REGARDING the Automobile Insurance Rate Stabilization Act, 2003, S.O. 2003, c. 9, as amended, in particular sections 11
AND REGARDING TD Home and Auto Insurance Company
TD Home and Auto Insurance Company
320 Front Street West, 3rd Floor
Toronto ON M5V 3B6
Subsection 11(1) of the Automobile Insurance Rate Stabilization Act, 2003, S.O. 2003, c. 9 (the “Act”) provides that if, in the opinion of the Superintendent of Financial Services (the “Superintendent”), an insurer is committing any act or pursuing a course of conduct that is a contravention of the Act or that might reasonably be expected to result in a situation that would constitute a contravention of the Act, the Superintendent may, without giving prior notice, make an order to take effect immediately on its making,
- requiring the insurer to cease doing or to refrain from doing any act or pursuing any course of conduct identified by the Superintendent;
- requiring the insurer to perform any act that, in the opinion of the Superintendent, is necessary to remedy the situation, including requiring an insurer to reimburse an insured in respect of any excess premium paid by the insured to the insurer by reason of the insurer’s contravention of the Act; or
- suspending or cancelling the insurer’s licence under the Insurance Act, R.S.O. 1990, c. I.8 (the “Insurance Act”).
Subsection 11(2) of the Act provides that at the request of an insurer that is the subject of an order under section 11 of the Act, the Superintendent shall, after giving the insurer an opportunity to make written submissions, reconsider the order. Subsection 11(3) of the Act provides that after reconsidering an order under section 11 of the Act, the Superintendent shall confirm, modify or revoke the order. Subsection 11(4) of the Act provides that an order under section 11 of the Act may be reconsidered at the request of the insurer only once and, subject to the decision of the Superintendent after a reconsideration under subsection 11(2) of the Act, is final for all purposes.
The Superintendent is of the opinion that TD Home and Auto Insurance Company is committing an act or pursuing a course of conduct that is a contravention of section 8 of the Act or that might reasonably be expected to result in a situation that would constitute a contravention of section 8 of the Act. Accordingly, the Superintendent makes the following Order.
IT IS ORDERED THAT pursuant to subsection 11(1) of the Act, and for the reasons described below, TD General Insurance Company and any agents, representatives and successors thereof (“TD Home & Auto”) shall:
- Refund all current and former policyholders who were overcharged by TD Home & Auto in respect of any contracts of insurance for the Personal Vehicles – Private Passenger Automobile category of automobile insurance as a result of charging rates other than the authorized rates contrary to section 8 of the Act, as of the date of this Order by no later than May 31, 2020, in a manner acceptable to the Superintendent of Financial Services, or his successors and assigns (the “Superintendent”) which shall include the following features:
- Eligible policyholders shall be refunded the amount that was paid in excess of the authorized rate plus interest at a rate to be determined by TD Home & Auto with the approval of the Superintendent.
- Refunds shall be accompanied by a notification detailing the amounts due and the reasons why the policyholder is receiving the refund.
- TD Home & Auto shall provide the Superintendent with a schedule demonstrating how it intends to ensure all refunds will be made by May 31, 2020, and shall provide updates to the Superintendent regarding the status of the refund efforts commencing three months from the date of this Order and every three (3) months thereafter until all refunds have been issued.
- The amount, if any, representing the value of cheques that as of December 31, 2020, have been sent and remain uncashed or have been determined to be undeliverable, will be donated to charity subject to the approval of the Superintendent.
- TD Home & Auto shall maintain a database in and/or through which all accounting of funds in connection with this Order shall be administered, including full reconciliations of refunds payable, refunds paid, refunds outstanding (as applicable) and the amounts representing refund cheques that remain uncashed or are determined to be undeliverable in connection with this Order, including the total amount donated to charity.
- On or before December 31, 2020, provide the Superintendent with a written report specifying the details of its compliance with paragraph 1 of this Order, including full reconciliation of the refunds payable, the refunds paid and the amounts that remain uncashed or are determined to be undeliverable (the “Refund Report”). The Refund Report shall also address any other information relevant to compliance with paragraph 1 as directed by the Superintendent.
- Submit a plan to remediate the systemic operational and information technology issues at TD Home & Auto that resulted or may result in further contraventions of section 8 of the Act (the “Remediation Plan”) to the Superintendent within ninety (90) days from the making of this Order. The Remediation Plan shall include an implementation schedule not to exceed eighteen (18) months from the date of this Order and shall be approved by TD Home & Auto’s Board of Directors and a copy submitted to Meloche Monnex Inc.’s Board of Directors. The Remediation Plan, as amended by the Auditor under paragraph 6i below, shall be implemented by TD Home & Auto.
- Retain an independent, external auditor (the “Auditor”), at TD Home & Auto’s sole cost, to be approved by the Superintendent within ninety (90) days from the making of this Order. The proposed Auditor may be the same auditor proposed in response to the corresponding Orders issued by the Superintendent under section 11(1) of the Act on today’s date against TD General Insurance Company, Security National Insurance Company and/or Primmum Insurance Company.
- Prior to retaining the Auditor, TD Home & Auto shall:
- provide the Superintendent with any information required to allow the Superintendent to assess the independence and qualifications of the proposed Auditor, within sixty (60) days from the making of this Order, including:
- written confirmation from TD Home & Auto and the proposed Auditor that the Auditor is independent of TD Home & Auto, the companies identified in paragraph 4, and the Toronto-Dominion Bank (including confirmation that the Auditor has no other active dealings with TD Home & Auto or any other company identified in paragraph 4);
- the proposed retainer agreement;
- a summary of the Auditor’s ability to undertake the functions identified in paragraph 6; and
- a proposed work plan from the Auditor, including a schedule for completing the functions set out in paragraph 6 within twelve (12) months from the date of appointment.
- require the Auditor to meet with representatives of the Superintendent in TD Home & Auto’s absence in order to discuss the items identified above; and
- obtain the written approval of the Superintendent to retain the Auditor.
- The Auditor shall perform the following audit functions:
- review the Remediation Plan as well as the systems and processes in place at TD Home & Auto, and, within sixty (60) days of the filing of the Remediation Plan, provide a report (the “Audit Report”) to the Superintendent and TD Home & Auto as to the efficacy and timeliness of the Remediation Plan. The Audit Report shall include suggested amendments to the Remediation Plan (the amendments together with the Remediation Plan referred to herein as the “Amended Remediation Plan”);
- monitor implementation of the Amended Remediation Plan and provide progress reports (the “Progress Reports”) to the Superintendent and TD Home & Auto regarding the implementation of the Amended Remediation Plan, commencing sixty (60) days from the date of the Audit Report and every three months thereafter until the Amended Remediation Plan is fully implemented;
- take further direction from the Superintendent with respect to the audit as required.
- Cooperate with the Auditor and provide the Auditor with access to its books and records for the purposes of conducting the audit.
- Report to the Superintendent and the Auditor, within fifteen (15) days of discovery, any instances that have or may result in further contraventions of section 8 of the Act (other than those that have already been reported to the Superintendent or FSCO staff as of the date of this Order).
- Not take any steps to recover amounts from current and former policyholders who were undercharged in connection with the rating errors identified below.
TAKE NOTICE THAT this Order takes effect immediately.
AND TAKE NOTICE THAT the Superintendent may make additional orders as needed in order to ensure compliance with the Order herein pursuant to clause (b) of subsection 11(1) of the Act.
AND TAKE NOTICE THAT pursuant to subsections 11(2) and 11(3) of the Act, at TD Home & Auto’s request, the Superintendent shall give TD Home & Auto the opportunity to make written submissions and shall, after reconsideration of the Order, confirm, modify or revoke the Order.
AND TAKE NOTICE THAT pursuant to subsection 11(4) of the Act, the Order may be reconsidered at TD Home & Auto’s request only once and, subject to the decision of the Superintendent after reconsideration under subsection 11(2) of the Act, is final for all purposes.
AND TAKE NOTICE THAT pursuant to subsection 12(1)2 of the Act, every insurer that fails to comply with an order of the Superintendent made under section 11 of the Act is guilty of an offence and on a first conviction to a fine of not more than $250,000 and on each subsequent conviction to a fine of not more than $500,000.
Subjection 12(2) of the Act provides that every director, officer and chief agent of an insurer who causes, authorizes, permits or participates in the insurer committing an offence under this Act or who fails to take reasonable care to prevent the insurer from committing an offence under this Act is guilty of an offence. Subsection 12(3) of the Act provides that a person who is guilty of an offence under subsection 12(2) of the Act is liable on a first conviction to a fine of not more than $100,000 and on each subsequent conviction to a fine of not more than $200,000, whether the insurer is prosecuted for or convicted of an offence. Subsection 12(4) of the Act provides that if a person is convicted of an offence under the Act, the court making the conviction may, in addition to any other penalty, order the person convicted to make compensation or restitution in relation to the offence.
Si vous désirez recevoir cet ordre en français, veuillez envoyer votre demande immédiatement à: Adjointe, audiences, Greffe, Commission des services financiers de l’Ontario, 5160 rue Yonge, 14em, Toronto ON M2N 6L9.
DATED at Toronto, Ontario, this 14th day of January, 2019.
Original signed by
Superintendent of Financial Services