Dutil Flashcards

1
Q

What is the main objective of Facility Association?

A
  • Goal: Ensure avaibility of auto insurance for every driver by administering the involuntary residual market
  • Role: Administer the involuntary residual market of auto insurance on behalf of the private auto insurers in Canada
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2
Q

Provide the provinces in which FA is not operating. Briefly explain why

A
  • BC, MB & SK (Gov insurer)

* QC (PRR)

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3
Q

Provide the risk mechanisms of FA

A

1 - Risk Sharing Pools (prov: AB, ON, NS, NB, QC)
2 - FA Residual Markets (FARM)
3 - Uninsured Automobile Funds (in Atlantics)

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4
Q

Briefly describe Risk sharing pool

A
  • Invisible by consumer
  • Insurers transfer higher-risk exposures to an industry-wide pool
  • Cies uw policies under own rates and rules
  • Results pooled among all insurers (as all are required by law to belong to FA)
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5
Q

Briefly describe FARM

A
  • Known by consumer
  • Provides a residual market to customers who may otherwise have difficulty obtaining auto insurance
  • Servicing carrier issue and administer policies and adjust claims on behalf of FA
  • Subject to rates, rules and classification of FA
  • Results pooled among all insurers (as all required by law to belong to FA)
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6
Q

Briefly describe Uninsured Automobile Funds

A

(NB, NF, NS, PEI)
Provide compensation for damages to persons who:
• Cannot obtain it from an insurance contract
• Where no other insurance or non-sufficient insurance

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7
Q

Provide responsibilities of the BoD of FA

A

1 - Approving suggested rate changes and rate filings
2 - Maintaining standards to be followed by servicing carriers
3 - Authorizing expenses
4 - Appointing committees and sub-committees

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8
Q

Provide requirements for a risk to be eligible for transfer to a RSP

A

1 - Be PPA
2 - Risk not eligible to FARM
3 - Risk is insured to third-party liab limit (TPL)
4 - Insurer has follow classification and rating procedures
5 - Premium charged must be the approved for the risk

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9
Q

Briefly discuss the Ontario RSP

A
  • May not transfer more than 5% of voluntary PPA non-fleet TPL direct written car-years
  • Pool only covers 85% of every risk transferred
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10
Q

Briefly discuss the Alberta RSP

A

Grid pool:
• No limit on amount of risks that are transferable, since law requires insurance cies to accept risks for which they do not control price

Non-Grid pool:
• Max amount transferable is 4% of the voluntary PPV non-fleet written exposures not transferred to grid pool
• Purpose is to help cope with the take-all-comers environment in Alberta

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11
Q

Briefly discuss the New Brunswick RSP

A
  • For exposure where there is a driver receiving the “First Chance” discount
  • 8% of voluntary PPV non-fleet
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12
Q

Briefly discuss the Nova Scotia RSP

A
  • Inexperienced Driver” Risk Sharing Pool
  • Can only transfer risks for which one household member is a driver with less than 6 years of driving experience without any accidents or convictions
  • No limit on amount of risks transferable
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13
Q

List requirements to underwrite FARM policy

A

1 - It meets the min coverage of the jurisdiction
2 - It is a Residual Market Risk:
• Motor vehicle that is not a PPV
• PPV for which the insurer is authorized by law to decline or refuse te renew contract

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14
Q

Contrast RSP and FARM

A
  • Rates charged : Insurer’s rate vs FA rate
  • Admission : carrier UW rules vs if agent/broker can’t find cov
  • Customer knowledge: Unaware vs Aware
  • # clients: Depends on the province vs Unlimited
  • Coveraget: Any coverage vs min coverage at least
  • Participation ratio: Based on participation to the pool vs varies by LOB and AY
  • UW + claim admin: Ceding cies vs servicing carrier
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