Automobile Insurance Rate Stabilization Act, 2003, S.O. 2003, c. 9

• Jurisdiction: Ontario

Automobile Insurance Rate Stabilization Act, 2003

S.o. 2003, chapter 9

Consolidation Period: From June 8, 2019 to the e-Laws currency date.

Note: On a day to be named by proclamation of the Lieutenant Governor, this Act is repealed. See: 2003, c. 9, s. 14.

Last amendment: 2018, c. 17, Sched. 4.

CONTENTS

Definitions

1 (1) In this Act,

“authorized rate” means, in respect of a contract of automobile insurance, the rate the insurer is authorized under this Act to charge on the issue or renewal of the contract; (“taux autorisé”)

“insurer” means a person who undertakes or agrees or offers to undertake a contract of automobile insurance and includes the Facility Association. (“assureur”) 2003, c. 9, s. 1; 2005, c. 31, Sched. 2, s. 1; 2013, c. 2, Sched. 1, s. 1 (1).

Interpretation

(2) Expressions used in this Act have the same meaning as in the Insurance Act, unless the context requires otherwise. 2013, c. 2, Sched. 1, s. 1 (2).

Section Amendments with date in force (d/m/y)

2005, c. 31, Sched. 2, s. 1 - 15/12/2005

2013, c. 2, Sched. 1, s. 1 (1, 2) - 16/08/2013

Application of Act

2 (1) This Act applies to insurers and contracts of automobile insurance, but only with respect to the Personal Vehicles — Private Passenger Automobile category of automobile insurance. 2013, c. 2, Sched. 1, s. 2 (1).

Same

(2) This Act does not apply to an insurer in respect of any category or coverage of automobile insurance for which the insurer is not required to make an application for approval under section 410 of the Insurance Act by reason of an exemption granted under subsection 413 (1) of that Act. 2003, c. 9, s. 2 (2).

(3) Repealed: 2013, c. 2, Sched. 1, s. 2 (2).

Section Amendments with date in force (d/m/y)

2013, c. 2, Sched. 1, s. 2 (1, 2) - 16/08/2013

Industry-wide rate reduction target

2.1 (1) This section establishes an industry-wide target for the reduction of rates that insurers are permitted to charge for the Personal Vehicles — Private Passenger Automobile category of automobile insurance. 2013, c. 2, Sched. 1, s. 3.

Target

(2) The target is a 15 per cent reduction in the average of the authorized rates that may be charged by all insurers. The average is to be determined in accordance with the regulations, and the reduction must be achieved during the period prescribed by regulation. 2013, c. 2, Sched. 1, s. 3.

Periodic reductions

(3) The regulations may provide for periodic reductions toward the target and may specify the period within which each such reduction must be achieved. 2013, c. 2, Sched. 1, s. 3.

Applications by insurers

(4) When making an application under section 3 or 7 or making written submissions under section 7.1, every insurer is required to propose a risk classification system and rates that contribute adequately to the achievement of the target. 2013, c. 2, Sched. 1, s. 3.

Contribution to achieving the target

(5) When making a decision under section 3, 7 or 7.1, the Chief Executive Officer shall consider such factors as may be prescribed by regulation and such other factors as the Chief Executive Officer considers reasonable in determining whether an insurer’s risk classification system and rates contribute adequately to the achievement of the target. 2013, c. 2, Sched. 1, s. 3; 2018, c. 17, Sched. 4, s. 1.

Presumption, consistency with rate reduction target

(6) For the purposes of clauses 3 (5) (a), 7 (7) (a) and 7.1 (1) (a), an insurer’s current or proposed risk classification system and rates are presumed not to be just and reasonable if, in the Chief Executive Officer’s opinion, they do not contribute adequately to the achievement of the target. 2013, c. 2, Sched. 1, s. 3; 2018, c. 17, Sched. 4, s. 1, 2.

Presumption, safe driving history

(7) For the purposes of clauses 3 (5) (a), 7 (7) (a) and 7.1 (1) (a), an insurer’s current or proposed risk classification system is presumed not to be just and reasonable unless it includes one or more elements that, in the Chief Executive Officer’s opinion, appropriately take into account the safe driving history of the persons who would be insured under a contract. 2013, c. 2, Sched. 1, s. 3; 2018, c. 17, Sched. 4, s. 1, 2.

Regulations

(8) The Lieutenant Governor in Council may make the regulations referred to in this section. 2013, c. 2, Sched. 1, s. 3.

Referral of regulations to Standing Committee

(9) Each of the following regulations stands permanently referred to the Standing Committee on General Government (established under the Standing Orders of the Assembly) when the regulation is filed with the Registrar of Regulations under section 18 of the Legislation Act, 2006:

1. Every regulation referred to in subsection (2) concerning the average of the authorized rates that may be charged by all insurers and concerning the period within which the 15 per cent reduction in the average of the authorized rates must be achieved.

2. Every regulation referred to in subsection (3) concerning periodic reductions toward the target and the period within which each such reduction must be achieved. 2013, c. 2, Sched. 1, s. 3.

Terms of reference

(10) The Standing Committee may examine the regulations with particular reference to whether they are reasonable in the circumstances and with respect to such other matters as the Standing Committee considers appropriate. 2013, c. 2, Sched. 1, s. 3.

Authority to call persons

(11) The Standing Committee may examine any member of the Executive Council or any public servant designated by the member respecting the regulations. 2013, c. 2, Sched. 1, s. 3.

Report

(12) The Standing Committee shall report its observations, opinions and recommendations about the regulations to the Assembly from time to time. 2013, c. 2, Sched. 1, s. 3.

Section Amendments with date in force (d/m/y)

2013, c. 2, Sched. 1, s. 3 - 16/08/2013

2018, c. 17, Sched. 4, s. 1, 2 - 08/06/2019

Application re risk classification system, rates

3 (1) Every insurer shall apply to the Chief Executive Officer for approval of,

(a) the risk classification system it intends to use in determining the rates for each coverage for the Personal Vehicles — Private Passenger Automobile category of automobile insurance; and

(b) the rates it intends to use for each coverage for that category of automobile insurance. 2013, c. 2, Sched. 1, s. 4; 2018, c. 17, Sched. 4, s. 1.

Material to be furnished

(2) An application for approval of a risk classification system or rates shall be in a form approved by the Chief Executive Officer and shall be filed together with such information, material and evidence as the Chief Executive Officer may specify. 2013, c. 2, Sched. 1, s. 4; 2018, c. 17, Sched. 4, s. 1.

Additional information

(3) The Chief Executive Officer may require an applicant to provide such additional information, material and evidence as the Chief Executive Officer considers necessary in order to make a decision with respect to the application. 2013, c. 2, Sched. 1, s. 4; 2018, c. 17, Sched. 4, s. 1.

Chief Executive Officer’s powers

(4) The Chief Executive Officer may make one or more of the following decisions with respect to an application:

1. Approve all or part of the application.

2. Refuse to approve all or part of the application.

3. Require the applicant to vary one or more of the elements of its proposed risk classification system.

4. Require the applicant to reduce or otherwise vary one or more of its proposed rates. 2013, c. 2, Sched. 1, s. 4; 2018, c. 17, Sched. 4, s. 1.

Criteria for refusal to approve, etc.

(5) The Chief Executive Officer shall refuse to approve all or part of an application and may require the applicant to vary one or more of the elements of its proposed risk classification system or to reduce or vary one or more of its proposed rates if, in the Chief Executive Officer’s opinion,

(a) the proposed risk classification system or proposed rate is not just and reasonable in the circumstances;

(b) the proposed risk classification system is not reasonably predictive of risk or does not distinguish fairly between risks;

(c) the proposed rates would impair the applicant’s solvency; or

(d) the proposed rates are excessive in relation to the applicant’s financial circumstances. 2013, c. 2, Sched. 1, s. 4; 2018, c. 17, Sched. 4, s. 1, 2.

Deemed approval

(6) An application under this section is deemed to have been approved by the Chief Executive Officer 60 days after the later of the following days, unless the Chief Executive Officer advises the applicant orally or otherwise within that 60-day period that the Chief Executive Officer has not approved the application:

1. The day the application is filed.

2. The day the additional information, material and evidence, if any, required by the Chief Executive Officer under subsection (3) is provided. 2013, c. 2, Sched. 1, s. 4; 2018, c. 17, Sched. 4, s. 1.

Decision final

(7) A decision, or deemed decision, of the Chief Executive Officer is final for all purposes. 2013, c. 2, Sched. 1, s. 4; 2018, c. 17, Sched. 4, s. 1.

Applications by affiliates

(8) Section 414 of the Insurance Act applies with necessary modifications to applications under this section. 2013, c. 2, Sched. 1, s. 4.

Section Amendments with date in force (d/m/y)

2013, c. 2, Sched. 1, s. 4 - 16/08/2013

2018, c. 17, Sched. 4, s. 1, 2 - 08/06/2019

Suspension of applications under Insurance Act

4 (1) No insurer shall apply to the Chief Executive Officer under section 410 of the Insurance Act for approval of a risk classification system or rates for the Personal Vehicles — Private Passenger Automobile category of automobile insurance. 2013, c. 2, Sched. 1, s. 5; 2018, c. 17, Sched. 4, s. 1.

Same

(2) No insurer shall submit or resubmit an application to the Chief Executive Officer under subsection 411 (5) of the Insurance Act for approval of a risk classification system or rates for the Personal Vehicles — Private Passenger Automobile category of automobile...