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Opportunities: Insurance
Actions in progress
Allow insurance companies to do business with clients electronically
Status: Action in progress
What we heard
Rules under the Insurance Act, the Compulsory Automobile Insurance Act and related regulations prevent insurance companies from communicating or completing transactions with customers electronically. Insurance companies should be able to provide contracts, termination of insurance, and notice of disputes through electronic channels. In addition, the government should permit the use of electronic insurance cards (e-cards) as proof of insurance. The current rules restrict timely and efficient communication with customers, hamper innovation and add to business and environmental costs.
Our plan
As announced in the 2017 Ontario Budget, the Ministry of Finance — recognizing that allowing insurance companies to distribute documents electronically would enhance consumer convenience — is working to give drivers the option of using electronic proof of car insurance instead of traditional paper copies beginning later in 2017. As well, a review of how insurance companies may serve clients more online could take place as part of the government’s work to establish the Financial Services Regulatory Authority of Ontario.
Create a plain language definition of an off-road vehicle
Status: Action in progress
What we heard
Current regulations do not clearly define what is considered an off-road vehicle.
Our plan
The Ministry of Transportation will review its public education materials with its partners to determine if the definition of an off-road vehicle, set in the Highway Traffic Act, Off-Road Vehicles Act, and Insurance Act, should be updated. In the short term, it will increase promotion of existing resources, especially the Smart Ride Safe Ride ATV / ORV brochure. If a revised off-road vehicle definition is required, the ministry will update its public education materials by the end of 2017.
Actions tracking
Review the Insurance Act to allow more innovative pricing and business models
Status: Action tracking
What we heard
A number of rules under the Insurance Act prevent insurance companies from experimenting with new pricing or distribution models. In addition, the Financial Services Commission of Ontario must approve all price adjustments, which makes the process more complicated and lengthy for insurance companies.
Our plan
The Ministry of Finance has received similar recommendations from various expert advisor reports, including a 2017 report by David Marshall, Ontario’s advisor on auto insurance and pensions. Ontario will be consulting on that report’s recommendations later in 2017.
Clarify dispute resolution timelines in the Insurance Act
Status: Action tracking
What we heard
Dispute resolution timelines under the Insurance Act are perceived to be unclear and inconsistently enforced. This can delay dispute resolution unnecessarily.
Our plan
The Ministry of Finance will work with the Financial Services Commission of Ontario (FSCO) and insurers to consider regulatory amendments to clarify dispute resolution timelines over the summer and fall of 2017. It will also discuss the development of a FSCO communication to insurers clarifying their dispute-resolution requirements.
Review the benefits and risks associated with requiring insurers to use a roster of designated health care providers
Status: Action tracking
What we heard
Insurance companies can only use healthcare professionals and facilities from a designated roster. This is viewed as inefficient.
Our plan
Insurance companies are not required to use healthcare professionals and facilities from a designated roster.
The Ministry of Finance will investigate hospital-based independent examination centres as part of consultations on the recommendations contained in a 2017 report by David Marshall, Ontario’s advisor on auto insurance and pensions. It will also evaluate the feasibility of rosters of qualified health providers with the Financial Services Commission of Ontario, insurers and the Ministry of Health and Long-Term Care.
Amend the rules for determining fault in an auto accident to include distracted driving
Status: Action tracking
What we heard
Determining fault in auto accidents does not include distracted driving and this does not support current government priorities to reduce distracted driving.
Our plan
The Ministry of Finance will work with the Ministry of Transportation in 2017-18 to consider the proposed amendments to the Regulation 668 fault determination rules (under the Insurance Act) to include distracted driving.
Review licensing requirements for insurance brokers and agents
Status: Action tracking
What we heard
There is a belief that licensing requirements for insurance brokers and agents should be enhanced, including entry, training, testing and supervision requirements.
Our plan
In January 2016, the Canadian Insurance Services Regulatory Organizations (CISRO) established the Life Licence Qualification Program (LLQP) as a regulatory standard of qualifications and practice for entry-level life insurance agents across Canada.
In its 2017 Operational Plan, CISRO included the development of a qualification program for general insurance agents and brokers that is similar to the LLQP. The Financial Services Commission of Ontario and the Registered Insurance Brokers of Ontario are actively involved in the research phase of this program.
The Ministry of Finance will consider reviewing licensing requirements for insurance brokers as part of its work to update the Registered Insurance Brokers Act, as announced in the 2017 Ontario Budget, to make sure that it meets the current standards and adequately protects Ontario consumers.
The Ministry of Finance will take into account the review of insurance agent licensing requirements when establishing the Financial Services Regulatory Authority of Ontario (FSRA). The objectives of this new financial services and pension plan regulator include strengthening protection of consumers, investors and pension plan beneficiaries. The Ministry of Finance will also bring the idea to review licensing requirements for insurance brokers to the attention of the initial FSRA board for its independent consideration.
Review the benefits of linking and harmonizing corporate and individual insurance agent licences
Status: Action tracking
What we heard
Insurance agents’ individual and corporate licences are not linked. This can result in agents renewing one licence, but not the other, or insurers paying agents through the wrong licence account.
Our plan
The Ministry of Finance will work with the Financial Services Commission of Ontario (FSCO) to review the benefits of linking and harmonizing corporate and individual insurance agent licences. It will also consider this recommendation as part of its work to establish the Financial Services Regulatory Authority of Ontario, a new financial services and pension regulator whose goal is to strengthen consumer, investor and pension plan beneficiary protection.
Streamline unlicensed insurance purchases for sophisticated commercial buyers
Status: Action tracking
What we heard
Brokers must present licensed insurance options, even if sophisticated commercial clients – such as a multi-national company with its own risk department – prefer unlicensed insurance options. This is time consuming and provides no additional benefits to such clients.
Our plan
The Ministry of Finance will consider streamlining insurance purchases for sophisticated commercial buyers as part of amending the Registered Insurance Brokers Act to ensure the Act meets current industry standards and protects Ontario consumers. The amendments may be tabled in the fall of 2017.
Clearly define unfair or deceptive practices related to insurance incentive programs
Status: Action tracking
What we heard
The definition of “unfair or deceptive act or practice” under the Unfair or Deceptive Acts or Practices regulation (O. Reg. 7/00) is not clear. This creates uncertainty, costs insurance companies more money and limits the use of incentives such as loyalty programs.
Our plan
The Ministry of Finance will review what constitutes an unfair or deceptive act or practice under the Insurance Act with the Ontario insurance regulator in 2018-19.
Align timelines in the Variable Insurance Contracts regulation with Canadian Life and Health Insurance Association guidelines
Status: Action tracking
What we heard
There is a time lag between when Canadian Life and Health Insurance Association guidelines are updated and when those changes are reflected in the Variable Insurance Contracts regulations. This prevents the timely adoption of agreed-upon changes by the insurance industry. Timelines around refiling requirements under the Insurance Act are also unclear. This confuses businesses and provides no additional value to consumers, users, or administrators.
Our plan
The Ministry of Finance will include aligning Ontario’s regulation of variable insurance contracts with Canadian Life and Health Insurance Association guidelines in a review of Insurance Act discrepancies. That review will take place as part of the work to establish the Financial Services Regulatory Authority of Ontario, a new, flexible and innovative financial services and pension regulator whose goal is to strengthen consumer investor and pension plan beneficiary protection.
No action recommended
Allow companies that are incorporated both federally and in Ontario to only follow federal reinsurance regulations
Status: No action recommended
What we heard
Requiring reinsurance companies that are incorporated both federally and in Ontario to follow reinsurance regulations at both levels of government is costly, duplicative and burdensome.
Our plan
The federal regulator, the Office of the Superintendent of Financial Institutions, monitors insurance companies operating in Canada for financial soundness, while the Ontario regulator, the Financial Services Commission of Ontario (which is to be replaced by the Financial Services Regulatory Authority of Ontario), licenses them to operate in the province. Reinsurance companies are not incorporated both federally and in the province, and Ontario will continue to regulate their operations here.
Consolidate forms for Replacement of Life insurance contracts
Status: No action recommended
What we heard
The questions on Replacement of Life insurance contract forms are repetitive. This duplicates the time and effort required to fill out forms.
Our plan
No action is recommended as the Life Insurance Replacement Declaration (LIRD) form has been harmonized across Canada after careful consideration by the Canadian Insurance Services Regulatory Organization and the Canadian Council of Insurance Regulators and industry stakeholders —including the Canadian Life and Health Insurance Association and the Financial Advisors Association of Canada. Ontario adopted the harmonized LIRD form in 2010.