illegal practices that made it more difficult for certain types of consumers to get auto insurance quotes. This systemic non-compliance led to consumer harms, unfair competition, and diminished market health.
Read FSRA’s thematic review to learn how FSRA addressed Take-All-Comers non-compliance to better protect consumers.
Non-compliance:
FSRA will continue to supervise insurers to ensure compliance with the “Take-All-Comers” requirement.
FSRA can take a variety of regulatory enforcement actions, depending on the nature and severity of the non-compliance. Reponses to misconduct can range from education and remediation action to regulatory intervention. This includes administrative monetary penalties, as well as other sanctions such as License Revocation, Conditional Licenses or Compliance Orders, to influence marketplace behaviour.
The Insurance Act has consumer protection features supported by specific legal requirements. It seeks to ensure eligible consumers can buy or renew an auto insurance policy at the approved terms and price. When taken together, these consumer protection features comprise Ontario’s “Take All Comers” rule.
Specific consumer protections of the “Take-All-Comers” rule include:
insurers are required to offer the lowest rate available for each consumer’s circumstances
insurers are required to offer their customer a renewal if that customer continues to meet that insurer’s eligibility rules
insurers must accept all auto insurance business from consumers that meets their approved rules
A delay in providing a quote is effectively declining coverage and can only be done on FSRA approved declination grounds.
Protecting consumers is FSRA’s mandate and top priority.
Work on Take-All-Comers began as part of FSRA’s 2019-22 inaugural Annual Business Plan. We undertook a thematic review of Take-All-Comers, which confirmed that there was intentional non-compliance industry-wide. FSRA responded by taking immediate action to restore compliance and consumer trust in the system.
As part of the “Take-All-Comers” review FSRA held public consultations in March 2020. It received comments and submissions from consumers and members of the auto insurance industry, including brokers, insurance companies and trade associations. They brought forth valuable insight about current practices and recommendations to further protect Ontario’s auto insurance consumers.
Following public consultations, and as part of an overall effort to strengthen compliance standards, FSRA examined the largest 12 auto insurers, agents and brokers. Additionally, FSRA released the “Take-All-Comers” guidance. The “Take-All-Comers” guidance reiterates that auto insurance providers must provide all Ontario consumers with access to timely auto insurance quotes and the lowest rates available to them.
FSRA required insurance companies to take steps to get back into compliance in a reasonable timeframe. Their internal audit functions would then validate that they had in fact achieved full compliance with the “Take-All-Comers” requirements.
FSRA identified several practices in the market which contravened the “Take-All-Comers” rule. For example, some insurers avoided issuing auto insurance quotes to people who:
experienced a prior accident benefits loss, including individuals who were not at fault for the prior accident such as passengers and pedestrians
were not purchasing a property policy (e.g., homeowner’s insurance)
reside in certain Ontario municipalities
had less than one year of history as an insured under an automobile insurance policy in Canada
FSRA identified several activities through our public consultation and supervisory assessments that contravened the “Take-All-Comers” requirement, such as:
Failing to offer a renewal to qualifying customers, including customers who had not missed a single premium installment payment.
Requiring consumers to complete written applications for reasons that were seemingly arbitrary or could not be characterized as exceptional and warranted by the risk presented.
Revoking or qualifying underwriting authority insurers granted to brokers and agents for reasons inconsistent with their filed and approved underwriting rules.
Failing to respond to qualifying customers’ quote requests in a commercially reasonable timeframe.
Refusing to quote or renew for reasons not listed in the insurer’s approved underwriting rules on file with and approved by FSRA.
Using third-party, web-based quoting systems/aggregators to filter out less-desirable sales leads.
Consumers can expect that FSRA will continue to act within our authority to supervise and enforce the “Take-All-Comers” requirement to protect their right to fair, timely and transparent access to auto insurance.
FSRA’s supervisory tools, including our new whistle-blower protection program, will help to identify non-compliance in the marketplace earlier by enabling us to better deter, detect, and respond to “Take-All-Comers” contraventions and influence market behaviour. FSRA is also committed to further “Take-All-Comers” compliance, which includes, but is not limited to, following up with insurers to confirm planned remedial actions have been implemented, continuing collaborative work with the Registered Insurance Brokers of Ontario (RIBO), conducting ‘secret shopper’ initiatives and taking decisive enforcement action when necessary.
