New law allows auto insurers to give premium rebates to Ontario drivers during pandemic

The Ontario government has removed a barrier that some auto insurance companies were using to avoid giving rebates to their insureds during the pandemic. Some insurers had already implemented rebate schemes on a voluntary basis, but others were citing existing regulations as preventing them from doing so.

The Province has therefore amended a regulation under the Insurance Act which will allow auto insurance rebates to consumers for up to 12 months after the declared emergency has ended.

In a media release, Rod Phillips, Minister of Finance, said, “We are in an unprecedented time and people are experiencing extraordinary financial pressures. My message to insurance companies has been clear: they should provide relief that reflects the financial hardships their dedicated customers are facing due to the COVID-19 outbreak.”

“All of us will remember how companies treat us during these unprecedented times. I often remind business leaders that their customers from the past five years are likely to be their customers for the next five years,” said Phillips. “Insurance companies indicated that the regulation preventing rebates was a barrier to providing relief to their customers. That barrier has now been removed so auto insurance companies can step up and do the right thing for the people and families of Ontario.”

The Government and the Financial Services Regulatory Authority of Ontario (FSRA) will continue to work together to monitor how the auto insurance sector is responding.

QUICK FACTS

• Ontario is the first jurisdiction in Canada to remove existing restrictions on rebating so auto insurers can provide additional consumer relief.
• The rebating prohibition is designed to protect consumers from being misled in purchasing decisions based on a rebate and to provide consumer protection from insurers who may discriminate between consumers.
• Auto insurance policy terms generally last for 12 months. The 12-month time period of this regulation would allow insurers to provide rebates to all policyholders, regardless of their annual policy renewal date.
• The Financial Services Regulatory Authority of Ontario (FSRA) is an independent regulatory agency designed to improve consumer and pension plan beneficiary protections in Ontario. FSRA is responsible for monitoring compliance with and enforcing the Insurance Act and its regulations.

Hogeveen,E.(2020,Apr.16) Ontario Enables Auto Insurance Companies to Provide Driver Rebates During COVID-19 [media release]

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