A - KPMG Regulatory Oversight Flashcards
KPMG Regulatory Oversight
7 types of rate regulation sorted by, active regulation, moderate regulation and competitive rating
- Government-mandated rates (active rate regulation)
- Prior approval (active rate regulation)
- File and use (moderate rate regulation)
- Use and file (moderate rate regulation)
- Flex rating (moderate rate regulation)
- File only (competitive rating)
- Open competition (competitive rating)
KPMG Regulatory Oversight
From West Coast to East Cost, provide the rate regulation system used in each province and territories.
- TERR: open competition for All Auto
- BC : gov-mandated for Basic Coverage, open competition for optional extended coverage
- AB : gov-mandated for PPA basic coverage, file and use for PPA optional coverage and other auto
- SK : gov-mandated for basic coverage, open competition for optional and excess coverage
- MA : gov-mandated for basic coverage, open competition for additional coverage
- ON : prior approval for PPA and other, file and use for other
- QC : gov-mandated for Personal BI, use and file for Auto other than personal BI
- NB : NBIB says Prior approval, Insurance Act says file and use (for All Auto)
- NS : Prior Approval for all Auto
- NF: Prior Approval, File and Use (for all Auto)
- PEI: File and Use (for all Auto)
KPMG Regulatory Oversight
Discuss Alberta Regulatory System
- Alberta Auto Insurance Rating Board (AIRB)
- Goal: to ensure rates are fair and predictable
GOVERNMENT-MANDATED RATES
- Grid maximum premiums for basic coverage (TPL and AB)
- Annual review of GRID premium
FILE AND USE
- Insurers can adjust rating variables for basic coverage by up to 10% if overall effect is revenue neutral
- File and use for optional covs and other auto
CRITERIA FOR REVIEW OF RATES
- a percent of premium profit provision
- fair and predictable rates
- rate stability over a 3-5 year horizon
- auto insurance market
KPMG Regulatory Oversight
Discuss Manitoba Regulatory System
GOVERNMENT MANDATED RATES
-Manitoba Public Insurance Corporation MPIC : basic mandatory coverage
-Reviewed by Manitoba Public Utility Board (MPUB)
OPEN COMPETITION
-From private insurers
-for additional coverage beyond basic coverage and for vehicle excluded from MPIC mandate
KPMG Regulatory Oversight
Discuss Saskatchewan Regulatory System
GOVERNMENT MANDATED RATES
-Saskatchewan Auto Fund (SAF) providing Liability, Personal Injury, Coll, Comp
-Rates reviewed by the Panel (for fairness and reasonableness)
OPEN COMPETITION
-Private insurer for optional/excess coverage
KPMG Regulatory Oversight
Discuss Yukon, Nunavut, and Northwest Territory Rate Regulation
OPEN COMPETITION
No requirement for rate filing
KPMG Regulatory Oversight
Discuss New Brunswick Regulatory System
New Brunswick Insurance Board
-Clearly an Active rate regulation however,
§ Insurance Act says it is File and Use
§ NBIB says it is Prior Approval
-Private insurers must file proposed rates at least 12 months from the date of last filing
-Following a filing, if NBIB investigates the proposed rates, insurer must not implement until NBIB approval.
CRITERIA FOR REVIEW OF RATES
Just and reasonable
Based on NB driver experience and company experience
KPMG Regulatory Oversight
Discuss Newfoundland Regulatory System
NL Board
PRIOR APPROVAL if there is some rate increases
FILE AND USE for decrease in rates
-Insurers permitted to file at any time
-Number of filings is not limited
-Must inform NL Board if no filing submitted in 12 months
CRITERIA FOR REVIEW OF RATES
rates are too high
KPMG Regulatory Oversight
Discuss Nova Scotia Regulatory System
PRIOR APPROVAL
-NSUARB requires mandatory rate filings for approval of rates
§ Every 2 years for PPA
§ Every 3 years for commercial auto and misc vehicles
CRITERIA FOR REVIEW OF RATES
- Just and reasonable rates
- Reasonably predictive of risk, distinguish fairly among rates
- Would not impair solvency, nor are excessive
KPMG Regulatory Oversight
Discuss Ontario Regulatory System
PRIOR APPROVAL for PPA
-simplified filing if:
§ no change to rating algo
§ on a overall basis, proposed rate change less or equal to 0%
§ Any terr base rate change between -15% and +5%
§ any other change to differential between -15% and +5% with no offbalancing.
CRITERIA FOR REVIEW OF RATES
- just and reasonable
- reasonably predictive of risk
- do not impair solvency
KPMG Regulatory Oversight
Discuss PEI Regulatory System
FILE AND USE
§ PEI Commission rewiews all rates
§ Insurer must submit filing at least once every year
§ Following a filing, if Commission decides to investigate the rates, insurer must refrain from implementing until commission approval
KPMG Regulatory Oversight
Discuss Quebec Regulatory System
GOVERNMENT MANDATED RATES
-Pure no-fault system
-SAAQ monopoly for BI
USE AND FILE
-Private insurer provides property damage coverage inside/outside QC
-Private insurer provides personal injury coverage for accident outside Qc.
KPMG Regulatory Oversight
Discuss British Columbia Regulatory System
Gov Mandated :
Insurance Corporation of BC (ICBC) is only provider of mandatory basic autoplan:
TPL, AB, Underinsured, Uninsured.
Open Competition :
Optional Extended Covs offered by ICBC and private insurers:
Extented TPL, XS underinsured, Coll, Comp, SP
insurers do not need to submit filing for optional coverages
