FSCO.PPA

Question 1

prohibited risk classification elements

Answer 1

C-Cones
- Claims where fault <=25%: past claims from accidents after 9/1/2010 for which an insured was <=25% at fault
- Credit history
- Occupation with exceptions
- Net worth
- Employment
- Salary

Question 2

does this comply with ON regulations?
retiree discount on all coverages

Answer 2

yes.
this is required by ON regulations

Question 3

does this comply with ON regulations?
multi-line discount varying by property product

Answer 3

no
multi line discounts are permitted, but they CANNOT vary by property product (cannot have diff discount rates for diff line, ex: 10% for houses and 5% for condos)

Question 4

good credit discount
does this comply with ON regulations?

Answer 4

no
use of credit in ON personal auto is not permitted

Question 5

can an insurer cancel your policy if you become unemployed
?

Answer 5

no

Question 6

can an insurer non renew because of a drunk driving conviction?

Answer 6

yes
it is ok to use convictions for underwriting

Question 7

can an insurer lower your rates because your salary increased?

Answer 7

no

Question 8

can an insurer change your rates because you moved?

Answer 8

yes

Question 9

can an insurer raise your rates if you become an uber driver?

Answer 9

yes, use is a valid rating variable

Question 10

can an insurer lower your rates because you own a certain credit card?

Answer 10

no, credit history as well as number or type of credit cards is a prohibited risk classification element

Question 11

list 2 types and 2 subtypes of approval process offered by ON

Answer 11

1) prior approval (PPA, FA)
- major requirements
- simplified guidelines
2) file and use (other than PPA, commercial)
- major requirements
- minor requirements

Question 12

describe UDAP (Unfair or Deceptive Acts or Practices) requirement regarding rate levels among affiliates

Answer 12

it is unfair or deceptive 欺骗性的 if the insurer fails t provide the lowest rate among all affiliates

Question 13

describe FSCO prior approval and give examples of vehicle classes to which it applies

Answer 13

• FSCO must approve RRR before rates can be used
• ex:
  1) PPA on OAP1 (PPA written using standard ON auto policy
  2) FA

Question 14

describe FSCO expedited approval and give examples of vehicle classes to which it applies

Answer 14

• expedited approval is a type of prior approval with approval in 30 days
• ex:
  1) PPA on OAP1
  2) FA is excluded

Question 15

describe FSCO file and use and give examples of vehicle classes to which it applies

Answer 15

• insurer must file RRR, then regulators have 30 days to approve otherwise rates can be used without approval
• ex:
  1) other PPA
  2) commercial auto
  3) endorsements
  4) FA is excluded

Question 16

what is OPCF-44R?

Answer 16

• coverage for underinsured motorist
• it is the difference between your TPL limit and at fault driver’s TPL limit

Question 17

identify regulatory requirements when changing territory factors in a major filing (different than simplified filing)

Answer 17

• rebase current/indicated/proposed territorial relativities
• calculate indicated/proposed change
• check
  
  • indicated and proposed changes have the same sign
  • magnitude (proposed change) < magnitude (indicated change)
  • magnitude (proposed change) <10%

Question 18

officer certifications in major filings (timing and officer qualifications)

Answer 18

• qualifications: CEO. COO, CFO, chief agent of Canada
• always required

Question 19

what are the 4 filing items must an officer certify?

Answer 19

GRIE
- effective dates: for new and renewal business
- guidelines: must certify compliance
- info/data: certify accuracy and completeness
- rates: reasonable, not unfairly discriminatory, don’t impair solvency

Question 20

actuarial certifications in major filings (timing and qualifications)

Answer 20

• FCIA
• when rates change or there is a new LoB

Question 21

what are the 6 filing items must an actuary certify?

Answer 21

EVA-DAR
- Effective dates
- Vehicle classification system
- actuary Authorized by insurer
- Data is Rel Suff
- AAP used
- Risk classification system is reasonable

Question 22

is actuary’s certification needed for fleets?

Answer 22

no, but it is needed for
- endorsements
- commercial vehicles insured by FA
- FA

Question 23

what information is generally required in a rate filing?

Answer 23

• data, narrative: all steps for rate changes
• assumptions and methods: regulators should be able to trace steps from raw data to final rates
• not required: a specific methodology mandated by FSCO

Question 24

describe the treatment of loss data in filing regarding reinsurance

Answer 24

Exclude
- reinsurance should not impact price charged to insured

Question 25

S2018Q2 F2013Q8

Question 26

describe the treatment of loss data in filings regarding cession to RSP

Answer 26

Include - as if never ceded

Question 27

describe the treatment of loss data in filings regarding cession to farm losses

Answer 27

Exclude - FA sets their own prices using FARM loss data

Question 28

identify 4 factors affecting the length of loss trend period

Answer 28

- policy term - effective date: proposed effective date of rate change - calculation date: valuation date of loss data

Question 29

describe the general properties of coverages where premium trends are required

Answer 29

- coverages with inflation sensitive exposure bases - where mix of business is changing - for clear filings: but premium trend is already accounted for in development of rate groups CLEAR= Canada Loss Experience Auto Rating

Question 30

why might FSCO not approve an auto filing?

Answer 30

- insurer used prohibited rating variable - insurer's risk classification system is not reasonable or not sufficient to predict losses