Study 11 Flashcards
What became mandatory for drivers as automobile insurance evolved?
Certain types of coverage
Laws were passed by provincial and territorial governments specifying the types of minimum coverages needed and the penalties for driving without them.
In which province is mandatory basic automobile insurance provided through the government?
British Columbia
How is automobile insurance provided in most provinces and territories?
By private insurers
What is a measure in place to guarantee access to insurance for drivers who have difficulty obtaining coverage?
Facility Association
In provinces where the government provides basic insurance, what cannot government insurers do?
Decline a risk
What does this study discuss regarding consumer protection?
Measures that protect consumers and guarantee access to insurance
Including the impacts of legislation governing insurance, the impacts of consumer protection legislation, the Facility Association, risk sharing pools, and the Quebec Risk Sharing Plan.
Fill in the blank: The _______ Association is a measure to guarantee access to insurance.
Facility
True or False: Government insurers in provinces with government-provided basic insurance can refuse to provide coverage.
False
What are some impacts discussed in relation to consumer protection legislation?
Impacts of legislation governing insurance, impacts of consumer protection legislation, Facility Association, risk sharing pools, Quebec Risk Sharing Plan
What is the purpose of the Insurance Companies Act in British Columbia?
Deals with federal licensing and supervision of insurance companies and solvency standards for insurers enforced through the Office of the Superintendent of Financial Institutions (OSFI)
This act is part of the federal government’s exclusive power over money and banking.
What does the Insurance Corporation Act establish?
Sets up the Insurance Corporation of British Columbia (ICBC) and provides it with the authority to do business in all classes of insurance and operate the universal compulsory automobile insurance plan
ICBC has been restricted to automobile insurance since the 1980s.
What is the main focus of the Insurance (Vehicle) Act?
Contains provisions covering both the universal compulsory automobile insurance plan and optional insurance contracts
ICBC is mandated to provide the universal compulsory vehicle insurance plan, known as Autoplan.
What does the Insurance (Vehicle) Regulation prescribe?
Details of Autoplan as set out in the Insurance (Vehicle) Act
Regulations cannot amend or alter the concept of the parent statute.
What is defined by the Basic Vehicle Damage Coverage Regulation?
Details of compensation for vehicle damage when a driver is not at fault
It was required when BC transitioned to a no-fault compensation system in 2021.
What does the Motor Vehicle Act regulate?
Registration and licensing of motor vehicles, licensing of drivers, traffic control on highways, and proof of financial and safety responsibility
The purchase of basic Autoplan is tied to a vehicle’s registration.
What benefits does the Enhanced Accident Benefits Regulation provide?
Health care, rehabilitation and related expenses benefits, recreation benefits, general expenses, caregiver benefits, death benefits, catastrophic injury benefits, and volunteer expenses
It includes provisions about entitlement to benefits and procedural requirements when applying for benefits from ICBC.
Fill in the blank: The _______ Act contains provisions for the universal compulsory automobile insurance plan.
[Insurance (Vehicle)]
True or False: The Insurance Corporation of British Columbia (ICBC) was originally authorized to conduct business in various classes of insurance.
True
ICBC has since restricted its operations to automobile insurance.
What is the maximum limit for Basic Vehicle Damage Coverage (BVDC) set by the Basic Vehicle Damage Coverage Regulation?
$200,000
This limit is established in Section 15(2) of the regulation.
Who enforces the solvency standards for insurers according to the Insurance Companies Act?
Office of the Superintendent of Financial Institutions (OSFI)
What is Autoplan?
The universal compulsory vehicle insurance plan mandated by ICBC
It is required for vehicle owners in British Columbia as part of the licensing procedure.
Fill in the blank: The _______ Regulation accompanies the Insurance (Vehicle) Act and prescribes the detail of Autoplan.
[Insurance (Vehicle)]
What happens if a vehicle is not insured or premiums are unpaid?
May result in the suspension of a vehicle licence or driver’s licence
This can also lead to the suspension of insurance privileges.
What is required by law for automobile owners in British Columbia?
Auto insurance
Automobile owners must have auto insurance as mandated by law.
Who regulates automobile insurance in British Columbia?
British Columbia Financial Services Authority (BCFSA)
BCFSA is responsible for regulating insurance companies in British Columbia.
What statutes does BCFSA administer regarding insurance?
- Financial Institutions Act
- Insurance Act
- Insurance (Captive Company) Act
These statutes govern various aspects of insurance regulation in British Columbia.
What is the role of the Insurance Council of British Columbia?
Regulates the activities of insurance agents and adjusters
The council ensures ethical conduct and competence among insurance professionals.
What does ‘one-stop shopping’ refer to in the context of insurance transactions in British Columbia?
Combined vehicle registration, licensing, and insurance transactions
Brokers perform all three transactions for customer convenience.
Which federal laws bind Canadian insurers regarding privacy?
- Privacy Act
- Personal Information Protection and Electronic Documents Act (PIPEDA)
These laws regulate how personal information is handled by insurers.
What does the Privacy Act impose on federal government departments?
Obligations to respect privacy rights and limit personal information handling
The Act allows individuals to access and correct their personal information held by the government.
What is the purpose of PIPEDA?
Sets ground rules for private-sector organizations on personal information handling
PIPEDA applies to the commercial activities of insurers and brokers.
What is the role of a privacy officer within an insurance company?
Ensures compliance with privacy laws and handles personal information
The privacy officer develops and maintains the company’s privacy policy.
What must insurers designate to handle complaints?
Complaints liaison officer or ombudsperson
This individual addresses disputes regarding claims management.
What process does ICBC have for clients with unresolved issues?
Fairness process for addressing client concerns
Clients can escalate issues through various levels of management.
What does the Digital Privacy Act of 2015 enhance?
Privacy rights and protections for Canadians
The Act includes mandatory breach notifications and compliance agreements.
What is ICBC’s obligation regarding personal information?
Comply with the Freedom of Information and Protection of Privacy Act (FIPPA)
ICBC must protect insureds’ personal information as a public-sector organization.
What topics are covered in ICBC’s privacy policy?
- Collection of personal information
- Purpose and manner of collection
- Access or use of personal information
- Disclosure of personal information
- Retention of personal information
- Accountability
- Accuracy of personal information
- Security of personal information
- Individual access to personal information
- Inquiries, complaints, and suggestions
The privacy policy outlines ICBC’s commitment to protecting insureds’ privacy.
What is the primary objective of the Facility Association?
To provide automobile insurance to licensed drivers who may have difficulty obtaining insurance in the regular market.
The Facility Association operates as a safety net for high-risk drivers.
When was the Facility Association created?
1977
It was established to assist drivers in obtaining insurance coverage.
What does the term ‘voluntary market’ refer to?
The regular market where most drivers obtain automobile insurance without difficulty.
What is a ‘tight’ market in automobile insurance?
A market condition where underwriting standards are adjusted, leading to fewer insurance options available.
List the key objectives of special industry programs for insurance availability.
- Immediate availability of a market to agents and brokers and the public
- Equitable sharing of the residual market by all insurers
What determines whether a risk qualifies for insurance through the voluntary market?
The underwriting rules of various automobile insurers.
In which province does the Insurance Corporation of British Columbia (ICBC) provide basic insurance?
British Columbia
ICBC is a Crown corporation with a mandate to provide basic insurance to all drivers.
What is the Plan of Operation in the context of the Facility Association?
The approved operational guidelines that govern the Facility Association’s activities.
How do insurers share in the operations of the Facility Association?
Based on their market share of automobile business in the jurisdictions where the Association operates.
What are servicing carriers in the Facility Association?
Designated members who issue policies and provide services on behalf of the Association.
What is the role of the Board of Directors in the Facility Association?
To administer the Association, comprising senior officials of member companies.
True or False: Agents and brokers can use the Facility Association if they have difficulty in the voluntary market.
True
Fill in the blank: The Facility Association operates under the legislative authority of the _______.
[Insurance Acts of respective provinces and territories]
What is the purpose of the Risk Sharing Pool Procedures Manual?
To outline the procedures for sharing risks among insurers in the Facility Association.
What must servicing carriers do upon receipt of a Facility Association application?
Issue a standard automobile policy and provide necessary services, including claims service.
What is the relationship between the Facility Association and industry costs?
The operations of the Facility Association need to be subsidized by the insurance industry.
Which provinces require government insurers to provide basic coverage to all residents?
- Manitoba
- Saskatchewan
What happens to the results of the total industry pool in the Facility Association?
They are statistically recorded and shared by members on a monthly basis.
What is the significance of the ‘Claims Guide’ maintained by the Facility Association?
It provides guidelines for handling claims within the Association.
True or False: Private insurers in British Columbia can deny basic coverage to drivers.
False
What does the Facility Association manage?
Risk sharing pools for private passenger vehicles in all provinces except Manitoba, British Columbia, Saskatchewan, Prince Edward Island, and Quebec.
These pools help manage higher-than-average risks that meet underwriting guidelines.
What are ‘grey’ private passenger risks?
‘Grey’ risks are those that meet underwriting guidelines but still present higher-than-average risk.
Insurers cannot decline these risks and must write them at normal rates.
What is the role of insurers in risk sharing pools?
Insurers can choose to keep ‘grey’ business or transfer it to the pool.
They retain 15 percent of premiums and claims when policies are ceded to the pool.
When did the Ontario risk sharing pool begin operating?
This pool allows insurers to manage ‘grey’ policies effectively.
What are the two risk sharing pools operating in Alberta?
Grid pool and non-grid pool.
The grid pool is for exposures subject to statutory maximum premium, while the non-grid pool is for eligible exposures up to a predefined maximum.
What is the purpose of the ‘first chance’ risk sharing pool in New Brunswick?
To allow underwriters to transfer certain private passenger automobile exposures eligible for a ‘first chance’ discount.
This discount is for new drivers obtaining their license for the first time.
What does the inexperienced driver risk sharing pool in Nova Scotia target?
Operators with less than six years of driving experience and a clear driving record.
The pool provides affordable insurance for these drivers.
What is the policy for transferring ‘grey’ policies in Newfoundland and Labrador’s pool?
Insurers can cede ‘grey’ policies to the pool.
These risks may meet underwriting guidelines but still have elements indicating a higher likelihood of loss.
How do insurers share the results of the risk sharing pools in Alberta, New Brunswick, Newfoundland and Labrador, and Nova Scotia?
Insurers cede 100 percent of premiums and claims and share results according to their market share.
This excludes business submitted to the pools.
Does Nova Scotia have a limit for transferring business to the risk sharing pool?
No, there is no limit.
However, limits apply in New Brunswick, Newfoundland and Labrador, and Alberta.
What varies by province in the risk sharing pools?
The expense allowance.
Each province has different rules regarding expenses associated with the pools.
What is the name of the risk sharing plan administered by the Groupement des assureurs automobiles in Quebec?
Plan de répartition des risques (PRR)
The PRR supports insurers in providing access to automobile insurance for all Quebec automobile owners.
Which automobile insurers in Quebec are exempt from participating in the PRR?
Insurers that do not write any automobile third-party liability insurance
All other licensed automobile insurers in Quebec must participate.
What is the primary function of the PRR?
To allow insurers to transfer risks that do not meet their underwriting criteria into a shared pool
This helps in managing risks and providing coverage.
How are the underwriting profits or losses and administration costs shared among PRR participants?
In the ratio of their percentage of the total automobile written volume in Quebec
This ensures fair distribution based on the volume of insurance written.
What happens if a risk has a record of highway code infractions when transferred to the PRR?
The PRR requires that the standard premium be surcharged by a specified percentage
This is to account for the increased risk associated with infractions.
Can insurers withdraw risks from the PRR during a policy period?
Yes, insurers can withdraw risks at any time within a policy period
The appropriate information must be submitted electronically or on paper.
What is provided back to the insurer by the PRR to cover specific costs?
An allowance of the premium transferred
This covers policy issuing, servicing costs, regular claims settlement expenses, and premium taxes.
How does the PRR ensure compliance with its procedures?
Through an exhaustive audit system
This system ensures that companies follow the stipulated procedures for risk transfer and claims settlement.
Who decides to transfer a risk to the PRR?
The insurer solely makes the decision
Insureds are usually unaware of the PRR’s involvement in their coverage.
How do brokers typically manage less attractive risks?
They try to distribute those risks among the various companies they represent
This helps balance the distribution of residual market risks.
Has the extent of coverages that can be transferred to the PRR changed over time?
Yes, it has increased progressively
Most insurers have also automated their operations with the PRR.
True or False: The PRR is widely known to the public.
False
The PRR is almost unknown to the public and many brokers.
What are the key pieces of legislation governing insurance conduct in British Columbia?
Insurance Companies Act, Insurance Corporation Act, Insurance (Vehicle) Act and Regulation, Basic Vehicle Damage Coverage Regulation, Motor Vehicle Act, Enhanced Accident Benefits Regulation
These statutes provide the framework for insurance regulation and are supplemented by various regulations.
Who regulates insurance companies in British Columbia?
British Columbia Financial Services Authority (BCFSA)
BCFSA is responsible for overseeing the insurance industry in the province.
What federal acts govern the handling of personal information by Canadian insurers?
Privacy Act, Personal Information Protection and Electronic Documents Act (PIPEDA)
These acts establish rules for the collection, use, and disclosure of personal information.
What is the relationship between British Columbia’s Personal Information Protection Act and PIPEDA?
British Columbia’s Personal Information Protection Act has been declared substantially similar to PIPEDA
This means that both acts share similar principles regarding personal information protection.
What does the Freedom of Information and Protection of Privacy Act (FIPPA) address?
Access and privacy rights of individuals in relation to the public sector in British Columbia
FIPPA applies to public sector organizations, including ICBC.
What is the purpose of the Facility Association?
To provide automobile insurance to owners and operators who may have difficulty obtaining insurance through the voluntary market
The Facility Association operates in various jurisdictions and involves all insurers writing automobile liability insurance.
What is the role of servicing carriers in the Facility Association?
To issue policies and provide agents and brokers with policyholder service for business submitted to them
Servicing carriers receive expense allowances from the membership to compensate for their services.
In which provinces does the Facility Association manage risk sharing pools for private passenger vehicles?
All provinces except Manitoba, British Columbia, Saskatchewan, Prince Edward Island, and Quebec
These pools allow insurers to transfer certain higher-than-average risk exposures.
What is the Plan de répartition des risques (PRR) in Quebec?
A risk sharing plan administered by the Groupement des assureurs automobiles that allows insurers to transfer risks not meeting their underwriting criteria into a shared pool
The underwriting profit or loss and administration costs are shared among participants.
True or False: The operations of the Facility Association do not need to be subsidized by the industry.
False
The operations of the Facility Association require industry subsidies.
Fill in the blank: The _______ sets out ground rules for how private-sector organizations may collect, use, or disclose personal information.
Personal Information Protection and Electronic Documents Act (PIPEDA)
PIPEDA applies to the private sector across Canada.
