On Monday, October 4th Alberta's Superintendent of Insurance released three bulletins clarifying and updating rules on how insurance companies operate in our province. These notices replace various updates issued in 2016 and, if violated, could result in hefty fines for Insurance Companies doing business in Alberta.
Insurance companies build premiums for their customers individually based on many rating factors. Some of these include the customer's claims history, convictions and even driving style for those clients who take advantage of UBI apps such as Intact's My Driving Discount.
Alberta's Superintendent of insurance serves the public by developing and enforcing regulations for how insurance companies operate in our province. This includes determining which criteria is fair for the insurance companies to use when determining a client's rate. They have recently released three bulletins that amend or redefine some of these rating restrictions.
Use of Not At-fault and At-Fault Claims/Accidents
Not At-Fault Claims/Accidents
- Cannot be used as a rating variable for all automobile insurance coverages.
- May be used in determining eligibility for coverage for a maximum of three years.
At-Fault Claims/Accidents
- May be used as a rating variable only for third party liability coverage and the collision portion of all perils or collision coverage.
- May be used in determining eligibility for coverage for a maximum of six years.
Failure to comply with these regulations could result in a $25,000 fine for each contravention.
View the full bulletin here (PDF)
Summing Convictions or Accidents/Claims Across Operators
Convictions
- An insurer may only use convictions of an operator for whom a premium is charged.
- Insurers are prohibited from summing the personal convictions of any other operator with those of an operator for whom a premium is being charged in developing a premium.
Accidents/Claims
- An insurer may only use accidents/claims arising from the ownership or operation of an automobile attributable to an operator for whom a premium is charged.
- Insurers are prohibited from summing the accidents/claims of any other operator with those of an operator for whom a premium is being charged in developing a premium.
Failure to comply with these regulations could result in a $25,000 fine for each contravention.
View the full bulletin here (PDF)
Private Passenger Vehicle Usage Based Insurance Implementation Process
UBI (Usage Based Insurance) programs use a number of individual driving factors in to establish a score upon which a UBI discount is based. The AIRB places restrictions on these programs to protect the privacy of Albertans. The only factors presently authorized for use in establishing UBI discount scores in Alberta is as follows:
- Acceleration
- Turning
- Speed, including speed compared to posted speed limit
- Braking
- Day and time of day
- Distance driven (mileage)
- Frequency of use
- Territory
- Type of road
- Driver detection
- Distracted driving
Global positioning system (GPS) data may only be used to obtain information necessary to determine the factors listed above. There are also many privacy requirements that must be passed to operate a program like this in Alberta. Full details below:
View the full article here (PDF)
As an independent insurance broker, Armour Insurance is an advocate for our clients. It's important for us to understand all aspects of insurance, including regulations like these, so that we can continue to ensure that our clients receive the best treatment and coverage from our providers. If you have any questions about these updates you can contact your local Armour Insurance Broker.
