Major Ontario insurers lambasted over ‘systemic’ auto insurance non-compliance

An Ontario insurance regulator investigation into the province’s 12 largest motor insurers has unearthed “systemic non-compliance” with ‘Take-all-comers’ rules, with insurance giant Aviva facing $600,000 in fines.

"The ‘Take-All-Comers’ requirement is a cornerstone of ensuring Ontario consumers have access to auto insurance at the lowest available rate," said Mark White, FSRA CEO. "It is very hard for consumers, and it's even hard for a regulator to identify when insurance quotes for qualifying customers are withheld or delayed.

“Our eventual success in rooting out this non-compliance required perseverance and the use of governance, controls and processes within the insurance companies themselves to self-identify and remediate these consumer harms." 

Two Aviva businesses have been fined $600,000 in total for failing to “self-identify and remediate” non-compliance failings, the regulator said.

An Aviva spokesperson told Insurance Business: "Aviva strives to provide Ontarians with access to timely auto insurance quotes and the lowest possible rates, and we take our regulatory commitments seriously. We have fully cooperated on this matter and have taken the necessary steps to ensure we are fully compliant with all-comers regulations.”

Auto insurance in Ontario – major insurers found to have engaged in ‘systemic’ non-compliance

Insurers have engaged in practices that made it more difficult for certain types of consumers to obtain auto insurance quotes, the regulator set out. This systemic non-compliance resulted in the following, according to the FSRA:

• Higher Premium Cost: Consumers viewed as “higher” or “low-quality” risk were unable to get a quote and/or coverage from the insurer with the lowest premium, despite being eligible based on that insurer’s filed and approved underwriting rules.
• Unfavourable Discretion: Insurers used unfiled underwriting rules to suspend an intermediary’s binding authority and the automated quoting and underwriting process was replaced with manual underwriting.
• Unfair competition: Take-All-Comers contraventions also led insurers to steer “riskier” consumers away from themselves and toward other insurers. This undermines fair competition, creating an unlevel playing field in the market.
• Less choice: Take-All-Comers contraventions meant consumers had less choice in insurance providers because they were unable to obtain policies, despite their eligibility under insurers’ filed and approved underwriting rules.
• Wasted time: Consumers’ time was wasted because insurance coverage was made more difficult to find."

The FSRA will look to ensure future compliance by supervising insurers to confirm effective implementation of approved remedial action and to identify other sources of non-compliance, it said. 

This will include "secret shopper" initiatives and ongoing supervision of auto insurers, which extends beyond the 12 insurers featured in this review.

The FSRA further urged employees and intermediaries that identify ‘Take-All-Comers’ breaches or other bad practices to report concerns through its whistleblower program.

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