The Ontario Chamber of Commerce (OCC) has called on the provincial government to reform the auto rate filing system, amid concerns that is “one of the most costly, onerous, and restrictive in North America.”
Various academic studies suggest that strict rate controls could limit competition and consumer choice and thus lead to higher prices, according to a
report released last year by a three-member expert advisory panel appointed by the Ontario Ministry of Finance.
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“Of all of the issues raised by automobile insurers, the current process for reviewing and approving rate changes was the most frequently cited source of dissatisfaction. In Ontario, insurers must seek prior approval before they can adjust rates — up or down,” the report said. “This process can take several months to complete.”
The panel was tasked with reviewing the mandates of the province’s three key financial regulatory organizations: The Financial Services Commission of Ontario (FSCO), the Financial Services Tribunal (FST), and the Deposit Insurance Corporation of Ontario (DICO). It recommended a new, independent and integrated regulator called the Financial Services Regulatory Authority (FSRA).
“The transition from FSCO to the FSRA provides a window of opportunity for Ontario to adopt a more efficient approach to regulating automobile insurance,” said the OCC in a statement.
It said a "file and use" approach or a government review of alternative approaches to rate regulation is highly preferable to the current model.
"As both the chamber and government's Expert Panel noted, the transition to FSRA provides a unique opportunity to create a transparent and accountable rate regulation process – a process that benefits consumers,” said Kim Donaldson, vice-president, Ontario,
Insurance Bureau of Canada.
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