Regulation - LGIC
Proposed amendments to Ontario Regulation 664 (Automobile Insurance) under the Insurance Act regarding increasing the minor accident property damage threshold; and proposed amendments to the Insurance Act and regulations under the Insurance Act and the Compulsory Automobile Insurance Act regarding expanding the use of electronic communications between an insurer and an insured, and clarifying requirements for notices sent by prepaid courier.
Regulation Number(s):
O. Reg. 664
O. Reg. 777/93
O. Reg. 676
O. Reg. 34/10
O. Reg. 95
O. Reg. 777/93
O. Reg. 676
O. Reg. 34/10
O. Reg. 95
Instrument Type:
Regulation - LGIC
Bill or Act:
Insurance Act
Summary of Proposal:
1. Amending the Minor Accident Property Damage Threshold
To better align with current vehicle repair and replacement costs, in March 2024 amendments to Regulation 596 (General) under the Highway Traffic Act were approved that, effective January 1, 2025, amend the threshold for mandatory reporting of property damage in collisions from $2,000 to $5,000.
In harmonization with these changes, the Ministry of Finance is seeking feedback on amendments to Ontario Regulation 664 (Automobile Insurance) under the Insurance Act to:
• Amend the minor accident property damage threshold to prescribe that the cost of damage to each automobile, including any associated property damage, did not exceed $5,000. This threshold is currently $2,000.
2. Modernizing and Clarifying Permitted Means of Communications
The 2019 Ontario Budget included a commitment to make the consumer insurance experience easier and more convenient by facilitating electronic communications through proposed amendments to the Insurance Act and the Compulsory Automobile Insurance Act.
In January 2022, amendments to Ontario Regulation 777/93 (Statutory Conditions - Automobile Insurance) under the Insurance Act came into effect permitting insurers to give an insured a notice of termination of an automobile insurance contract by electronic means, if the insured consents to delivery by electronic means.
To further this commitment to make the consumer insurance experience easier and more convenient, the Ministry of Finance is seeking feedback on:
• Amendments to the Insurance Act to permit insurers to give an insured a notice of termination of an insurance contract by electronic means, if the insured consents to delivery by electronic means, for:
a) Accident and Sickness Insurance contracts; and
b) Property and Casualty Insurance contracts.
Currently, insurers are permitted to terminate these types of insurance contracts by giving the insured a notice of termination of an insurance contract by: (i) registered mail; (ii) personal delivery; or (iii) prepaid courier. If approved, the proposed amendments will provide insurers an additional means of giving termination notices.
3. Clarifying Requirements for Notices Sent by Prepaid Courier
To clarify potential ambiguity with respect to insurers giving notices by prepaid courier, and to provide greater certainty and enhance consumer protection, the Ministry of Finance is seeking feedback on:
• Amendments to the Insurance Act and regulations under the Insurance Act and the Compulsory Automobile Insurance Act, to permit insurers to give an insured a notice of termination of an insurance contract by prepaid courier if there is a record by the person who delivered it that the notice has been "delivered", rather than the current requirement that the notice has been "sent".
• Amendments to the Insurance Act to enhance consumer protection by harmonizing when the notice period commences to run for a notice of termination of an accident and sickness insurance contract sent by prepaid courier with the current requirements for fire insurance contracts and automobile insurance contracts. If approved, this amendment would add one additional day to when the notice period commences to run for accident and sickness insurance contracts.
The Ministry of Finance requests comments regarding these proposed amendments.
A consultation draft of these proposed amendments is attached.
To better align with current vehicle repair and replacement costs, in March 2024 amendments to Regulation 596 (General) under the Highway Traffic Act were approved that, effective January 1, 2025, amend the threshold for mandatory reporting of property damage in collisions from $2,000 to $5,000.
In harmonization with these changes, the Ministry of Finance is seeking feedback on amendments to Ontario Regulation 664 (Automobile Insurance) under the Insurance Act to:
• Amend the minor accident property damage threshold to prescribe that the cost of damage to each automobile, including any associated property damage, did not exceed $5,000. This threshold is currently $2,000.
2. Modernizing and Clarifying Permitted Means of Communications
The 2019 Ontario Budget included a commitment to make the consumer insurance experience easier and more convenient by facilitating electronic communications through proposed amendments to the Insurance Act and the Compulsory Automobile Insurance Act.
In January 2022, amendments to Ontario Regulation 777/93 (Statutory Conditions - Automobile Insurance) under the Insurance Act came into effect permitting insurers to give an insured a notice of termination of an automobile insurance contract by electronic means, if the insured consents to delivery by electronic means.
To further this commitment to make the consumer insurance experience easier and more convenient, the Ministry of Finance is seeking feedback on:
• Amendments to the Insurance Act to permit insurers to give an insured a notice of termination of an insurance contract by electronic means, if the insured consents to delivery by electronic means, for:
a) Accident and Sickness Insurance contracts; and
b) Property and Casualty Insurance contracts.
Currently, insurers are permitted to terminate these types of insurance contracts by giving the insured a notice of termination of an insurance contract by: (i) registered mail; (ii) personal delivery; or (iii) prepaid courier. If approved, the proposed amendments will provide insurers an additional means of giving termination notices.
3. Clarifying Requirements for Notices Sent by Prepaid Courier
To clarify potential ambiguity with respect to insurers giving notices by prepaid courier, and to provide greater certainty and enhance consumer protection, the Ministry of Finance is seeking feedback on:
• Amendments to the Insurance Act and regulations under the Insurance Act and the Compulsory Automobile Insurance Act, to permit insurers to give an insured a notice of termination of an insurance contract by prepaid courier if there is a record by the person who delivered it that the notice has been "delivered", rather than the current requirement that the notice has been "sent".
• Amendments to the Insurance Act to enhance consumer protection by harmonizing when the notice period commences to run for a notice of termination of an accident and sickness insurance contract sent by prepaid courier with the current requirements for fire insurance contracts and automobile insurance contracts. If approved, this amendment would add one additional day to when the notice period commences to run for accident and sickness insurance contracts.
The Ministry of Finance requests comments regarding these proposed amendments.
A consultation draft of these proposed amendments is attached.
Analysis of Regulatory Impact:
These proposed amendments, if approved may have limited transition costs for the insurance sector relating to system changes. These costs are expected to be offset by longer term savings. There is no anticipated impact on the broader Public Service or non-profit sectors.
Further Information:
Regulation 664 (Automobile Insurance) Amendments
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Regulation Amendments Related to Permitted Means of Communication
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Insurance Act Amendments Related to Permitted Means of Communication
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Proposal Number:
24-MOF017
Posting Date:
August 23, 2024
Comments Due Date:
October 7, 2024
Contact Address:
Property & Casualty Insurance Policy Unit
Financial Institutions Policy Branch
Ministry of Finance
95 Grosvenor Street
Frost Building North, 4th Floor
Toronto, ON
M7A 1Z1
Financial Institutions Policy Branch
Ministry of Finance
95 Grosvenor Street
Frost Building North, 4th Floor
Toronto, ON
M7A 1Z1