Regulator issues final guidance outlining good practice for managing operational risk in auto insurance pricing and underwriting
TORONTO, September 20, 2022 /CNW/ – To Help Consumers Receive Fair, Reasonable, and Accurate Automobile Insurance Rates and Fair Treatment in the Underwriting Process, FSRA Issues Final Operational Risk Management Framework Guidance for car insurance companies.
Through consultation and research, FSRA has identified gaps within the industry in operational risk management and governance model.
This information guide is intended to describe basic and sound operational risk management practices in automobile insurance pricing and underwriting. Insurance companies can also apply these practices to manage model risk.
“ARSF is working hand-in-hand with the industry to help businesses close the gaps and better manage their operational risk while providing fair rates and treatment in the underwriting process for consumers,” said Tim Bzowey, executive vice president of auto and insurance at FSRA. “This is part of ARSF’s broader strategy to improve regulatory effectiveness in from Ontario auto insurance industry. We think something will benefit both consumers and car insurance companies now and in the future.”
This guide outlines the steps insurance companies should take to manage operational risk. These include:
- Identifying risks
- Risk assessment
- Risk prioritization and mitigation
- Risk monitoring and reporting
This information guide is part of FSRA’s broader strategy to reform rate and underwriting regulation in from Ontario auto insurance sector, which is a priority of FSRA’s 2022-2025 annual business plan.
In response to comments received during the consultation December 8, 2021 at February 25, 2022FSRA amended the guidance to reflect stakeholder feedback as identified in the consultation summary, including regulatory harmonization, implementation of operational risk management, and clarification of technical details .
This guidance will come into effect on September 20, 2022.
FSRA continues to work on behalf of all stakeholders, including consumers, to ensure financial security, fairness and choice for all. Learn more at www.fsrao.ca.
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Financial Services Regulatory Authority
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SOURCE Financial Services Regulatory Authority of Ontario