Canadian Underwriter

What FSRA says about the ‘take all comers’ auto insurance rule

November 16, 2021   by Greg Meckbach

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Ontario’s auto insurance regulator is taking aim at insurers who avoid issuing auto policies to people living in certain cities or who did not buy a property polices or are otherwise off-side the “take all comers” rule.

The Financial Services Regulatory Authority (FSRA) released this week its “Take All Comers” guidance, which is intended in part to reiterate guidance issued in 2009 by the Financial Services Commission of Ontario.

“The Take All Comers guidance will lead to strengthened conduct standards which will improve fairness in the system for consumers,” said FSRA (which replaced FSCO in 2018) in a release this past Monday.

The Take All Comers rule is aimed at conduct by an insurer which hinders consumers from acquiring automobile insurance, “particularly where consumers are dissuaded or forced to abandon a request for a quote, which is the critical part of the contract for automobile insurance coverage, constitutes a declination to issue a contract,” said FSRA.

The guidance refers to section 237 (1) of the provincial Insurance Act, which states:

“If so required by the regulations and unless the insurer has complied therewith, an insurer shall not decline to issue or terminate or refuse to renew a contract in respect of such coverages and endorsements as may be set out in the regulations or decline to issue, terminate or refuse to renew any contract or refuse to provide or continue any coverage or endorsement on any ground set out in the regulations.”

The guidance announced Nov. 15 also refers to Section 238 (1), which states: “An insurer shall not decline to issue, terminate or refuse to renew a contract or refuse to provide or continue a coverage or endorsement, except on a ground filed with the Chief Executive Officer under this section.”

FSRA says it has learned of instances in which insurers have avoided issuing auto quotes to  several categories of people – such as claimants who experienced a prior accident benefits loss, including people who were not at fault, such as passengers and pedestrians.

FSRA also says it has been made aware of insurers who avoided issuing policies to individuals who:

  • lived in certain municipalities
  • had less than one year of auto insurance history in Canada and
  • were not purchasing a property policy.

Insurers, agents and brokers have a legal obligation offer all eligible consumers a quote or a renewal, says FSRA. An insurer must also accept all auto insurance business from consumers that meets that insurer’s rules approved by FSRA.

“Insurers operating in Ontario are obliged to file their automobile insurance underwriting rules with FSRA for approval. FSRA reviews such filings in accordance with applicable Rules under the Act and its regulations, which include the prohibited factors that an Insurer cannot utilize in its underwriting rules. Once approved by FSRA, Insurers are then legally required to strictly adhere to the FSRA approved underwriting rules in selling or renewing automobile insurance to consumers.”

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