Shaping the future of territory rating in auto insurance through innovation

The Financial Services Regulatory Authority of Ontario (FSRA) wants to make sure everyone pays a fair price for car insurance. FSRA is launching a Test and Learn Environment (TLE) to look at various ways to apply territory ratings.

FSRA believes this approach will help foster innovation and modernize the outdated territory rating system currently being used. The Territories Test and Learn Environment follows upon FSRA’s review of territory rating, which was completed in August 2023, in response to the Ministers’ request.

To start, the Territories Test and Learn Environment will provide participating auto insurers an opportunity to propose and test territory rate changes within the Greater Toronto Area (GTA) for Private Passenger Vehicles (PPA) over a minimum two-year period. The program may expand to other regions over time. Rate changes will not be implemented until July 2, 2024, to ensure a level playfield.

FSRA will proactively monitor the impact of territory rating changes within the Territories Test and Learn Environment to ensure the intended regulatory outcomes, such as fairness, are achieved. FSRA will eventually publish the results from the Test and Learn Environment on our website.

As of January 3, 2024, FSRA will begin accepting rate filing applications from regulated auto insurers who would like to participate.

FSRA’s Innovation Office enables responsible innovation in Ontario’s financial services sector. The Territories Test and Learn follows the expectations and guiding principles set out in FSRA’s Innovation Framework and Test and Learn Environment (TLEs) for Financial Services Innovation Approach Guidance. FSRA’s approach to innovation and modernization must ultimately benefit the public and consumers.

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FSRA continues to work on behalf of all stakeholders, including consumers, to ensure financial safety, fairness, and choice for everyone.

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