Helping consumers get access to auto insurance rates that are just and reasonable
To help consumers get access to auto insurance rates that are just and reasonable the Financial Services Regulatory Authority of Ontario (FSRA) is releasing its annual review guidance and benchmarks.
FSRA uses these benchmarks to review an insurance company’s proposed rate changes and evaluate developments and trends within the auto insurance industry.
FSRA continues to evaluate and enhance its processes to achieve regulatory efficiency and effectiveness. FSRA will continue to consult annually and update its benchmarks twice a year.
New this year:
- COVID-19 changed the way people work. Although claims severity increased, FSRA found that claims frequency in 2022 was not fully returning to the pre-pandemic levels for Bodily Injury, DCPD, Accident Benefits and Collision coverage. As more people shift to the hybrid work model, this may be the “new normal” moving forward. Insurers are expected to examine their claim frequency data and adjust to the “new normal” changes.
- FSRA completed its review of territory rating in auto insurance. We concluded that the current territory requirements are outdated and inconsistent with FSRA’s principles-based regulatory framework. FSRA is working on a territory implementation plan to address this, which will allow participating auto insurers to propose territory rating changes through its Test and Learn Environment.
- FSRA will now allow industry advisories to submit auto insurance rates for review. Once industry advisory rates receive FSRA’s approval, insurers will be able to adopt these rates. Insurers can also use them as a reference for assessing their own average premiums within the marketplace.
- We continue our work on the Operational Risk Management (ORM) framework to improve the auto insurance rating and underwriting process. FSRA surveyed the largest 14 auto insurance companies to understand their current ORM practices. These findings will help shape our ORM guidance which will promote just, reasonable and accurate auto insurance rates. It will also support the fair treatment for consumers engaged in the underwriting process.
- Approach Guidance Ontario private passenger automobile annual review based on industry data as of December 31, 2022.
- Ontario Private Passenger Vehicles Annual Review
- Benchmarks Consultation Summary
- Pinnacle Territory Guidance – Principles-Based Framework Report
FSRA continues to work on behalf of all stakeholders, including consumers, to ensure financial safety, fairness, and choice for everyone.
Learn more at www.fsrao.ca.