Alberta Record

· Order in Council / Automobile Insurance Premiums Amendment Regulation · in-force

Oic 2023 222 automobile insurance premiums amendment regulation

This Order in Council amends the Automobile Insurance Premiums Regulation, granting the Board new authority to order insurers to file rating program changes and require the return of excess premiums, and mandating insurers to offer premium…

High impactCentralization of powerInstitutional independenceIndependent watchdogsThe public, directly

What changed

  • Introduces a definition for "premium payment plan" for automobile insurance, specifying different structures before and after January 1, 2025.
  • Grants the Board new authority to order insurers to file changes to their rating programs based on market or legislative developments.
  • Authorizes the Board to require insurers to return excess premiums to policyholders if profitability exceeds established targets.
  • Mandates insurers to offer premium payment plans to policyholders for private passenger vehicles, with specific exceptions.
  • Requires insurers to charge a consistent and reasonable rate or fee for all premium payment plans offered.
  • Amends the Insurance Enforcement and Administration Regulation to include non-compliance with the new provisions as an offence.

Why it matters

  • Centralizes decision-making regarding insurer rating programs by enabling the Board to proactively direct changes.
  • Expands the Board's oversight and regulatory capacity over insurer profitability and premium collection practices.
  • Shifts some financial risk from policyholders to insurers by allowing the Board to mandate the return of excess premiums.
  • Increases consumer protection by requiring insurers to offer flexible payment options, potentially improving access to insurance.
  • Reduces insurer discretion in setting payment terms and managing profitability, subject to Board intervention.
  • Establishes new enforceable obligations for insurers, backed by potential penalties for non-compliance.

Other governance concerns

  • Increased regulatory burden on insurers
  • Potential for reduced flexibility for insurers in managing rating programs and profitability
  • Enhanced consumer protection for policyholders regarding premium payments and potential refunds
  • Expansion of government oversight into private sector pricing and financial management

Primary sources (1)

Secondary sources (2)