Regulation

The federal and provincial governments regulate the P&C insurance industry, which is composed of the companies that insure homes, vehicles and businesses. The provincial governments regulate market conduct, and the federal government’s Office of the Superintendent of Financial Institutions (OSFI) is the industry’s primary prudential (solvency) regulator.

While it is impossible to pinpoint the exact costs associated with regulatory compliance by the industry, it’s estimated that they are in the hundreds of millions of dollars.

Auto insurance, in particular, is very highly regulated. The provincial governments determine the content of auto insurance policies, how claims are handled and how complaints are managed; they also administer rate approval systems. IBC is advocating for auto insurance reform in several provinces, including Alberta, Ontario, Nova Scotia and New Brunswick.

Through IBC, the P&C insurance industry advocates for effective, principles-based regulation that would permit insurers to offer the products and services that consumers need and want. IBC engages with regulators and governments to push for regulations that protect consumers while cultivating innovation and competitiveness in the marketplace.

IBC is committed to working with regulators to understand the issues they are trying to solve, and to making meaningful contributions to help solve those issues. IBC’s members are diverse and range from large, multinational insurance companies to small mutual and niche insurers, offering specialized coverage to a smaller customer base. This means that effective regulatory solutions cannot be one-size-fits-all and must take into account those differences.

Market conduct

Market Conduct regulation is the purview of provincial and territorial governments, and refers to the regulation of insurers’ governance, practices and policies with respect to the treatment of consumers. Market conduct measures help ensure fair treatment of customers – that is, home, car and business policyholders – throughout the insurance sales, distribution and claims settlement cycle. For instance, insurers are required to complete an Annual Statement on Market Conduct every year.

Provincial and territorial regulators belong to an association called the Canadian Council of Insurance Regulators (CCIR), which has a mandate to develop solutions to common issues faced by regulators across the country. IBC engages with CCIR on behalf of its members to discuss the industry's perspectives on new or revised market conduct expectations in respect of CCIR's guiding principles. The FTC (Fair Treatment of Customers) Guidance has been in effect since 2018.

IBC also monitors global regulations to assess their potential impact on Canadian insurers. This involves ensuring that international regulations are sensitive to the domestic regulatory landscape and the particulars of the P&C insurance industry in Canada. IBC also participates in discussions led by the Global Federation of Insurance Associations, providing input into the development of the many aspects of international regulations that affect P&C insurers.