Insurer wants to remove FSCO approval for auto insurance rate increases
Published: August 30, 2018
One president of a mutual insurer believes the new Progressive Conservative government in Ontario should give private insurers the ability to hike premium rates without permission from the Financial Services Commission of Ontario. The executive believes this enough that he will take his opinion straight to the new finance minister.
Louis Durocher, president and CEO of Heartland Farm Mutual Inc. says the approval step with the FSCO is unnecessary, although filing new rates with the regulatory body “makes sense”.
“I am planning on going down to meet with FSCO and talk to them about the fact that we are a mutual,” Durocher told Canadian Underwriter.
“We are not very large. We need to make sure we have adequate rates and right now we are quite far from this. I am hoping [FSCO] will be open to looking at our case and see if we can get approval for a bit more rate.”
Under laws in Ontario, private insurance companies must seek approval from the FSCO before implementing any changes in rates. This system involves the insurance provider submitting its proposed rate change. The FSCO then decides whether to approve the rating or not.
Heartland has already been awarded approval for a recent 5% increase in auto insurance, but Durocher says this is not sufficient. He says trying to get a higher rate hike is tough and admits finding the exact number needed is hard to know.
“Our knowledge (now) of what rate increase we need may not reflect the reality just a few months from now,” said Durocher, referencing the unstable market in Ontario.