With this Bulletin, the Financial Services Commission of Ontario (FSCO) is amending the Ontario Garage Automobile Policy Form (O.A.P. 4) and a number of commercial automobile insurance related forms. Many of these changes are as a result of Bill 18, the Budget Measures Act, 2005 (No. 2), which among other items dealt with vicarious liability and leased vehicles. These forms are approved for use by the Superintendent of Financial Services in accordance with section 227 of the Insurance Act.
Changes to these forms have been developed in consultation with the Insurance Bureau of Canada, the Insurance Brokers Association of Ontario and rental and leasing groups.
O.A.P. 4 Changes
Changes have been made to the O.A.P. 4 that are similar to those made to the Ontario Automobile Policy (O.A.P. 1) to clarify that there is coverage for liability of an insured person (i.e., a person who has their own automobile insurance policy) in situations where the person rents or leases an automobile and is vicariously liable for the negligence of another person who drives the automobile. (Please refer to FSCO Bulletin No. A-07/06 regarding the O.A.P. 1)
Other Form Changes
Changes have also been made to the following existing forms to reflect the vicarious liability changes and other minor changes: O.E.F. 82, OPCF 21A, and OPCF 21B. These changes include: clarification of coverage for vicarious liability of persons renting or leasing automobiles for no more than 30 days when these automobiles are used by other drivers; change to the title of a form; and format changes and other minor edits.
In addition, several new endorsement forms are being released:
- the O.E.F. 98A Excluded Driver (for attachment only to the Standard Non-Owned Automobile Policy S.P.F. No. 6);
- the O.E.F. 98B Reduction of Coverage for Lessees or Drivers of Leased Vehicles Endorsement (for attachment only to the Standard Non-Owned Automobile Policy S.P.F. No. 6);
- the O.E.F. 110 Reduced Coverage for Lessees or Drivers of Leased Vehicles Endorsement (for attachment only to the Standard Excess Automobile Policy S.P.F No. 7) issued to leasing or rental companies; and
- the O.E.F.120 Reduction of Coverage for Lessees or Drivers of Leased Vehicles Endorsement (for attachment only to the Standard Lessor’s Contingent Automobile Policy S.P.F. No. 8).
These changes, which are designed to maintain the status of the S.P.F. No. 6 and S.P.F. No. 7 as excess policies, and the S.P.F. No. 8 as contingent policy for the Lessor, include: facilitating the exclusion of certain persons from S.P.F. No. 6 coverage (O.E.F. 98A); clarifying coverage for vicarious liability, where vehicle is leased for not more than 30 days, for the negligence of the driver of that vehicle (O.E.F. 98B); clarifying coverage provided is in excess to underlying coverage available to the lessee or driver (O.E.F. 110, O.E.F. 98B); clarifying liability coverage is subject to the limits under Bill 18 (O.E.F. 110); allowing for aggregate limit in excess of $1 million where agreed upon (O.E.F. 110); and clarifying that the third party liability coverage is provided to the named insured only (O.E.F. 120).
Effective Date of Forms
The revised and new forms are effective for new business and renewals on or after January 1, 2008.
Insurance companies are encouraged to read-in the changes that expand coverage (i.e. O.A.P. 4, OPCF 21A, OPCF 21B) to policies and endorsements in force on or after March 1, 2006, the effective date of the vicarious liability amendments in the Budget Measures Act, 2005 (No. 2).
How to Obtain the New/Revised Forms
Copies of the forms are attached and are also available from the FSCO website at www.fsco.gov.on.ca. The O.A.P. 4 will also be published in a forthcoming edition of The Ontario Gazette.
Bob Christie
Chief Executive Officer and
Superintendent of Financial Services
September 29, 2007
Attachments:
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Ontario Garage Automobile Policy Form |
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Liability for Damage to Non-Owned Automobiles and Drive, Rent or Lease Other Automobiles – Named Persons Endorsement (for Ontario Garage Automobile Policy O.A.P. 4) |
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Monthly Reporting Basis Fleet (Applicable to Ontario licensed automobiles) |
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Blanket Fleet Coverage for Ontario Licensed Automobiles |
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Excluded Driver (for attachment only to the Standard Non-Owned Automobile Policy S.P.F. No. 6) |
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Reduction of Coverage for Lessees or Drivers of Leased Vehicles Endorsement (for attachment only to the Standard Non-Owned Automobile Policy S.P.F. No. 6) |
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Reduced Coverage for Lessees or Drivers of Leased Vehicles Endorsement (for attachment only to the Standard Excess Automobile Policy S.P.F. No. 7) |
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Reduction of Coverage for Lesse
es or Drivers of Leased Vehicles Endorsement (for attachment only to the Standard Lessor’s Contingent Automobile Policy S.P.F. No. 8) |