This summer, the threat of a labour stoppage at Canada Post has caused many people and institutions to reconsider just how crucial mail delivery is to their business. In the insurance industry, we have already taken great strides to minimize…Read more →
This week, the Ontario amended Regulation 664 to expand the definition of a fleet to accommodate ride-sharing services like Uber. The change opens the door for insurers to offer policies to drivers of vehicles for hire using an online app.
The regulation amendment expands the fleet definition to include vehicles available for hire through a common online-enabled application or system for the pre-arrangement of transportation. The vehicle owner or lessee is to be named insured under an auto insurance contract. The regulation change will make it easier for Ontario businesses to insure a group of privately owned vehicles under one insurance policy as a “fleet” when they are available for hire using an online app.
FSCO has already approved a fleet policy proposed by Intact Insurance Company. The Intact policy provides blanket fleet coverage under a standard automobile owner’s policy (OAP 1) for private passenger automobiles used in the transportation of paying passengers who utilize Uber.
The Intact fleet policy does not provide coverage when the driver is not logged onto the Uber online app. Coverage under the personal owner’s policy for the automobile is applicable.
FSCO also approved the use of an electronic insurance card for use in connection with ride sharing. The electronic insurance card will permit ride share drivers who are covered under the Intact policy the option to provide evidence of insurance electronically using an online-enabled app (e.g., to law enforcement officials).Read more →
The Ontario government should establish a new organization that would perform the functions currently performed by the Financial Services Commission of Ontario (FSCO) and the Deposit Insurance Corporation of Ontario (DICO), an expert advisory panel said in a report released Monday.
The panel recommends that a new Financial Services Regulatory Authority (FSRA) be established, and it should exercise both prudential and market conduct functions. The panel – comprised of George Cooke, James Daw and Lawrence Ritchie – made its recommendation to create FSRA in an interim report released in November, 2015. The final report, dated March 31, was made public Monday and contains 44 recommendations.
The mandate review was partly made necessary with the transfer of responsibility for operating an auto insurance dispute resolution system from FSCO to Ministry of the Attorney General’s Licence Appeal Tribunal on April 1, 2016.
The report suggests that FSRA should consolidate functions, but it should have separate divisions for the regulation of market conduct; prudential oversight; and pension administration. These divisions of the regulator should operate in a coordinated manner, but each division should be insulated from the routine regulatory activities, pressures and resource demands of other divisions.
FSRA should be a self-funded corporation without share capital, operationally independent of government, yet accountable to the Legislature through the Minister of Finance. The FSRA should be outside of the Ontario Public Service and be empowered to hire its personnel from outside of the Ontario Public Service’s collective agreements, compensation restraints, and other hiring restraints to support its ability to recruit professionals and industry expertise as it deems necessary.
FSRA should have a skills-based Board of Directors appointed by the Lieutenant Governor in Council. The Board would oversee FSRA’s operations and the Board should have the authority to appoint a Chief Executive Officer (CEO). The Board Chair should report directly to the Minister of Finance.
FSRA’s Board should be given authority to make rules that would be enforceable pursuant to the statute, having a similar authority as Cabinet Regulations.
Auto Insurance Rate Regulation
The panel did not make any recommendations with respect to the prior approval of auto insurance. However, it did recommend that FSRA’s Board should be obliged and empowered to decide how auto insurance rates are to be regulated and make use of its rule-making authority to scope out a rate approval process.
The view of the panel is that when it comes to the regulation of automobile insurance rates, FSCO is not ultimately protecting the public interest or enhancing confidence in the sector.
Motor Vehicle Accident Claims Fund
The panel recommends that responsibility for operating the Motor Vehicle Accident Claims Fund (MVACF) be transferred to the Facility Association (FA), a non-profit organization funded by automobile insurers in the provinces and territories that operate private insurance systems. This responsibility would fit well with the FA’s original purpose, which is to act as the ‘insurer of last resort’ for high-risk drivers. The FA already operates uninsured motorist funds similar to the MVACF in the Atlantic Provinces.
The panel indicated that the new mandate should require FSRA to utilize its statutory authorities to adequately, firmly and consistently discourage fraudulent activities or behaviours that mislead or harm consumers and pension plan beneficiaries.
FSRA should be directed to identify and seek to eliminate gaps in protection for consumers who might be defrauded by licensed sales agents, brokers and corporations. FSRA should also have the authority to establish a fraud compensation fund such as exists in Quebec if or where enhancements to mandatory insurance coverage would not fully close current gaps.
There is no word from the government on implementing the panel’s recommendations.Read more →
In two weeks, I will be at the IASA Annual Conference in San Antonio, Texas. I’ll be on Panel 674, talking about “True Customer Centricity” (and our 2015 study, “Capturing hearts, minds and market share“), but of course will also be discussing our new study, “Cyber and beyond”, which will be published during the conference. […]Read more →
At Amplify 2016, I attended several insurance-focused sessions, including hosting an industry dinner. I came away from the conference with three key observations: Insurers are eager to use mobile to initiate and sustain industry-leading digital customer engagement. The trick for insurers is seamlessly merging a customer‘s various digital and physical interactions into one unified and […]
The post How to Create Industry-Leading Digital Customer Engagement appeared first on Insurance Industry.Read more →
In an earlier blog, I discussed the impending changes to the Ontario automobile insurance product and the opportunity for brokers to demonstrate to their customers the value of a broker’s expert advice. There is another side to that coin. It…Read more →
Your professional development has never been more cutting-edge. Consider the fascinating research of Qui Trieu, manager of personal insurance at Perth Insurance, a wholly owned subsidiary of Economical Insurance. Qui (pronounced as ‘key’) is currently a candidate in the Insurance…Read more →
The release of our upcoming study on the risks of digital interconnectedness, a.k.a. cyberrisks, is just 5 weeks away; time to give our readers a first peek at some of the data and/or conclusions. For the study, we surveyed 800 insurers and 1,000 non-insurance companies, Continue readingRead more →
Along with claiming a reported 49 lives (at time of posting), injuring thousands and causing between $1.7- and $2.9 billion in insured damage (according to AIR), the April 14 (UTC) 6.4Mw and April 15 (UTC) 7.0Mw earthquakes in Kumamoto, Japan…Read more →
FSCO’s latest quarterly rate approval numbers have been released and suggest that some savings have been accrued from the statutory accident benefit cuts that become effective on June 1.FSCO approved 50 private passenger automobile insurance rate filin…Read more →
You’ve probably heard this little chestnut on at least a few occasions: “Our underground storm sewers can’t handle the rainfall we get these days.” The implication is that under climate change and with increased runoff in urban centres from the…Read more →
A couple of posts ago (Why ‘just-in-time’ insurance would be a non-starter) I answered a question that I get asked at least a few times a year: ‘Why not allow consumers to purchase insurance just before a foreseeable loss is…Read more →
For our Random Thoughts post today, I thought I’d summarize interesting reads my colleagues at IBV published over the last year (and some of mine, too ). Let’s start cross-industry: About a year ago, Carolyn Baird showed the “Myths, exaggerations and uncomfortable truths” about millennials Continue readingRead more →
If the broker distribution model is to remain dominant in the face of an expanding direct channel, brokers will need to find a way to distinguish themselves from direct writers in something other than price. In my view, the winning…Read more →