Ontario insurers writing automobile insurance are going to be affected by recent changes to the Facility Association's (FA) Plan of Operation. The take-all-comers (TAC) requirement, for instance, will significantly reduce the number of non-fleet private passenger automobiles the FA insures; individual insurers in the province will be picking up this business.
This bulletin outlines the filing requirements:
- revised underwriting rules and related forms, and
- for private passenger autos, changes to rates and classes of risk exposure
Filings by all insurers licensed to write automobile insurance in Ontario should reach the Commission by October 23, 1992; the take-all-comers requirement applies to all contracts effective January 1, 1993. Please follow the guidelines in Appendix A and B when you format this and future underwriting rule filings. We have also attached copies of Form C and Form D on changes to rates and classes of risk exposure.
Underwriting rules requirements
Under the take-all-comers requirement, we expect insurers to write optional coverages for those risks that had optional coverage in the Facility Association; writing only compulsory coverages is not enough.
In preparing filings for amended underwriting rules, see Appendix A for private passenger automobile (PPA) and Appendix B for all categories of auto insurance other then PPA.
If your rate manual currently contains underwriting rules, update it and send it to us. You do not have to file any internal rules you will use for ceding risks to FA's Risk Sharing Pool.
Rate and classes of risk exposure
Rate filings for private passenger automobiles are also affected by changes to the Facility Association's Plan of Operation:
- for the interim, you can not charge more than the FA approved rate (plus commission) for any non Residual Market Risk that FA was insuring. You will need to file Form C.
- you must have rates and classes of risk exposure for all non Residual Market Risks, unless you are exempt from the take-all-comers requirement. This includes rates for all territories, vehicles and vehicle rate groups, and classes for non Residual Market Risks. File Form D if you don't have rates and classes of risk exposure for all non Residual Market Risks.
- All insurance companies licensed for automobile insurance in Ontario must file
- one of Form A1, A2, or A3 and, where they apply, underwriting rules for PPA as set out in Appendix A; as well as
- Form B1 or B2 and, where they apply, underwriting rules for other categories as set out in Appendix B.
- If you write non-fleet PPA you must also file
- Form C
- If you haven't filed rates and classes of risk exposure for all non Residual Market Risks and you are not exempt from the TAC requirement, you must
- Form D together with supporting material
Contact our Rates and Classifications Branch at (416) 590-7123 if you have questions.
Donald C Scott
October 2, 1992