FA proposed amendments shot down

The Facility Association (FA)s proposed framework to make it easier to create risk sharing pools (RSPs) in a given jurisdiction has been shot down in a member mail vote.
In order to pass, the Plan of Operation amendments, would require 51% of all eligible votes within 60 days of the mail vote being sent out.
With a total of 92.8% of the 1,269 eligible votes having been received, 49.9% voted for and 42.9% opposed the proposal.
The FA has a weighted voting structure, explains David Simpson, president and CEO of the association, where members get one vote for the first dollar of premium, and then another vote for every $5 million of premium after that.
Eight companies voted in favour of the proposal, including: Aviva Canada Inc; AXA Canada Group; the Co-Operators Group; Guarantee Company of North America; ING; Meloche Monnex Inc.; The Personal Insurance Company of Canada Group; and Royal and SunAlliance Group.
Essentially, the proposed amendments would have applied to passenger vehicles only; limited eligibility to be insured through the traditional FA Residual Market to those that meet specific eligibility requirements; and allow the board of directors, with approval of members and relevant regulators in a jurisdiction, to establish a RSP in a jurisdiction.
Such an RSP would have the following parameters:
-sharing of results based on market share (earned exposure basis);
-risks are ceded at 100% (no risk retention by the member);
-a transfer limit of 5% at the group level (prior year written exposure basis); and
-a single expense allowance factor (to be determined annually) for all members.
The FA does not have any immediate plans, but the association board of directors is committed to collectively moving forward to achieve consensus within the membership and other stakeholders on the appropriate structure for automobile insurance residual markets in Canada, Simpson said.