IBC Code of Conduct

Question 1

Purpose of the IBC Code of Conduct

Answer 1

Provide insurers who use credit info in their UW and rating activities for personal insurance with guidelines on the use of credit info in accordance with consumer protection and fed/prov laws

Applies to personal insurance only and does not apply to commercial insurance

Question 2

What are the guidelines for the use of credit information in the context of quoting, UW and rating?

Answer 2

• Ensure credit info is current and accurate
• Gather prior consent to collect & use credit Info
• Keep customer’s credit info confidential & private
• Use of credit as a sole variable
• Legitimate uses: Pricing, UW, Financing, Modelling
• Handling of consumer disputes
• Taking adverse action as a result of credit info
• Refusal of consent
• Extraordinary life circumstances

Question 3

When the insurer is gathering consent to collect and use credit information, the insurer must ensure the following?

Answer 3

• Must be informed
• Must not feel obliged
• Must understand the nature and scope of the request
• Must be specific and not presumed
• No one can give consent for another
• Insurer must maintain proof of consent
• Valid for as long as the PH has a continuous business relationship with the insurer

Question 4

What does IBC say about “Keep customers’ credit info confidential & private”?

Answer 4

• Only people who should have access to the info are those who require it
• Comply fully with consumer and privacy protection laws (PIPEDA)

Question 5

What does IBC say about “Use of Credit as a Sole Variable”?

Answer 5

Can’t refuse to quote/base renewal rates/deny/cancel/non-renew a policy based solely on credit info w/o consideration of non-credit variables

Question 6

What must insurers verify from credit model suppliers before using credit information?

Answer 6

Credit info must not be double-counted in rating. Verify the following are not used as a negative factor in any credit scoring models:
• Inquiries by the consumer for his own credit info
• Inquiries relating to insurance
• Income, gender, address, ethnic group, religion, marital status, or nationality of the consumer
• Multiple lender inquiries from the home mortgage industry or automobile lending industry and made within 30 days of one another
• Factors expressly prohibited in prov insurance regulations

Question 7

How should insurers handle consumer disputes regarding a customer’s credit information?

Answer 7

Handle complaints about the insurer’s use of credit in accordance with federal and provincial law

Question 8

What does the IBC say about “Taking Adverse Action as a Result of Credit Information”?

Answer 8

Insurers must treat fairly consumers w/o credit info:
• Shall not be denied coverage, cancelled w/o consideration of other applicable UW factors
• UW and rating will be based upon the relevant info which is available to the insurer

Question 9

What does IBC say about “Refusal of Consent”?

Answer 9

• Insurer can’t refuse to quote, provide coverage, cancel, or non-renew
• Must offer a competitive rate, but won’t qualify for credit discounts

Question 10

What does the IBC say about “Extraordinary Life Circumstances”?

Answer 10

If a customer believes that their credit info resulted in adverse action by their insurer and that their credit has been adversely impacted by an extraordinary life event, the customer can provide a written request detailing, with evidence, the event to the insurer