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New Ontario regulations to eliminate delays in benefit payments due to insurer disputes, ban credit scoring in auto lines


March 3, 2010   by Canadian Underwriter


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New auto insurance regulations to take effect in Ontario in September 2010 are designed to make it impossible for insurers to place an accident benefits claim on hold in order to resolve a dispute between insurers.
In addition, Ontario regulations now ban credit scoring in auto insurance lines as an “unfair or deceptive act or practice.”
Tackling the issue of disputes among insurers, Ontario Regulation 283/95 now prohibits insurers from refusing applications or attempting to redirect claimants to other insurers while they work out which one owes payment.
It also prohibits insurers from attempting to prevent or discourage claimants from submitting applications to them.
The new rules require claimants to submit their applications for benefits to only one insurer, rather than all insurers that may be liable. They also require the first insurer to receive a completed application to provide benefit payments without delay.
On the issue of credit scoring, Ontario Regulation 7/00 has been amended by Ontario Regulation 37/10 to ensure that automobile insurers cannot use credit information for specific automobile insurance purposes. 
A definition of “credit information” includes a person’s credit rating, credit score, credit-based insurance score, occupation, place of residence, number of dependants, education, profession, place(s) of employment, income, debts, cost of living and assets.
The regulation also prohibits insurers from requiring that a consumer consent to the collection and use of his/her credit information before providing an insurance quote or offering to renew a policy.
Insurers are not allowed to use credit information in order to treat consumers differently when they respond to requests for quotes, or process applications for automobile insurance or renewals of policies.
The new regulations are summarized on the Web site of the Financial Services Commission of Ontario (FSCO) at:
http://www.fsco.gov.on.ca/english/pubs/bulletins/autobulletins/2010/a-01_10.asp


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