The Nova Scotia Utility and Review Board (NSUARB) has approved RSA Canada’s introduction of a “Quality Rating Factor” (QRF) to determine if a policyholder is eligible for a discount – a factor that notably utilizes customers’ credit scores.
RSA Canada had proposed that the QRF would only apply to writing new auto insurance business in the region, not existing business. The insurer also said that in order to determine a customer’s QRF, it would first have to obtain consent from the driver before a credit check can be performed.
In a March 11, 2021 document detailing its decision, the NSUARB noted that earlier this year it also approved the use of QRF by Unifund Assurance Company, a subsidiary of RSA. Unifund’s QRF discount program applies only to new business written, and not renewals.
“RSA’s proposal is similar to Unifund’s,” NSUARB said in its decision. “Despite the similarities in the assessment variables, the discounts offered by Unifund and the discounts proposed for RSA differ. The selected discounts reflect differences in the chosen distribution networks and business strategies used by each company.”
The NSUARB also noted that RSA Canada, like its subsidiary before it, must abide with the Insurance Bureau of Canada’s Code of Conduct for Insurers’ Use of Credit Information.
Unifund has yet to extend its QRF discount program to existing customers, but the insurance regulator expressed concerns over how the company’s proposed approach to obtaining consent from existing customers may not adhere to IBC’s code – a code which stresses that consent obtained must be specific (whether it should be obtained in writing, via an e-medium, etc.), and that insurers must have a proper way of retaining proof of consent.
“Since Unifund has not yet proposed to extend the discount to existing customers, the board believes that this does not need to be determined at this time. Given its commitment to following the code, Unifund should be willing to address this issue when the company submits an application to extend the discount to existing customers,” NSUARB said.
The board also noted that the same applies to RSA Canada.
“The council’s opinion on this matter has not changed; therefore, the board will also expect RSA to be willing to address this issue when the company submits an application to extend the potential discount to existing customers,” it said.
