(Toronto, ON) The Insurance Brokers Association of Ontario (IBAO) supports the need for a nimble, consumer focused, 21st century regulator. Framework legislation for the FSRA is contained in Bill 70, the Budget measures legislation tabled on November 16, 2016 by the Ontario government. However, the IBAO is urging the government to move cautiously and consult widely with respect to auto rate regulation and other aspects of the FSCO Mandate Review panel’s 44 recommendations. Legislation itself is silent on most of the policy-related recommendations contained in the panel’s report. The Fall Economic Statement (FES) says such decisions will be part of the process setting up FSRA once Bill 70 is passed.

IBAO BROKERS CAUTION AGAINST TOO MUCH, TOO SOON
“Ontario brokers are concerned that attempting to change the auto insurance rate regulation regime while simultaneously reconstituting a vital agency would be a distraction at best and destabilizing to the market at worst,” said Colin Simpson, IBAO CEO. “We are advocating for further consultation to review how any particular change to the existing regime will be implemented. We feel that, as advocates for Ontario consumers, we need to be at the table when changes are proposed and discussed prior to implementation.”

ENFORCEMENT & TRANSPARENCY
IBAO is supportive of most of the recommendations in the report pertaining to the property and casualty insurance sector, and is pleased with the focus on improving market conduct enforcement, including removing the resource and systemic barriers that constrain FSCO today. “IBAO made enforcement a key part of its submission – we are delighted the panel has embraced our suggestions wholeheartedly,” said Simpson. “If implemented, consumers will have far better protection.” IBAO is also pleased with recommendations encouraging intermediaries that sell like products to be regulated to the same standard and oversight. “Having different training and education standards across distribution channels is not in the best interest of the consumer. Brokers complete the industry’s most comprehensive training and education process on an annual basis – one reason why brokers are the best source of insurance advice.”

ADEQUATE CONSULTATION ON RATE REGULATION
Any move toward rate deregulation could have a significant impact on the insurance market and consumers in Ontario. It is imperative that further consultation on how this will be affected take place. The IBAO intends to be involved in discussions once Bill 70 moves forward and work begins on transitioning to a new regulator. As an experienced resource on matters of property and casualty insurance, especially where consumer protection is concerned, we look forward to working with the interim FSRA Board, its staff, Ministry of Finance officials and stakeholders to ensure the FSRA is the best consumer focused regulator it can be.

 

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