KPMG.RegOv Flashcards

1
Q

Identify the 3 types of rate regulation approaches.

A
  1. Active
  2. Moderate
  3. Competitive
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2
Q

Identify the 2 subtypes of active rate regulation approaches.

A
  1. Government mandated
  2. Prior Approval
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3
Q

Briefly explain the Government mandated rate regulation approach and give examples of provinces using it.

A

Gov sets rates, rate changes and risk classification.
Ex: Alberta GRID, BC, QC -BI cov

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4
Q

Briefly explain the prior approval rate regulation approach and give examples of provinces using it.

A

Gov approves rates, rate changes and risk classification before use.
Ex: ON for major filings, NS

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5
Q

Identify the 3 subtypes of moderate rate regulation approaches.

A
  1. File & Use
  2. Use & File
  3. Flex Rating
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6
Q

Briefly explain the File&Use rate regulation approach and give an example of province using it.

A

Insurer files and regulators have a predetermined period to approve before use.
Ex: PEI

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7
Q

Briefly explain the Use&File rate regulation approach and give an example of province using it.

A

Insurer uses rates, rate changes and risk classification and then files with regulators.
Regulators could decide to change rates retroactively within a set period.
Ex: QC

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8
Q

Briefly explain the flex rating regulation approach.

A

Insurer uses rates, rate changes and risk classification provided rate changes are within a certain range.
**Not used in Canada

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9
Q

Identify the 2 subtypes of competitive rate regulation approaches.

A
  1. File only
  2. Open competition
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10
Q

Briefly explain the file only rate regulation approach.

A

Insurer files, but no review is required.

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11
Q

Briefly explain the open competition rate regulation approach and give examples of provinces using it.

A

No filing required.
Ex: NU, YU, NWT

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12
Q

Identify the 2 main regulatory concerns for auto insurance

A

Availability & Affordability

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13
Q

Identify 3 external conditions affecting rate regulation.

A
  1. Market cycle
  2. Economic conditions
  3. Politics
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14
Q

Identify 4 advantages of switching from Prior Approval to Use & File approach.

A
  1. Less rate volatility (faster rate updates)
  2. Lower rates (lower filing costs since simpler)
  3. More competition & innovation
  4. Regulators can focus on solvency
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