Amendments to the Private Passenger Automobile Filing Guidelines – CLEAR Simplified, Other than Private Passenger Automobile Filing Guidelines – Major, Other than Private Passenger Automobile Filing Guidelines – Minor, and Technical Notes

Bulletin

No. A-01/15

Property & Casualty

– Auto

To the attention of all insurance companies licensed to transact automobile insurance in Ontario

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The Financial Services Commission of Ontario (FSCO) is releasing updated Private Passenger Automobile Filing Guidelines – CLEAR Simplified, Other than Private Passenger Automobile Filing Guidelines – Major, Other than Private Passenger Automobile Filing Guidelines – Minor, and Technical Notes for automobile insurance rate and risk classification system filings.

Required Filings for CLEAR

FSCO has recently completed its review of the 2015 Canadian Loss Experience Automobile Rating (CLEAR) vehicle rate group methodology and risk classification system. Every insurer currently using CLEAR or a form of the CLEAR system as part of an approved risk classification system for private passenger automobile insurance is expected to submit to FSCO by February 27, 2015 a CLEAR Simplified filing with a revised rate and risk classification system that reflects the updated rate groups, complies with the Private Passenger Automobile Filing Guidelines – CLEAR Simplified, and is effective not later than July 1, 2015.

Failure to submit a filing by February 27, 2015 may result in the Superintendent issuing an Order under section 7 of the Automobile Insurance Rate Stabilization Act, 2003 (AIRSA) requiring the insurer to do so.

The Other than Private Passenger Automobile Filing Guidelines – Major and the Other than Private Passenger Automobile Filing Guidelines – Minor have also been updated to reflect the requirement in AIRSA subsection 2.1 (7) that insurers include elements in their risk classification systems that appropriately take into account safe driving history. The Other than Private Passenger Automobile Filing Guidelines – Major also include changes to the detailed requirements for territorial rating to differentiate these requirements from those set out in the Private Passenger Automobile Guidelines - Major.

Please also note that FSCO will be processing CLEAR Simplified filings on a priority basis between February 27, 2015 and approximately March 27, 2015. Other filings submitted during this period will be given secondary priority.

Technical Notes

FSCO has updated its Technical Notes (Exhibit 3) to include revised thresholds for the Other than PPA filing categories to reflect changes in premium volume and for consistency.

ARCTICS

All insurers must use FSCO’s electronic filing system – ARCTICS – when submitting rate and risk classification system filings. FSCO is making changes to ARCTICS to reflect the revised filing requirements.

Contact

For inquiries regarding this Bulletin, please contact your Team Lead/Analyst in the Automobile Insurance Services Branch at FSCO. Company actuaries are also encouraged to contact FSCO’s actuarial staff on actuarial requirements.

Please note that this Bulletin, the Filing Guidelines, and the Technical Notes are posted on FSCO’s website at www.fsco.gov.on.ca.

Brian Mills

Chief Executive Officer and

Superintendent of Financial Services (Interim)

January 30, 2015