Ontario’s thriving financial marketplace is constantly creating new and innovative products, services and delivery models that better meet the needs of consumers. This brings both opportunities and challenges. FSCO recognizes the need to achieve a balance between being nimble in its response to support product and service innovation, while working within its legislative and regulatory frameworks to protect Ontario consumers.
Over the past year, FSCO supported a variety of innovative products and business practices to ensure it remains a modern, responsive and efficient regulator.
PAY-AS-YOU-DRIVE AUTO INSURANCE
This year, FSCO approved the Canadian Automobile Association (CAA) MyPace program, an innovative auto insurance product aimed at Ontario drivers who drive fewer than 9,000 kilometers annually. Expected to launch in 2018-19, this is the first pay-as-you-drive auto insurance product in Canada, allowing drivers to purchase insurance for a predetermined kilometer range. The product uses a telematics device installed in the car to measure distance driven, and drivers pay for coverage in 1,000-kilometer increments.
“The choice and control that Ontario consumers can now access through CAA MyPace was
made possible through our collaboration with FSCO. We worked with the regulator to look
at innovative solutions for the insurance industry, and they played a key role in facilitating
that request while protecting the public interest.”
Matthew Turack, President, CAA Insurance Company
SUPPORTING THE SHARING ECONOMY
In response to the rise of the sharing economy, and a gap in insurance coverage, FSCO, industry and regulatory partners worked to develop an insurance solution for ridesharing. New ridesharing and carsharing services continued to enter the marketplace throughout the year, underscoring the importance of having an adaptable solution in place. FSCO approved auto insurance products for an additional six ridesharing companies and one carsharing company in 2017-2018, bringing the total number of ridesharing and car sharing companies with approved auto insurance coverage in Ontario to nine. This ensures consumers have adequate protection when using innovative ridesharing and carsharing services in Ontario.
Ontario is home to many innovative financial technology (Fintech) companies. Many of them operate in FSCO’s regulated sectors and require help and guidance navigating Ontario’s regulatory landscape. FSCO established a working group in 2016-17 to help identify and support those companies. In 2017-2018, the group worked on creating an intake process to create a collaborative dialogue between FSCO and Fintech companies that are already operating, or are about to start operation, in a regulated sector.
ADDRESSING 'MISSING' PENSION PLAN MEMBERS
Since 2017, pension plan administrators have been required to provide biennial statements to all retired and former members. Experience has shown that this requirement has helped plan administrators identify and resolve contact data issues with many plan members.
Moving forward, administrators’ contact data for their members will be more up-to-date since they will be in regular contact through the biennial statement. However, currently it can be very challenging for administrators to find many members who do not provide up-to-date contact information.
To address this, the Pension Benefits Act (PBA) was amended to give FSCO’s Superintendent the ability to waive the requirement to provide biennial statements to missing pension plan members if reasonable efforts have been made to attempt to locate those members.
FSCO published two new policies in September 2017 to provide guidance to pension plan administrators regarding missing pension plan members:
- Searching for Plan Beneficiaries (A300-900) determines the steps administrators should consider when searching for missing members.
- Waiver of Biennial Statements for Former and Retired Members (A300-901) outlines FSCO’s expectations when administrators request a waiver for sending biennial statements to missing members.
These changes are expected to reduce the numerous inquiries from both pension plan administrators looking for missing beneficiaries and plan members searching for their pensions, as well as improve both the operational efficiency of pension plans and plan sustainability.
SUPPORTING DEFINED BENEFIT PENSION PLAN MEMBERS
In 2017-18, FSCO continued to work with defined benefit pension plan sponsors and representatives to explore merger opportunities between Single Employer Pension Plans and Jointly Sponsored Pension Plans that strike a balance between plan sustainability and member protection. These types of mergers can strengthen the security and sustainability of defined benefit pension plans and promote increased pension coverage.
EVOLVING FSCO'S BUSINESS PRACTICES
FSCO continuously looks to modernize its business practices, streamline processes and create efficiencies to be a more effective regulator.
Automating treatment plan approvals
This year, the Motor Vehicle Accident Claims Fund (MVACF) reviewed its claims handling processes and identified an opportunity to modernize its processes to be more efficient. MVACF opted into using the Health Claims for Auto Insurance (HCAI) database. This provided MVACF with the ability to automate treatment plan approvals and denials while remaining compliant with applicable laws and regulations. The result has been an improved delivery of health care benefits to Ontarians injured in car accidents involving uninsured drivers, and has allowed MVACF to assess the effectiveness of treatment type and duration for specific injuries.
Maintaining complex technology systems
FSCO currently uses several specialized technology platforms that are not integrated and are costly to maintain. In 2016-17, FSCO created the Enterprise Development Program (EDP), a new internal structure for process and operations within FSCO supported by new technology systems. The EDP would replace all of these individual systems with a common one that is easier to use, facilitating efficient communication between FSCO, regulated entities and consumers.
The project was placed on hold after the government passed legislation to enable the Financial Services Regulatory Authority of Ontario (FSRA), a new, independent regulatory agency that will be responsible for regulating pensions and the financial services sectors. FSCO continues to maintain existing technology systems to ensure the interests of consumers and pension plan members in Ontario remain protected.
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