The
Insurance Bureau of Canada has voiced its support for a preliminary position paper issued by an Expert Advisory Panel that seeks to reform the regulatory bodies of Ontario’s financial services sector.
“IBC and its members believe that Ontarians will be best served by a framework that is focused on consumers, is proactive and strongly committed to promoting innovation and competition in the marketplace,” Don Forgeron, president and CEO, IBC, said in a statement. “We look forward to continuing our work with the panel to this end.”
The panel, appointed by Ontario’s Minister of Finance, examined the Financial Services Commission of Ontario (FSCO), Financial Services Tribunal (FST) and Deposit Insurance Corporation of Ontario (DICO). In its initial assessment, the three panel members found that the province’s regulatory regime “is not as effective as it could or should be.”
In particular, they found that the agencies should be more nimble in following the global shift toward deregulation of auto insurance pricing, which has been made necessary by consumers’ preference for tailored products and coverage options. They note that this will be increasingly demanded by policyholders as usage-based insurance become more widely adopted throughout Canada.
“Many jurisdictions, particularly throughout the United States and Europe, have moved away from the prior approval system that is used to regulate auto insurance rates in Ontario,” the panel reports. “We heard from one U.S jurisdiction that it experienced auto insurance rate reductions for nearly 80% of drivers following the introduction of a more flexible system.”
The IBC backed that assertion.
“What many people do not know is that insurers have to apply to FSCO to adjust their auto insurance premiums, whether up or down. This process is slow, cumbersome, lacks flexibility for insurers and does not serve the best interests of consumers,” Forgeron said. “Ontario’s insurers are committed to delivering affordable, high-quality auto insurance that offers secure protection and choice. A modern and efficient system is vital to delivering that product.”
