The Registered Insurance Brokers of Ontario (RIBO) has released a new report outlining recommendations related to the Take-All Comers (TAC) Rule.
TAC refers to provisions of the Insurance Act and Unfair or Deceptive Acts or Practices (UDAP) Rule that apply to licensed insurers, agents and brokers who write, sell, or deal with auto insurance in Ontario.
According to the TAC rule, these parties have a legal obligation to provide consumers with the lowest rate available, as well as offer all eligible consumers a quote or renewal that is consistent with filed rates and underwriting rules. Additionally, they must accept all auto insurance business from consumers that meet approved rules.
The Financial Services Regulatory Authority of Ontario (FSRA) released a TAC guidance document following the approval of the UDAP rule in 2022. This prompted RIBO to engage in outreach activities to improve broker awareness on the rules and encourage reports of non-compliance.
In its latest report, RIBO published the outcome of the 39 TAC focused spot checks it had conducted from August 2022 to April 2023, along with recommendations to help brokers remain compliant with the TAC rule.
Following its assessment, RIBO outlined the following recommendations for brokers:
RIBO emphasized the importance of agents and brokers providing proper disclosure, along with analyzing the needs and product suitability for each client.
The regulator reminded brokers to maintain regular communication with clients, saying that it could potentially reduce errors and omissions claims in the long run.
Finally, it reiterated that brokers must not seek ways to refuse to quote or insure “undesirable” or “unattractive” auto insurance business to protect their contingent profit commission, stating that this is a violation of TAC rules and other related laws and regulations.
To continue aiding brokers with the TAC rule, RIBO has vowed to continue its monitoring activities, including the integration of a compliance module into its risk-based spot check program. It also called on brokers with deficiencies to address gaps in their TAC compliance.
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