Further to Bulletin No. A-09/15, posted on November 10, 2015, the Financial Services Commission of Ontario (FSCO) is releasing the second document to provide consumers with information regarding the auto insurance reforms. The Point of Sale Disclosure (POS) document highlights, in more detail, changes to the standard auto insurance policy in Ontario effective June 1, 2016, and the new choices available.
The POS document was also drafted in consultation with the Reform Information Working Group. In the interest of providing consistent and coordinated information to Ontario policyholders, insurers are required to distribute or ensure distribution of this document to their policyholders.
This Bulletin outlines the requirements regarding the treatment and distribution of the POS document.
Point of Sale Disclosure Document
Property & Casualty – Auto Bulletin No. A-08/15: Revised Certificate of Automobile Insurance Form and Data Elements, issued September 18, 2015, referred to the development of the POS document by the Reform Information Working Group and advised that insurers would be required to include the document with new business and policy renewals that are effective on or after June 1, 2016.
Now complete, the POS document is attached:
- Important Changes to Your Policy, provides uniform, detailed information on changes to auto insurance policies issued on or after June 1, 2016, as well as other reforms in the auto insurance system that impact consumers.
Also attached is an instructional guide illustrating the extent to which insurers may customize the POS document.
The 2015 Budget contained a commitment to ensuring consumer awareness and understanding of the auto insurance changes affecting them so that they can make informed decisions regarding optional coverages available. In November 2015, FSCO hired a third-party vendor to test versions of the POS document in focus groups with consumers. The research was designed to get consumer input on readability, ease of understanding of content and effectiveness of message delivery.
Participants agreed that they would be more likely to read the information if it was provided in the format and layout attached. The research showed that the visual impact of design elements such as larger fonts, bolding and underlining of key words, and use of colour for emphasis, made it easier for readers to quickly understand the key points and the importance of learning more about these changes.
Insurers are therefore required to produce, or ensure production of, the POS document so that the content and graphic design/layout is as provided in the instructional guide and that minimal customization is undertaken.
Some general formatting is at the discretion of the insurer and/or insurance representative. This includes:
- Font style (e.g., Arial, Times New Roman)
- Colour scheme
- Addition of company logo
- Presentation (e.g., folded or flat, double- or single-sided, paper stock)
However the following instructions must be followed:
- there can be no alterations to the wording or the order of the content;
- page size must be a minimum of 8½" x 11"
- areas of the document shown in colour (text and shading) must be printed in the colour of your choice. Text that appears in black must remain in black.
- the aspect ratio or proportional size of the font must be maintained, as demonstrated in the instructions (e.g., title must be larger than text, identified words/sentences must remain larger in relationship to other text)
- the smallest font size must be at least 10 point;
- the treatment of key words, as identified in the instructions, must be maintained (e.g., bold, underline)
- the chart content must remain in chart format; and
- the POS document must be provided as a distinct page.
The box directing consumers to the contact information included on the material accompanying the POS document is mandatory. Additional contact information can be added to this box, but is optional.
Certificate of Automobile Insurance Form
Property & Casualty – Auto Bulletin No. A-08/15 also noted that the Certificate as attached in that Bulletin, would be amended to introduce the POS document as an additional data element forming part of the Certificate.
The Certificate, incorporating the POS document is attached to this Bulletin. This Certificate must be used for all policies that are first issued or renewed between June 1, 2016 and May 31, 2017. Insurers are not required to refile Certificates for the sole purpose of reflecting the inclusion of the POS document.
For policies issues or renewed after May 31, 2017, the Certificate does not need to include the POS document.
FSCO expects that, commensurate with the requirements of section 236 of the Insurance Act, renewal materials, including the Certificate incorporating the POS document, will be delivered to policyholders at least 30 days before policy expiry.
Distribution via Electronic Channels
Any or all of the publications can be delivered to policyholders in electronic form only where the policyholder has clearly indicated that electronic is the preferred method of communication and delivery of policy renewal documents.
The text for the POS document is attached to this Bulletin and is available in Word and PDF format, in English and French, on FSCO's website at www.fsco.gov.on.ca. The instructional guide to assist in formatting the POS document is also available on FSCO's website.
Insurance Representative/Third-Party Distribution
FSCO expects that insurers planning to distribute the publication through insurance representatives (e.g., brokers and agents) will oversee the production and distribution process to ensure all policyholders receive the publication as outlined above.
Insurers will be subject to audit for the purpose of confirming compliance with the requirements of the Insurance Act as set out in this Bulletin. Please retain and be prepared to produce records that demonstrate your compliance, if requested by FSCO.
Chief Executive Officer and
Superintendent of Financial Services
January 4, 2016