FSRA Stakeholder Advisory Committee for Property & Casualty Insurance

Summary of the Meeting of November 23, 2020
Via Teleconference

Stakeholder Advisory Committee Members Present:

Lynn Anderson – Economical
Joseph Carnevale – IBAO
Koker Christensen – Fasken Martineau DuMoulin
Kim Donaldson – IBC
Stephen A. Fuller – Travelers
Lisa Guglietti – Cooperators
Christian Jobidon – Desjardins
Marc Lipman – AIG
Julie Nolette – Intact
Karin Ots – Aviva
Alain Thibault – CADRI

Board Members Present:

Bryan Davies – Chair of the Board
Kathryn Bouey – Director
Blair Cowper-Smith – Director
Joanne De Laurentiis – Director
Joseph Iannicelli – Director
Stewart Lyons – Director
Brigid Murphy – Director
Lawrence Ritchie – Director
Brent Zorgdrager – Director

Management Members Present:

Mark White – Chief Executive Officer
Tim Bzowey – Executive Vice President, Auto/Insurance Products
Huston Loke – Executive Vice President, Market Conduct
Glen Padassery – Executive Vice President, Policy & Chief Consumer Officer
Judy Pfeifer – Chief Public Affairs Officer
Stuart Wilkinson – Director, Auto/P&C Policy

Corporate Secretary’s Office:

Alena Thouin – Corporate Secretary and Deputy General Counsel
Margaret Kingerski – Assistant Corporate Secretary

General Comments

The Chair of the Board called the meeting to order and provided introductory remarks. The members were advised that the FRSA Board of Directors had resolved to extend their term for an additional year.

The Committee thanked the Board and FSRA for their willingness to engage with the Committee and industry as a whole. The Committee recognized that FSRA has had many positive accomplishments, including rate regulation reform, consumer education and fraud prevention. They were disappointed that there had been no revision to Health Claims for Auto Insurance (HCAI) codes in order to address virtual delivery of service.

The Committee supported the innovation work and suggested that FSRA seek ways for the industry to experiment with ideas in a manner that also protects consumers. They welcomed the removal of restrictions on usage-based insurance, but expressed concern about the time required to engage in a rigorous review.

The Committee noted that COVID-19 has resulted in a drop in auto insurance premiums. However, years of rigid regulation in the sector has left consumers with many unnecessary costs, and the root sources of inflation remain present.

The Committee welcomed the commitment to auto insurance modernization in the recent Ontario Budget, but questioned the rationale for excluding reforms to accident benefits coverage. This area has long been a source of instability with respect to insurance premiums; it is overused which often leads to disputes. Physical damage costs have also grown significantly.

The Committee would like to work with FSRA as the agency builds data capacity. It recommended that FSRA create an advisory group to discuss trends in auto claims.

Regarding commercial insurance affordability and availability, it was noted that FSRA and the Board could facilitate productive discussions with the industry and government. The Committee advised that further regulation would not be beneficial or necessary at this time. The industry has offered assistance to consumers, but could promote its activities better.

Feedback on Draft F2021–2022 Priorities and Business Plan

The Committee provided feedback on the draft F2021-2022 Priorities and Business Plan. It was pleased to see that assessments had been reduced and inquired about the allocation for prudential regulation. FSRA management noted that investments were necessary, but substantive growth in this area is not anticipated. Also, cost allocation in the budget will refine over time with increasing accuracy. The Committee expressed support for this additional precision.

The Committee had questions with respect to the allocation of costs for the Innovation Office, specifically how market entrants will be treated. FSRA management advised that costs are currently allocated across all sectors, although that may change in the future.