Stakeholder comments have been tabulated and the Financial Services Regulatory Authority of Ontario (FSRA) has finalized and published its new Automobile Insurance Rating and Underwriting Guidance. The effective date for the guidance remains undetermined.
According to FSRA, the guidance aims to establish a principles-based, outcomes-focused and risk-based approach to rating and underwriting regulation. The regulator also says the guidance is intended to promote fair rates and underwriting for consumers.
“The guidance reflects FSRA’s move to a principle-based and outcomes-focused supervisory approach,” they write. “It defines what fair treatment of consumers looks like, introduces an accreditation process for insurers and sets new filing privileges and requirements for both accredited and non-accredited insurers.”
Stakeholders seek clarity
During the two consultation periods, one held between September and November in 2024 and another which occurred in January and February 2025, the regulator received 19 written submissions and three comments from 16 different stakeholders. Stakeholders providing feedback to the regulator included Definity Insurance, Aviva, professional services associations (rehab, trial lawyers, psychologists and automakers among them), the Insurance Bureau of Canada (IBC), Travelers Canada, the Canadian Association of Direct Relationship Insurers or CADRI and a victim’s association.
Where stakeholders sought further clarity on how fairness would be assessed and what sort of data could be used for that purpose, FSRA made revisions to provide detail on the types of data it will request and how accredited and unaccredited insurers would be assessed. They say a filing manual will contain greater detail regarding the specific requirements for fairness.
Stakeholders were also concerned about references to profitability. “Stakeholders noted that accredited insurers should be permitted to target a profit provision based on business strategy and reviewing prior year profit levels will create extra work,” they write. “One stakeholder suggested prior year loss developments and loss reserves should be evaluated instead.” In response, FSRA says it will review its approach to assessing industry profitability after the new supervisory model is in place.
Transparency, proportionality, intermediaries and regulatory alignment with other entities were also discussed. It was also noted that large insurers should not be expected to establish frameworks specific to Ontario. “FSRA has revised the guidance to reflect that it will consider established controls and oversight frameworks from insurers so long as they meet the requirements of the guidance,” they state.
Automobile underwriting and rating guidance issued by Ontario regulator
Ontario proposes accreditation for insurers that demonstrate sound practices
