Ontario auto insurance regulator seeks file-and-use rate system

Published: August 5, 2019

Updated: September 1, 2019

Author: Luke Jones



The regulator in charge of auto insurance in Ontario is considering a “file-and-use” system for private passenger auto rate changes in the province. Financial Services Regulatory Authority (FSRA) officials recently announced the proposal, saying it will help insurers be more dynamic with their pricing.

“We are close to introducing a new standard rate filing process that will operate on a ‘file and use’ basis,” wrote Tim Bzowey, FSRA’s executive vice president of auto insurance, in a newsletter. “This means insurers can, when acting within FSRA defined boundaries, implement rates in a matter of days.”

In a corresponding filing last week, the Co-operators General Insurance Company highlighted how the file-and-use proposal would function.

“With the help of an advisory group consisting of senior industry professionals, including from The Co-operators, [FSRA] recently proposed a new ‘file and use’ standard rate filing process that will allow insurers to increase their rates up to a specified amount, every 12 months, more efficiently and effectively. The proposed rate filing process awaits FSRA board approval before becoming available for use.”

FSRA has not said if creating the file-and-use system would require a change in Ontario’s legislation, but it would require the authority’s board to decide on its use. The regulator has not said when the board is expected to make an announcement.

Still, Bzowey insists such a system “should save weeks and, in some cases, months, of time between seeking and implementing new rates.”

Under current Ontario auto insurance laws, personal private auto insurance providers must seek approval from FSRA (and previously FSCO) before implementing rate changes. Insurers have long complained this over complicated the process and harms the customers. In contrast, commercial auto in the province uses a file-and-use system.

“FSRA’s proposed file and use is a huge improvement on the current situation,” an Insurance Bureau of Canada spokesperson told Canadian Underwriter. “We are very happy how collaborative and engaging FSRA has been through the process.  Our view will be that a more competitive operating environment leads to more competition, more innovation products including discounts, more price stability, and more market entrants.”