Ontario auto insurance consumers would like the option to purchase a scaled-down auto insurance policy tailored to their individual needs and budget, a speaker said at an industry event last week by the Financial Services Regulatory Authority of Ontario (FSRA).
“Insurers are currently not permitted to provide choice and optionality with respect to the auto insurance product because it is locked into legislation beyond the jurisdiction of ARSF,” says Stephen A. Fuller, head of international government affairs and senior vice president of TCI Global, with The Travelers Companies Inc. “I think Ontario consumers would like the ability to purchase a scaled-down auto insurance policy tailored to their needs. individuals… budgeting for what they really need. I think that sounds good.
Fuller’s comments came during a discussion of principles-based regulation (PBR) at FSRA’s first-ever FSRA 2022 exchange event, held on Jan. 27. learning and learning environment. One element of the test and learn environment is to review new auto insurance models that do not fit within existing regulatory parameters.
“What if FSRA’s innovation framework doesn’t allow companies to touch the product? I fear there are only marginal gains when it comes to the innovation framework, at least for the auto insurance industry,” Fuller says.
“Conclusion: In my mind, FSRA has very strong leadership, technical expertise, insights and proximity to the file, but needs more empowerment to deal with the auto insurance product if Ontario is to be seen as an attractive market for new market entrants, for new insurance companies, and to keep current insurers healthy, creative and innovative, so they can provide the best possible service to Ontario consumers.
Fuller was responding to a question from moderator Jordan Soloway, the FSRA’s executive vice president of legal and enforcement, about whether ACB is enough and “Ontario’s auto silver bullet.” Soloway also asked if PBR was the right system to handle deep innovative change.
“Innovation is not, by definition, beneficial at all levels,” says Dr. Cristie Ford, a professor at the Allard School of Law at the University of British Columbia. “I think it’s not reasonable to assume that innovation is always going to somehow lift all boats, or is going to be in line with the kinds of goals the regulator wants to see. Understanding who is innovating, in what contexts and for what purposes is essential.
“Innovation will always have huge potential and huge risks,” adds Cristie. “Innovation of a significant scale can bring improvements to individual industry players and the public.”
Featured image by iStock.com/Gina Staios