FSCO.TechNotes

Question 1

what classes of auto insurance does FSCO’s tech notes apply to?

Answer 1

non-fleet auto insurance on
- OAP1 (ON Auto Policy)
- OPF2 (ON Driver’s Policy)

Question 2

identify 5 categories of filing guidelines in FSCO’s tech notes

Answer 2

• PPA Major: when an insurer initially enters PPA market or changing existing auto insurance rates but changes proposed do not meet criteria for simplied
• PPA Simplified
• PPA Clear Simplified
• other than PPA major
• other than PPA minor

Question 3

identify legislative requirements for non-fleet auto rate filings in ON

Answer 3

• just and reasonable
• not impair solvency of insurer
• not excessive

Question 4

identify legislative requirements for non-fleet auto rate classification in ON

Answer 4

• just and reasonable
• reasonably predictive of risk
• distinguish fairly between risk

Question 5

identify 5 items of required information in an ON major rate filing

Answer 5

• loss related: loss data/development/rend
• premium info: OLP
• others: finance fees/tax rates/ expenses

Question 6

identify 2 requirements for loss data in an ON rate filing

Answer 6

• must be specific to ON
• must be at the major sub coverage level (Valuation data for loss reserving purposes may not satisfy this requirement)

Question 7

how long a period must be used in estimating the large loss provision and why?

Answer 7

no specific number of years but should be long enough to minimize statistical variations

Question 8

do rate filings have to show automobile insurance reform adjustment factors?

Answer 8

yes, must explain how loss data has been adjusted for insurance reforms for the effective period of the rates

Question 9

do rate filings have to use OLP?

Answer 9

yes

Question 10

what conditions must be met if an ON insurer is proposing to make territorial definition changes?

Answer 10

• ON <=55 terrs, Toronto <=10 terrs
• all territories must be contiguous (touching each other)
• new territories require 3 years of insurer data and 2500 annualized average vehicles over the period
• new adjoining territories donot vary by more than +-10%
• territory definitions are the same for all coverages
• large claims should be capped in establishing territorial rates

Question 11

what items must be included in an initial UBIP filing?

Answer 11

• what driving behaviors are being measured
• how this data is measured (freq, occurence)
• how this data is normalized and categorized for rating purposes (total occurrences, avg)
• loss data to support proposed UBI discount

Question 12

Can ON insurer rely on non-ON data at the introductory stage of UBIP?

Answer 12

yes

Question 13

identify UBIP program costs in a rate filing

Answer 13

• start up costs for the UBIP program
• on going expenses such as
  
  • data transfer and analysis
  • marketing
  • third party provider contracts

Question 14

once a new discount is approved, how long must an ON insurer continue to offer the discount and why?

Answer 14

3 years, to ensure stability in the market before the insurer can withdraw it from its risk classification system

Question 15

when is rate capping in ON not permitted?

Answer 15

• base rate changes only
• broker portfolio transfers or acquisitions
• premium decreases (negative capping)