Proposed Fraud and Abuse Strategy for the Auto Insurance Sector.
Bill or Act:
Summary of Proposal:
The Ministry of Finance (MOF) and Financial Services Regulatory Authority of Ontario (FSRA) are consulting on a Fraud and Abuse Strategy (F&A Strategy) that will aim to sustainably reduce system costs that drive up auto insurance premiums for drivers.
In the current auto insurance sector, "insurance fraud and abuse" is neither defined in legislation nor regulation, nor is there an accurate quantification in the size and scope of fraud and abuse. Past governments, regulators and industry have attempted different approaches to identify and measure fraud and abuse. As a result, the industry has taken individualized approaches for managing fraud and abuse, which has created further inconsistencies.
Furthermore, there are limited tools available for FSRA, regulated entities and the general public to tackle fraud and abuse, when it is suspected or proven. This, again, has resulted in inconsistent approaches, but has also highlighted the need to develop solutions that would prevent bad actors from entering the system, replace inefficient processes, reduce costs and improve public confidence and safety.
Public feedback is being requested to evaluate the following:
- Offering data or evidence in support of the expected costs and benefits of specific initiatives and the F&A Strategy overall;
- Identifying additional initiatives for consideration; and
- Understanding any risks, limitations or unintended consequences of any one initiative.
Based on the above, MOF and FSRA will consider next steps for the F&A Strategy.
Analysis of Regulatory Impact:
June 11, 2021
Comments Due Date:
July 12, 2021
Fraud and Abuse Consultation
Financial Institutions Policy Branch
Ministry of Finance
95 Grosvenor Street Floor 4
Toronto ON M7A 1Y7