May 9, 2017 by Canadian Underwriter
The Ontario Chamber of Commerce (OCC) is calling on the provincial government to put an end to its existing auto rate filing system, a system the chamber describes as “one of the most costly, onerous, and restrictive in North America.”
The OCC, a business organization that represents 60,000 firms from across the province, officially endorsed auto rate regulation reform after a unanimous vote by local chamber of commerce delegates at the OCC’s annual general meeting in Sarnia, Ont., the Insurance Bureau of Canada (IBC) noted in a press release on Tuesday.
“Ontario’s antiquated rate regulation system no longer works for consumers and businesses,” said Kim Donaldson, vice president, Ontario, with IBC. “We’re pleased to see the Ontario Chamber network join leading voices like David Marshall in calling on the province for change.”
Marshall, the former president and CEO of the Workplace Safety and Insurance Board, was appointed in 2015 to review Ontario’s auto insurance system. Last month, he issued a final report on that review, titled Fair Benefits Fairly Delivered: A Review of the Auto Insurance System in Ontario. Among the recommendations were that hospital-based examination centres should provide Ontario auto accident treatment plans and that the province’s new financial authority should monitor auto insurers with an “unusual number” of licence appeal tribunal appeals.
The IBC statement noted that OCC’s endorsement of major changes is aligned with the 2016 findings of the Province’s Expert Panel that reviewed the mandate of the Financial Services Commission of Ontario (FSCO). The panel noted that a variety of studies suggest that strict rate controls could limit competition and consumer choice and thus lead to higher prices. The panel recommended that the province review the rate approval process as a first step in implementing a less costly, less time-consuming and more transparent process.
Echoing the findings and recommendations of the expert panel, the OCC argued that the transition from FSCO to the Financial Services Regulatory Authority (FSRA) provides a “window of opportunity for Ontario to adopt a more efficient approach to regulating automobile insurance.” The OCC suggested that a “file and use” approach or a government review of alternative approaches to rate regulation is highly preferable to the current model.
“We will continue to work with government to ensure that FSRA’s board of directors is empowered to review and ultimately find alternatives to our existing rate regulation system,” Donaldson added in the release. “As both the chamber and government’s Expert Panel noted, the transition to FSRA provides a unique opportunity to create a transparent and accountable rate regulation process – a process that benefits consumers.”