RIBO warns brokers about ‘negative option billing’ in the context of Ontario auto reforms

Ontario’s broker regulator is cautioning brokers who are about to sell the province’s new auto insurance product about ‘negative option billing,” which is illegal in Ontario.
Specifically, RIBO’s Ontario Auto Reform 2010 Best Practices Guideline observes that a number of Ontario’s new auto insurance options contain “buy-back options.”
For example, after Ontario’s auto insurance reforms are implemented in Sept. 1, 2010, a person’s standard auto insurance package will contain less coverage than what it once had; nevertheless, consumers will have the option to buy back options to raise their coverage levels back to their original levels.
In the context of Ontario auto insurance reform, RIBO defines negative option billing as “requesting a coverage that costs consumers additional premium dollars that they have neither consented to nor made an informed decision to buy.”
“Negative option billing falls below the quality of service provided by a reasonably prudent insurance broker that the public of Ontario has a right to expect,” RIBO adds. “This means that simply requesting that all renewals be issued at the former coverage levels and then contacting clients over time to ask if they wish to buy coverages down is an act of misconduct.
“RIBO will enforce the Code of Conduct accordingly.”