What is the take-all-comers rule?
Ontario’s auto insurance regulator, the Financial Services Regulatory Authority of Ontario (FSRA), is focusing on insurers that refrain from providing auto policies to residents in specific cities or that violate the “Take-All-Comers” rule. To enhance the effectiveness of auto insurance for drivers in Ontario, feedback was gathered from both industry professionals and the public regarding this rule.
Legally, insurers must ensure that all consumers in Ontario receive timely auto insurance quotes and access to the most competitive rates available. As an insurance provider in Ontario, failing to renew a client’s auto policy—regardless of whether the client has missed a payment—may lead to increased scrutiny from the provincial regulator. Ontario legislation prohibits insurers from denying the issuance, termination, or non-renewal of an auto policy or endorsement, unless valid grounds have been submitted to the FSRA.
The Insurance Companies Act serves as the principal legislation regulating all insurance companies that are federally incorporated or registered in Canada. Its primary objective is to guarantee that no motorist is denied insurance coverage, mandating that all auto insurers in the province incorporate all risk categories into their underwriting practices and pricing structures. This consumer protection initiative is known as Ontario’s “Take-All-Comers” rule.
Insurers, agents, and brokers are legally required to:
– Provide consumers with the most competitive rate available
– Present all eligible consumers with a quote or renewal option
– Accept all auto insurance applications from consumers who meet the insurers’ established criteria
According to Ontario’s Insurance Act, the Take-All-Comers rule encompasses three key stipulations:
1. Section 237 forbids insurers from refusing to issue, canceling, or declining to renew an auto policy or endorsement based on any prohibited grounds specified in the regulations.
2. Section 238 restricts insurers from refusing to issue, canceling, or declining to renew an auto policy or endorsement, except on grounds that have been submitted to the FSRA.
3. Section 2(1)(8) of Regulation 7/00 concerning Unfair or Deceptive Acts or Practices (UDAP) mandates that insurers must offer consumers the lowest available rate when they request a quote for automobile insurance, submit an application to an affiliated insurer, or receive a renewal offer from an affiliated insurer, in accordance with the insurer’s established declination criteria and approved rates and risk classification systems.
A delay in providing a quote is considered a refusal of coverage and can only be justified based on the criteria outlined in the insurer’s approved underwriting rules filed with the FSRA.