Private Passenger Automobile Filing Guidelines – Simplified (“Simplified Filing Guidelines”)

​A.  General Information

These Simplified Filing Guidelines may be used instead of the Private Passenger Automobile Filing Guidelines – Major, provided the proposed changes meet the following conditions:

(a) Initial Rate Change Requirements

  • On an all coverages combined basis, the proposed overall rate level change must be less than or equal to 0.0%.
  • Any existing territorial base rate or differential change must be between –15.0% and +5.0%. 
  • Any other changes to existing differentials or risk classification elements must be between -15.0% and +5.0% with no off-balancing. Each change to a differential is to be measured with reference to the current differential after re-basing the average proposed differentials to the same average current differentials for each coverage.
  • Changes to existing risk classification elements including discounts, rating variables and rating rules are permitted. A rationale must be provided for any change.
  • The introduction of a new discount is permitted, except for any usage-based (telematics) discount.  A discount being proposed must be identical to a discount already approved for another insurer and currently being used in the Ontario market.
  • No changes to the rating algorithm are permitted, except when new discounts are being proposed by the insurer.

(b) Rate Level Recovery Option Requirements

  • An insurer can recover up to 50% of the most recently approved rate level reduction under the Simplified Filing Guidelines process (not the CLEAR Simplified Guidelines process).
  • The recovery rate change can only be made to rates and risk classification elements that were previously approved by FSCO through the Simplified Filing Guidelines process.
  • The rate recovery must apply at a coverage base rate level change and not to previous reductions in the differentials.
  • A rate level recovery filing may propose a rate recovery to be effective no sooner than the one-year anniversary of the effective dates of the prior rate reduction approved by FSCO.
  • No Private Passenger Automobile Major rate filing was submitted or approved during the intervening period between the two filings.

(c) Cumulative Impact

  • The cumulative impact of all the proposed changes in the initial Simplified Filing and rate level recovery option does not result in a rate increase of more than 15% to any one consumer.
FSCO reserves the right to require that an insurer withdraw a simplified filing and instead file under the Private Passenger Automobile Filing Guidelines – Major in those cases where significant changes to risk classification system elements or differentials are being proposed (e.g., changes to age, class, years licensed).

Filing Process

Each simplified filing must contain the following informational sections in this order:
  1. Table of contents
  2. Summary of information (Appendix A) – refer to ARCTICS
  3. Certificate of the Officer/Designate (Appendix B)
  4. Rating algorithm
  5. Base rates, differentials and discounts/surcharges
  6. Rating rules
  7. Calculation of Rate Level Change
  8. Dependent Categories (if applicable)
  9. Proposed automobile insurance manual pages
  10. Rating examples – refer to ARCTICS
FSCO may request further information other than that specified above from the insurer.
Filings must be submitted by using our web-based filing system called ARCTICS.  If you require a password, please contact the “ARCTICS Main Contact” for your company who can arrange for access.

A final set of automobile insurance manual pages in electronic format (or CD) containing the approved risk classification system must be submitted within 30 days after the rate filing has been approved. The insurer should also provide a copy of the most current vehicle rate group tables if they have not already been filed with FSCO. Refer to the Filing Guidelines for Automobile Insurance Manuals for instructions. The Insurer may be subject to regulatory action by FSCO if it fails to provide the required information within this time frame.

B.  Guidelines

These Guidelines are for the Private Passenger Automobile (PPA) category only.  The format of the filing must be as follows:

Section 1: Table of Contents

The table of contents must list the page number of each section of the filing.  The pages of the filing, including exhibits, must be numbered consecutively and dated.

Section 2: Summary of Information

The summary section contains certain key information on the nature of the filed rate level, differentials or risk classification element changes (Appendix A - refer to ARCTICS).  

Section 3: Certificate of the Officer/Designate

Each filing must be accompanied by an original signed authorized Certificate of the Officer/Designate. A copy of the Officer/Designate form is attached as Appendix B [PDF Document] Size: ## kb. Authorized officers are the President, Chief Executive Officer, Chief Operating Officer, Chief Financial Officer or Chief Agent for Canada. Alternatively, the President, Chief Executive Officer, Chief Operating Officer, or Chief Financial Officer may authorize a designate to sign the Certificate of Officer/Designate. The Designate must be of Vice-President rank or above. 

Section 4: Rating Algorithm    

Each insurer is required to file its current rating algorithm and proposed rating algorithm when introducing new discounts for all coverages. The rating algorithm must include the application of all risk classification elements including discounts and surcharges.

Section 5: Base Rates, Differentials and Discounts/Surchanges

a. Base Rates

Each insurer must file current and proposed base rates for all coverages.

b. Differentials

Each insurer must file its current and proposed differentials for all coverages.

c. Discounts and Surcharges

Each insurer must file its current and proposed discounts and surcharges.

Section 6: Rating Rules

Each insurer is required to file its current and proposed rating rules. The required information must include: (i) a description of the proposed changes, (ii) the rationale for the proposed changes, (iii) the rate level effects of the proposed changes, and (iv) calculations that validate the rate level effect of the proposed changes based on the expected distribution of business.

Section 7: Calculation of Final Rate Level Change

The section must clearly describe and show how the rate level impact of changes to base rates, differentials, discounts, and rating rule changes are used to calculate the current and proposed average premium and the overall rate level change on a per coverage basis.  This calculation must reconcile with the Proposed Overall Rate Level Change from Appendix A, Questions 4a and 4b.

Section 8: Dependent Categories - Other Than Private Passenger Automobile 

For those categories of automobile insurance that are dependent on the rate filing submitted, please provide the following:
  1. The rate level effects of the proposed changes.
  2. The calculations that validate the rate level effect of the proposed changes.
  3. A copy of the rating rule that stipulates the linkage to the category of automobile insurance.
  4. Rating examples must be completed for the dependent category of automobile insurance.  Rating examples (in Excel format) can be found in the Help Screen of ARCTICS

Section 9: Proposed Automobile Insurance Manual Pages Containing Rates and Risk Classification Systems

A draft set of automobile insurance manual pages containing all proposed rating rule changes or definition changes must be provided in the filing.    Any proposed changes to the manual pages must be denoted by a side bar ( | ).
An Automobile Insurance manual filing containing the approved rates and risk classification system must be submitted within 30 days after approval in electronic format (or CD) in accordance with the Filing Guidelines for Automobile Insurance Manuals.  Failure to submit an Automobile Insurance manual filing can be treated as a compliance matter and the insurer may be subject to further regulatory action by FSCO.

Section 10: Rating Examples

Each insurer must file with FSCO the rating examples reflecting the rates it is proposing to charge. Please refer to the Help Screen in ARCTICS for the rating examples (in Excel format).    

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