Filing Guidelines for Underwriting Rules

A. Purpose of the Guidelines

All insurers that are licensed to write automobile insurance in Ontario are required to make a filing in respect of their underwriting rules with the Financial Services Commission of Ontario (FSCO).

 

Subsection 238(3) of the Insurance Act requires that underwriting rules be filed in a form approved by the Superintendent together with other information as may be specified. These guidelines describe the form to be used for filing underwriting rules.

 

If an insurer is licensed to write automobile insurance, but does not write any contracts on Ontario Automobile Policy (OAP) 1, then only Appendix A and Appendix B need to be submitted. Similarly, if an insurer does write automobile insurance, but only on a fleet basis, then only Appendix A and Appendix B need to be submitted. Please refer to Regulation 664 for the definition of fleet.

 

Where an insurer is writing non-fleet automobile insurance on OAP 1, it must file Appendix A, Appendix B and the underwriting rules in Appendix C and/or Appendix D, as applicable.

 

For the purpose of these guidelines, underwriting rules are those rules that a company uses to either decline all coverages to a risk, or to deny certain coverages to a risk, or to limit coverage in some way such as offering only higher deductible levels or lower liability limits. Underwriting rules deal with the coverage that will or will not be provided. Rating rules, on the other hand, are rules used in determining the rate that is applicable to the risk, once the decision has been made to accept the risk.

 

These guidelines are for underwriting rules only. Changes to rating rules must be submitted separately using the Private Passenger Automobile Filing Guidelines or the Other than Private Passenger Automobile Filing Guidelines, as appropriate. Where changes are being proposed to either rating rules or underwriting rules in respect of endorsements, the Endorsements Filing Guidelines must be used.

 

In these guidelines, PPA refers to private passenger automobile insurance. Other Categories refers to the following categories of automobile insurance:

 

  1. Personal Vehicles - Motorcycles
  2. Personal Vehicles - Motor Homes
  3. Personal Vehicles - Trailers and Camper Units
  4. Personal Vehicles - Off-road Vehicles
  5. Personal Vehicles - Motorized Snow Vehicles
  6. Personal Vehicles - Historic Vehicles
  7. Commercial Vehicles
  8. Public Vehicles - Taxis and Limousines
  9. Public Vehicles - Other than Taxis and Limousines

 

B. Explanation of Appendices

Appendix A: Summary of Information

You must complete Appendix A each time you make an underwriting rule filing. Appendix A can be found on ARCTICS.

 

This appendix is a summary of information in respect of the categories written and identifies changes to underwriting rules. You are required to confirm all the categories of automobile insurance you write, or do not write, each time you submit an underwriting rule filing.

Appendix B: Certificate of an Official

A certificate of an official (see Appendix B) must accompany each underwriting rule filing. Any official (e.g. Automobile Manager, Underwriting Manager) who has knowledge of the company's underwriting rules and has authority to bind the company may sign the form.

Appendix C: Underwriting rules for PPA

You must file Appendix C if you write PPA insurance on a non-fleet basis. Even if there are no changes to underwriting rules for PPA (e.g. if you are changing your existing underwriting rules for one of the Other Categories only), you must file Appendix C so that FSCO always has a consolidated set of all your underwriting rules.

 

The following information is to be provided in Appendix C:

 

Section A.

Number and list all underwriting rules for declining to issue, terminating or refusing to renew a contract; and

 

Section B.

Number and list all underwriting rules for refusing to provide or continue a coverage (e.g. not providing physical damage coverage(s) or declining certain deductible levels or liability limits), appropriately numbered; and

 

Section C.

Definitions (e.g. definition of at-fault accident, minor/major/serious convictions) and explanations to interpret the rules.

 

Sections A, B & C must begin on a separate page.

 

When listing underwriting rules for refusing to provide or continue a coverage, you must be specific as to what coverage will be refused or how it will be limited, and under which circumstances.

Appendix D: Underwriting rules for Other Categories

You must file Appendix D if you write any of the Other Categories of insurance on a non-fleet basis. Even if there are no changes to underwriting rules for Other Categories (e.g. if you are changing your existing underwriting rules for only PPA), you must file Appendix D so that FSCO always has a consolidated set of all of your underwriting rules.

 

Underwriting rules for Other Categories written on a non-fleet basis are to be listed in Appendix D. Where you use alternative rules for the different categories within Other Categories, file the rules in separate exhibits (e.g. for motorcycles it could be labelled as Exhibit D1, for motorhomes it could be labelled as Exhibit D2, etc.). If you have divided any of the Other Categories into sub-categories, please identify the sub-categories (by responding to question 2 in Appendix A) and attach separate exhibits if you use alternative rules for the sub-categories.

 

The following information is to be provided:

 

Section A.

Number and list all underwriting rules for declining to issue, terminating or refusing to renew a contract; and

 

Section B.

Number and list all underwriting rules for refusing to provide or continue a coverage (e.g. not providing physical damage coverage(s) or declining certain deductible levels or liability limits); and

 

Section C.

Definitions (e.g. definition of at-fault accident, minor/major/serious convictions) and explanations to interpret the rules.

 

When listing underwriting rules for refusing to provide or continue a coverage, you must be specific as to what coverage will be refused or how it will be limited, and under which circumstances.

 

C. Procedures

 

  1. You must submit an underwriting rule filing where:
      • there is a change of status (i.e. in writing or not writing) a category of automobile insurance; or
      • you are proposing a change to your underwriting rules.
  2. Each filing must contain a consolidated list of underwriting rules. Even if you are only proposing changes to underwriting rules for one category of automobile insurance, you must include underwriting rules for all categories of automobile insurance each time you submit a filing.
  3. Underwriting filings must be submitted by using our web-based filing system called ARCTICS. If you require a user I.D./password, please contact the “ARCTICS Main Contact” for your company who can arrange for access.
  4. Once we have reviewed the rules and there are no outstanding issues, you are required to provide revised automobile insurance manual pages to FSCO in electronic format within 30 days of approval of the filing, if the rules are included there. The insurer may be subject to regulatory action if it fails to file an automobile insurance manual filing using ARCTICS within this time frame.

 
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