Transcript Automobile Insurance Rate Filing Process

Financial Services Commission
of Ontario (FSCO)
Automobile Insurance Rate Filing Process
Presentation for OCCA
December 6, 2006
www.fsco.gov.on.ca
OUTLINE
• Summary of 2006 Private Passenger Rate Changes
• Updates to Rate Filing Guidelines
• ARCTICS
www.fsco.gov.on.ca
Summary of Private Passenger
Rate Changes
• 122 PPA Rate Filings Approved to date (101 filings
approved in 2005)
• 49 CLEAR Filings approved to date (48 in 2005)
• Average rate change approved in:
 2004:
 2005:
 Q3/2006:
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-10.6%
-2.43%
-1.32%
Summary of Changes to Rate
Filing Guidelines and Technical
Notes 2006
• Consolidated set of guidelines to be released this
month. Last consolidated version issued in 2001.
• The titles of the filing guidelines have changed. Easier
to understand and changes do not have to be made
every time the legislation changes.
• Filing Guidelines are:
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Private Passenger Automobile - Major
Private Passenger Automobile - Simplified
Private Passenger Automobile - CLEAR Simplified
Other Than Private Passenger Automobile - Major
Other Than Private Passenger Automobile – Minor
Summary of Changes to Rate
Filing Guidelines and Technical
Notes 2006
• Includes any Regulation changes over the last 5 years:
 fleet, Group membership, prohibition of
lifestyle rating variables, standard deductibles
• Reference to ARCTICS is made
• Rate Manual section of Filing Guidelines (to be
submitted in hard copy and electronic copy (email/CD))
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Summary of Changes to Rate
Filing Guidelines and Technical
Notes 2006
• Some changes to Appendix A
e.g.
e.g.
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Change question #9. to reflect
Return on Premium
Change the dislocation
requirement from +15.0% to
+10.0%
Summary of Changes to Rate
Filing Guidelines and Technical
Notes 2006
• Amend current Certificate of Officer to reflect pre or
post approval Certificate/Attestation regarding
implementation and testing of rate changes (Appendix
B)
• New CLEAR Simplified Filing Guidelines
 Filing is required annually
 Vehicle rate group table update
 Companies can use the CLEAR Simplified Filing
Guidelines to update the vehicle rate group table and/or
make the required changes to the physical damage base
premiums if the rate group drift has not been taken into
account within the last 9 months
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Summary of Changes to Rate
Filing Guidelines and Technical
Notes 2006
• Other Than Private Passenger Filing Guidelines
 Major & Minor - Updated risk profiles –
companies will be notified to complete and
submit
 Added a new criteria for Major – Company will
have to submit a Major filing if it has not
submitted a filing within the last 3 years and
the proposed rate change is greater than 10%
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Summary of Changes to Rate
Filing Guidelines and Technical
Notes 2006
• Updates to Technical Notes
 Current GST level and Health Services Levy
 Splitting of BI and PD for credibility reasons
 Use of prior indications as compliment of
credibility – issues have been raised
 Updated benchmarks for loss trends/auto reform
factors
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Summary of Changes to Rate
Filing Guidelines and Technical
Notes 2006
• Updates to Technical Notes
 Further details on Profit allowance, including
Investment Return on cashflow – updated to reflect
the actual formulas
 Edit regarding discounts/surcharges – data to
support proposal is required (FSCO will consider
non-Ontario data)
 Territorial Definition Changes - require colored maps
when territorial definition changes are being made
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ARCTICS: Canada’s First OnLine Auto Insurance Rate Filing
System
Automated Rates and Classifications Technical Information
Communication System
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Benefits of ARCTICS
• Improve Delivery of Service
• Efficiency through technology
• Improves speed of filing and approval process
• Reduces paper use and record storage
• Provides a historical on-line record of insurers’ filings
www.fsco.gov.on.ca
Background
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Launched in May 2005
12% usage in 2005
37% usage in 2006
165 Registered Users with Passwords
Released ARCTICS Newsletter and updated User
Manual in November 2006
Training is available
Access Form must be completed to obtain passwords
One main contact for each company
Actuarial Consultants can use ARCTICS once
insurance company provides authorization
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ARCTICS uses SSL technology
during the login process…
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Clients can start a new ARCTICS
filing on-line…
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Options are highlighted as the
client navigates ARCTICS’
screens…
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Files can be attached to
ARCTICS’ Table of Contents
and submitted…
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Appendix questions can be filled
in on-line…
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…and validation of completion
checked automatically
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ARCTICS’ auto-fill feature fills
in fields based on previous
data…
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ARCTICS automatically
calculates totals whenever
possible…
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Certificates can be completed online using ARCTICS…
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The submitted filing is available
for viewing in ARCTICS…
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Clients can view details of their
new ARCTICS filing…
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ARCTICS incorporates a
calendar tool…
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ARCTICS logs events during
client sessions for future
reference…
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Entries are automatically checked
for validity in ARCTICS…
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ARCTICS has online help
available…
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Thank You
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