Regulatory harmonization and auto reform top FSCO priorities

Ontario’s insurance regulator will have its hands full again in 2004 with changes to the auto insurance system, as illustrated by its “statement of priorities”.Auto insurance changes and regulatory harmonization feature heavily in the document, which outlines the 2004-2005 mandate for the Financial Services Commission of Ontario (FSCO). Although FSCO was hard at work implementing regulations to support Bill-198 through the last year, it will continue to implement auto insurance reform on several fronts. Top of the list is implementing some kind of alternative to the Designated Assessment Center (DAC) system the new system was to have been outlined by the end of June, but the government decided to scrap its original proposal for an expert assessor network and go back to the drawing board. FSCO will also be working on a risk-based market conduct review of general insurance claims, focusing in part on Statutory Accident Benefits (SABS). The regulator will work to provide enhanced information on auto insurance costs, rate and consumer rights and responsibilities, responding to the consumer backlash against rising auto rates which prompted legislative reform in the first place. And FSCO wants to establish stable funding for the Motor Vehicle Accident Claims Fund, as well as looking into undisclosed changes to the Facility Association the industry’s pool for high-risk drivers.On the technology front, FSCO wants to move its automated rates and classification technical information communication system (ARCTICS) from pilot to full production. This system allows for online filing of auto insurance rates. And the regulator wants to enhance reporting of financial results for auto insurers.In terms of regulatory harmonization, FSCO is working with other provincial regulators to develop model wording provisions for property insurance, and identify areas of market conduct regulation that can be harmonized nationally. It also wants to advance risk-based marked conduct and prudential regulation, and look to harmonize its rules for reinsurers with federal regulation. Intermediaries can look for progress on national harmonization of reciprocal licensing requirements.The full statement of priorities can be found at www.fsco.gov.on.ca.