January 29, 2010 Inside this issue:
■ Improving the
Auto Insurance Rate Filing Process
■ R&C Study of Filings ■ Efficiency through ARCTICS ■ Key performance measures
■ The R&C Teams
The Auto Insurance Services e-Newsletter provides updates to automobile insurance industry stakeholders on the regulatory activities of the Auto Insurance Services Branch (AISB) of the Financial Services Commission of Ontario. AISB oversees the regulation and support of the auto insurance system.
The newsletter is produced and distributed by the Financial Services Commission of Ontario (FSCO). For more information, visit FSCO’s website at
www.fsco.gov.on.ca.
Director’s Message
FSCO is pleased to launch the Auto Insurance Services e-Newsletter for automobile insurance stakeholders. The newsletter is part of our efforts to continually improve services and ensure that our actions as a regulator are transparent, efficient and effective. The newsletter aims to ensure that our clients know what to expect from our services, and understand their own responsibilities.
In the 2009 Statement of Priorities, FSCO identified the need to work with stakeholders to improve the rate filing approval process. Our first newsletter focuses on the Rates and Classifications Unit’s work and outlines the ways in which insurers can assist in improving the filing process.
The newsletter will also keep stakeholders informed of the progress of the auto insurance reforms. We plan to publish the newsletter semi-annually along with special issues as needed. We hope you enjoy our inaugural issue. Thank you,
Darlene Hall Director
Improving the Auto Insurance Rate Filing Process
Ensuring maximum efficiency in the automobile insurance rate filing process requires a partnership approach.
Our Service Commitments
In order to improve the rate filing process, FSCO staff will:
;
Update FSCO’s Filing Guidelines and Technical Notes on a regular basis (after consulting with insurers) to make them as clear as possible.
;
Update and post FSCO benchmarks on a regular basis.
;
Arrange pre-filing meetings as needed in order to understand your objectives and to facilitate completing the filings in a timely manner.;
Communicate regularly with you by:a. Sending an acknowledgement letter upon receipt of a rate filing.
b. Issuing an incomplete notice when documentation is missing.
c. Issuing technical questions to further our understanding of the filing.
d. Sending a letter following approval of the filing to identify issues to
take into account that could speed up approval of the next filing.
;
Work with the Insurance Bureau of Canada (IBC) through the Canadian Auto Insurers Rate Regulators Association (CARR) to harmonize filing requirements where possible.
Stakeholder Responsibilities
You can contribute to a smoother process by making sure to:
;
Request a meeting with Rates and Classifications Unit (R&C) staff before filing if you are proposing significant changes.
;
Review our Filing Guidelines and Technical Notes before filing.
;
Ensure you have carefully considered your proposed changes to avoid significant amendments to the filing after it is sent to R&C.
;
Have your materials peer-reviewed to ensure accuracy and completion before sending them to R&C.
;
Explain any significant changes in assumptions from prior filings.
;
Submit the filings through the web-based Automated Rates & Classifications Technical Information Communication System (ARCTICS).
;
Designate a primary contact person for the filing to avoid conflicting information and speed up approval.
;
Include a table of contents, page numbers, cross-referencing between exhibits, and a legible font size in the filing.
R&C Study of Filings
We are conducting a study of the filing process to identify areas where clearer filing guidelines can be developed and timelines for review and approval can be shortened. The first step in the study is to review the quality of filings being submitted. The quality grading system uses the criteria outlined below. As of October 31, 2009, about one-third of major private passenger auto rate filings were graded as “below
average”.
View FSCO’s guidelines on our website at
www.fsco.gov.on.ca.
FSCO is working with IBC and members of CARR to develop standardized rate
profiles
We suggest a pre-filing meeting if you are planning significant
We are introducing a new system to rate the
quality of filings submitted by companies
FSCO communicated filing requirements to
the industry in 2009
Our website is now more user-friendly
Quality Grade
The filing is complete; very well documented, organized and formatted; very easy to follow and understand; all exhibits and explanations are present and correct; contains very specific applicable information; contains good summaries.
Good
The filing is complete; neither Below Average nor Good. Average The filing is incomplete; not organized and poorly
documented; hard to follow and understand; exhibits are missing or incorrect; contradictions appear; too general – no specifics; contains information that is not applicable; no summary exhibits, response to questions are not complete.
Below Average
The most common reasons why the filings were considered below average are: • The filing was incomplete because it did not contain the necessary
supporting documentation (for example, there was missing data and exhibits, or incorrect data and exhibits, or cases where required exhibits were included only by reference to other portions of the filing).
• The documentation provided was of poor quality (for example, it had
erroneous or missing references, or otherwise was generally hard to follow or understand because of the way it was presented in the filing).
Communicating with the Industry
FSCO has communicated filing requirements to industry stakeholders and representatives in a number of ways. FSCO’s outreach included:
• Posting updated guidelines and technical notes on the FSCO website in
March 2009.
• Informing insurers’ representatives by e-mail of the updated guidelines.
• Issuing a newsletter through ARCTICS outlining the recent enhancements
and future changes.
• Making FSCO’s staff available to discuss the status of the company’s
filings.
In addition to informing industry of the updated guidelines, FSCO solicited industry input through FSCO’s Rating and Underwriting Technical Advisory Committee.
We also made improvements to make the website more user-friendly. The website now provides an index of Property & Casualty Auto Bulletins in one location; and only the most recent consolidated filing guidelines and bulletins for filing requirements are displayed online.
Finally, we have developed a notice which confirms the receipt of sufficient information from insurers. Insurers will be issued this notice once their filing is complete, and the review of major rate filings will begin.
Efficiency through ARCTICS and Compulsory e-Filing
FSCO’s Automated Rates and Classifications Technical Information System (ARCTICS) is operating successfully. ARCTICS benefits both insurers and FSCO by improving efficiency, communication and consistency.The percentage of filings submitted through ARCTICS is increasing. In 2008, close to 60 per cent of all filings were sent online. In 2009, the number had increased to 80 per cent. ARCTICS is currently optional, but by January 2011, it will be mandatory for insurers.
Increasing efficiency through automation
FSCO will require insurers to file exclusively using the ARCTICS system by January 1, 2011.
ARCTICS was designed to be user-friendly and FSCO continues to make improvements based on feedback from users.
The system has a new look and feel, and a more detailed activity screen has been added to display the relevant information for filings. A new message page was created to broadcast general messages from FSCO and display confidential ones for your company. The system’s speed has also been improved, and the process of entering information is faster.
Key Performance Measures on Filings
We have compiled performance measures for the filing approval process for the 2008 and 2009 fiscal years. Highlights are:
• The number of Private Passenger Auto (PPA) Major rate filings approved by
FSCO increased to 46 from 31 in the previous year for the same period. • The average number of days to review and approve a PPA Major filing
remained at 55 days, even with a 33 per cent increase in the number of filings.
The R&C Teams
The sound working relationships between R&C analysts, managers and insurance company rate filing staff have facilitated the joint resolution of a range of issues. FSCO facilitates this collaborative approach by dedicating individual analysts to companies and groups in the industry. Analysts can familiarize themselves with companies' business models and strategies, making their analysis of filings more expert and efficient.
Just over a year ago, R&C made additional improvements to this approach. R&C staff was divided into two teams with companies assigned to one of two teams. All members of a team are now familiar with a company’s filings, strategies and business models.
FSCO will provide regular updates on key performance measures for the filing approval
process
Was this newsletter forwarded to you?
Contact us at
autoinsurance.einfo@ fsco.gov.on.ca
and you can have the newsletter delivered
You can contact the members of our teams, their Team Leads, and other R&C staff by telephone or email. R&C welcomes your comments and questions, and we will respond within one business day.
The R & C Teams (in alphabetical order)
Philip Adridge Rate Analyst 416-590-7296 [email protected] Faye Chong
Senior Rate Analyst 416-590-7296 [email protected] Anna Hahamovich Team Lead 416-590-7125 [email protected] Van Norris
Senior Rate Analyst 416-590-7045 [email protected]
Fabio Fantin Senior Rate Analyst 416-590-7018 [email protected] Michael Manella Senior Rate Analyst 416-590-2012 [email protected] Mirella Mendicino Sood Rate Analyst 416-590-7181 [email protected] Janette Watt Team Lead 416-590-8465 [email protected] Jennifer Scott Administrative Support Officer 416-226-7868 [email protected] Tony Lyon
Senior Technical Analyst 416-590-7124 [email protected] Nick Polsoni Senior Manager 416-590-7019 [email protected]
Contact Us
Auto Insurance Services Branch Auto Insurance Division
Financial Services Commission of Ontario 5160 Yonge Street, Box 85
Toronto, Ontario M2N 6L9 Telephone: (416) 250-7250 Fax: (416) 590-7265 Toll-free: 1-800-668-0128 TTY (416) 590-7108, 1-800-387-0584 Email: contactcentre@fsco,gov.on.ca www.fsco.gov.on.ca
