FSCO Regulation 664

Question 1

Describe FSCO Regulation 664 regarding “Refusal to Issue Contracts”

Answer 1

• Can’t refuse because person is/was insured by FA or another insurer wouldn’t insure them
• Can’t consider physical/mental disability, health/life expectancy, occupation, income, employment history, credit history/info, residence history, net worth, existence of any other health insurance or sick leave plan, not-at-fault claims
• Above list also CAN’T be used in risk classification

Question 2

What does FSCO Regulation 664 say regarding Statutory Accident Benefits Schedule (SABS) settlements?

Answer 2

If insurer extends a settlement to the insured, the disclosure notice must include:
• The insurer’s offer
• Description of benefits available under SABS
• Statement that the insured may rescind the settlement within 2 business days of signing
• Consequences of the settlement - tax implications: insured’s right to litigate, mediate, and appeal
• Statement advising the insured to seek independent legal, medical, and financial advice
• Statement for signature by the insured acknowledging the disclosure notice

Question 3

FSCO Regulation 664 says that the insurer can have an “Expedited Rate Approval” if:

Answer 3

• Purposed rates must relate only to PPA

* Average cumulative rate change

Question 4

FSCO Regulation 664 lists several risk classification elements that are prohibited. List and Describe these elements.

Answer 4

• Insurer shall not consider occupation (excl. commr vehicles or vehicle used in business)
• Level of income (employment history, credit info/history/rating, bankruptcy history, net worth)
• Residence history and whether person owns a home
• Existence other health insurance or sick leave plan
• Any not-at-fault claims
• Shall not use past claims which an insured was 25% or less at-fault
• Whether the person has made premium payments that were late/dishonoured in respect of contracts of automobile insurance that was not terminated by this reason

Question 5

What is a Group Marketing Plan? What are the requirements under FSCO Regulation 664?

Answer 5

Arrangement made in writing between an insurer and a sponsor to market automobile insurance to members of an organized group. Consists of no fewer than 100 members, and has a group marketing plan:
• Trade union (Syndicat)
• Professional or occupational association
• Alumni association
• Nonprofit entity, at least 2 yrs old, not primarily buying/selling goods/services
• Group of employees of the same employer
• Group of members of a credit union (subject to certain conditions)

**Group cannot require members to purchase insurance under the plan or penalize them for not

Question 6

Dispute Resolution: When must a mediator attempt dispute settlement within?

Answer 6

Mediator is required to attempt to effect a settlement of a dispute within 60 days after the date on which the application for the appointment of a mediator is filed. Expenses are specified for such.

Question 7

Dispute Resolution: What are the only things an arbitrator can consider in awarding expenses incurred in arbitration?

Answer 7

• Each party’s degree of success in the outcome
• Any written offers to settle made
• Whether novel issues are raised in the proceeding
• Conduct to prolong or obstruct the proceedings
• Whether any aspect of the proceeding was improper, vexatious or unnecessary
• Whether insured did not undergo a required examination or provide required material