FSCO.PPA Flashcards
prohibited risk classification elements
C-Cones
- Claims where fault <=25%: past claims from accidents after 9/1/2010 for which an insured was <=25% at fault
- Credit history
- Occupation with exceptions
- Net worth
- Employment
- Salary
does this comply with ON regulations?
retiree discount on all coverages
yes.
this is required by ON regulations
does this comply with ON regulations?
multi-line discount varying by property product
no
multi line discounts are permitted, but they CANNOT vary by property product (cannot have diff discount rates for diff line, ex: 10% for houses and 5% for condos)
good credit discount
does this comply with ON regulations?
no
use of credit in ON personal auto is not permitted
can an insurer cancel your policy if you become unemployed
?
no
can an insurer non renew because of a drunk driving conviction?
yes
it is ok to use convictions for underwriting
can an insurer lower your rates because your salary increased?
no
can an insurer change your rates because you moved?
yes
can an insurer raise your rates if you become an uber driver?
yes, use is a valid rating variable
can an insurer lower your rates because you own a certain credit card?
no, credit history as well as number or type of credit cards is a prohibited risk classification element
list 2 types and 2 subtypes of approval process offered by ON
1) prior approval (PPA, FA)
- major requirements
- simplified guidelines
2) file and use (other than PPA, commercial)
- major requirements
- minor requirements
describe UDAP (Unfair or Deceptive Acts or Practices) requirement regarding rate levels among affiliates
it is unfair or deceptive 欺骗性的 if the insurer fails t provide the lowest rate among all affiliates
describe FSCO prior approval and give examples of vehicle classes to which it applies
- FSCO must approve RRR before rates can be used
- ex:
1) PPA on OAP1 (PPA written using standard ON auto policy
2) FA
describe FSCO expedited approval and give examples of vehicle classes to which it applies
- expedited approval is a type of prior approval with approval in 30 days
- ex:
1) PPA on OAP1
2) FA is excluded
describe FSCO file and use and give examples of vehicle classes to which it applies
- insurer must file RRR, then regulators have 30 days to approve otherwise rates can be used without approval
- ex:
1) other PPA
2) commercial auto
3) endorsements
4) FA is excluded
what is OPCF-44R?
- coverage for underinsured motorist
- it is the difference between your TPL limit and at fault driver’s TPL limit
identify regulatory requirements when changing territory factors in a major filing (different than simplified filing)
- rebase current/indicated/proposed territorial relativities
- calculate indicated/proposed change
- check
- indicated and proposed changes have the same sign
- magnitude (proposed change) < magnitude (indicated change)
- magnitude (proposed change) <10%
officer certifications in major filings (timing and officer qualifications)
- qualifications: CEO. COO, CFO, chief agent of Canada
- always required
what are the 4 filing items must an officer certify?
GRIE
- effective dates: for new and renewal business
- guidelines: must certify compliance
- info/data: certify accuracy and completeness
- rates: reasonable, not unfairly discriminatory, don’t impair solvency
actuarial certifications in major filings (timing and qualifications)
- FCIA
- when rates change or there is a new LoB
what are the 6 filing items must an actuary certify?
EVA-DAR
- Effective dates
- Vehicle classification system
- actuary Authorized by insurer
- Data is Rel Suff
- AAP used
- Risk classification system is reasonable
is actuary’s certification needed for fleets?
no, but it is needed for
- endorsements
- commercial vehicles insured by FA
- FA
what information is generally required in a rate filing?
- data, narrative: all steps for rate changes
- assumptions and methods: regulators should be able to trace steps from raw data to final rates
- not required: a specific methodology mandated by FSCO
describe the treatment of loss data in filing regarding reinsurance
Exclude
- reinsurance should not impact price charged to insured
S2018Q2
F2013Q8
describe the treatment of loss data in filings regarding cession to RSP
Include
- as if never ceded
describe the treatment of loss data in filings regarding cession to farm losses
Exclude
- FA sets their own prices using FARM loss data
identify 4 factors affecting the length of loss trend period
- policy term
- effective date: proposed effective date of rate change
- calculation date: valuation date of loss data
describe the general properties of coverages where premium trends are required
- coverages with inflation sensitive exposure bases
- where mix of business is changing
- for clear filings: but premium trend is already accounted for in development of rate groups
CLEAR= Canada Loss Experience Auto Rating
why might FSCO not approve an auto filing?
- insurer used prohibited rating variable
- insurer’s risk classification system is not reasonable or not sufficient to predict losses
