Regulatory Spotlight On Usage-Based Automobile Insurance In Ontario And Quebec

By Michael Garellek and Joey Suri (Articling Student)

Gowling Lafleur Henderson LLP

Many Canadian automobile drivers have now enrolled in usage-based insurance (“UBI“) programs to benefit from a discount on their insurance premiums. Using telematics, UBI programs record several factors such as acceleration, hard braking, mileage driven, time of day travelled and sharp turns to analyze driving behaviour and reward safe driving. New technology now allows smartphone applications to track such driving habits.

Currently, only certain insurers in the provinces of Ontario and Quebec offer such UBI programs. Similar programs are expected to launch in the provinces of Alberta and Nova Scotia in the upcoming year.

This technology can be particularly useful for certain groups of consumers, such as younger drivers, allowing insurers to set a premium based on their actual driving habits rather than statistics drawn from other drivers of a similar demographic.. The Financial Services Commission of Ontario (“FSCO“) has stated that these programs also incite safe driving practices and could result in fewer accidents on the road.

However, concerns have been raised regarding the use of this technology, particularly regarding privacy and the use of the collected data.

Personal information

In a bulletin published concerning UBI’s in October 2013, FSCO stated that the data collected through UBI technologies should be treated as “personal information” as defined in the Personal Information Protection and Electronic Documents Act, and that insurers must comply with all applicable legislation. This legislation includes requirements that organizations obtain an individual’s consent to collect, use or disclose his personal information, and use appropriate safeguards to protect any personal information held by organizations.

FSCO expects insurers to disclose the impact of the operation of the vehicle by a person other than the policyholder. Furthermore, in Ontario, pricing programs related to UBI must be filed and approved by FSCO’s Superintendant and where the enrollment discount is only offered for one term, or where the impact of the actual pricing program discount is expected to differ materially from the enrollment discount, the insurer will be required to submit annual reports to the Superintendent.

Following in the footsteps of FSCO, the Autorité des marches financiers (“AMF“), which regulates the automobile insurance industry in Quebec, published on April 9, 2015, a Notice regarding the offering of usage-based automobile insurance products (“Notice“), outlining its expectations for UBI programs. Similarly, it stated that the collected data must be treated as “personal information” and that insurers must comply with the provisions of An Act respecting the protection of personal information in the private sector.

Regulatory oversight

The AMF is of the opinion that the existing supervisory framework, in particular the Sound Commercial Practices Guideline and the Outsourcing Risk Management Guideline, apply to UBI programs.

The AMF, like FSCO, states that participation by consumers in UBI programs should be done on a voluntary basis only, and expects them to be properly informed about the program and the changes made to it during the term of the insurance contract. For instance, it expects consumers to be informed of:

  • program eligibility criteria;
  • type of data collected;
  • use of data (e.g., as part of an investigation for the settlement of a claim, where applicable);
  • impact of data on automobile insurance premiums;
  • period used for insurance premium reviews.

Regulators expect insurers to make the consumer’s UBI data accessible to them. In our view, the advent of smartphone UBI apps will make it easier to comply with this requirement. They also expect insurers to cease receiving data once the consumer opts out of a UBI program, and that data should not be used to decline, terminate or refuse to renew an insurance policy.

It is interesting to note that earlier this year, the Société d’assurance automobile du Québec (the “SAAQ“), Quebec’s public automobile insurance plan, announced a voluntary UBI program to be introduced in 2016. The SAAQ and the Quebec Transport Ministry have also indicated that the tracking device may become mandatory for convicted dangerous drivers.

We can assist insurers with any regulatory issues related to UBI and in ensuring their programs are compliant with the applicable privacy laws.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Source: Mondaq

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NICB’s 2014 Top 10 Metro Areas for Vehicle Theft

NICB’s 2014 Top 10 Metro Areas for Vehicle Theft

DES PLAINES, Ill., June 24, 2015 /PRNewswire-USNewswire/ — California’s San Francisco-Oakland-Hayward Metropolitan Statistical Area (MSA) had the nation’s highest per capita vehicle theft rate in 2014, according to the National Insurance Crime Bureau’s (NICB) latest Hot Spots report.

Although vehicle thefts are down dramatically around the nation, the reasons they are stolen remain the same. Older vehicles are stolen primarily for their parts value while newer, high-end vehicles often are shipped overseas or, after some disguising, sold to an innocent buyer locally.

California’s San Francisco-Oakland-Hayward Metropolitan Statistical Area (MSA) had the nation’s highest per capita vehicle theft rate in 2014, according to the National Insurance Crime Bureau’s (NICB) latest Hot Spots report.

For 2014, the 10 MSAs with the highest vehicle theft rates were: (thefts in parentheses)

2014 Ranking 2013 Ranking
1. San Francisco/Oakland/Hayward, Calif. (29,093) 4. (29,326)
2. Bakersfield, Calif. (5,211) 1. (6,267)
3. Stockton-Lodi, Calif. (4,245) 5. (4,245)
4. Odessa, Texas (886) 12. (764)
5. Modesto, Calif. (3,047) 3. (3,565)
6. Spokane-Spokane Valley, Wash. (3,032) 7. (3,205)
7. Vallejo-Fairfield, Calif. (2,414) 8. (2,540)
8. Seattle-Tacoma-Bellevue, Wash. (20,268) 13. (18,128)
9. Fresno, Calif. (5,260) 2. (6,750)
10. San Jose-Sunnyvale-Santa Clara, Calif. (10,531) 9. (10,925)

NICB’s Hot Spots report examines vehicle theft data obtained from the National Crime Information Center for each of the nation’s MSAs, which often include areas much larger than the cities for which they are named. For example, the Bakersfield, Calif., MSA includes all thefts within the entire county of Kern, not just the city of Bakersfield.

Moreover, NICB notes, as a population-based survey, an area with a much smaller population and a moderate number of thefts can—and often does—have a higher theft rate than an area with a much more significant vehicle theft problem and a larger population to absorb it.

The full Hot Spots report is available at www.nicb.org.

NICB recommends that drivers follow our four “layers of protection” to guard against vehicle theft:

Keep kids safe on our roads this summer, ICBC urges drivers and parents

Source: ICBC

Hot weather came early to B.C. this year but that means even more children will be playing outside now that school’s getting out for summer break. Road safety is not always top of mind for kids so it’s important to go over the rules of the road if you’re a parent and pay extra attention when you’re behind the wheel, especially around playgrounds and residential areas.

Child-cyclist-safetyOn average, 153 child pedestrians (aged five to 15) are injured in crashes each year in B.C.*

Top tips for drivers:

  • Slow down: With more children playing outside in the summer, be cautious and watch your speed, especially near playgrounds, parks and in residential areas. Playground speed limits remain in effect year-round.

  • Watch for clues: In residential areas, a hockey net or ball can mean that kids are playing nearby. Remember that a child could dash into the street at any moment. Pay attention and always anticipate the unexpected.

  • Watch for cyclists: Actively watch for cyclists on the road who might be harder to see. Make eye contact with them whenever possible to let them know you have seen them. Shoulder check for cyclists before turning right and watch for oncoming cyclists before turning left.

Top tips for parents:

  • Focus on the basics: Go over these important road safety tips with your children – even older children need to be reminded about road safety.

  • Set a good example: Never jaywalk or run across the street. Where possible, cross at intersections with a pedestrian crossing light or marked crossing.

  • Parked vehicles: Encourage your children to avoid shortcuts through parking lots or around parked cars where it’s harder for drivers to see small children.

  • Safe driving with children: Relatives, friends’ parents, and other caregivers often transport children in the summer. The law requires children be secured in car seats or booster seats until they are four feet nine inches tall or at least nine years old. Make sure your children’s seats or boosters goes with them if they might travel without you by car.

  • Cycling 101: Cyclist injuries from crashes with vehicles peak in July and August. It’s never too early to teach your children safe cycling behaviour – it could help make it second-nature to them when they’re older. Start by covering these basics:

    • Cycle in a straight line, avoid weaving and try to be as predictable as possible.

    • When sharing a path with pedestrians, ride on the right hand side for everyone’s safety. Use a bell or horn to alert others when you plan to pass.

    • When turning, shoulder check well in advance, hand signal and then with both hands on the handle bars, shoulder check again before turning.

    • Make sure children wear approved helmets that meet safety standards every time they ride their bikes and periodically inspect them for signs of wear.

Regional statistics*:

  • On average, 108 child pedestrians (aged five to 15) are injured in crashes each year in the Lower Mainland.

  • On average, 19 child pedestrians (aged five to 15) are injured in crashes each year on Vancouver Island.

  • On average, 17 child pedestrians (aged five to 15) are injured in crashes each year in the Southern Interior.

  • On average, seven child pedestrians (aged five to 15) are injured in crashes each year in the North Central region.

*Notes: ICBC crash and injury data used (2009 to 2013).

US safety agency investigates Jeep Wranglers; wiring problem may stop air bags from inflating

U.S. safety regulators are investigating complaints that a wiring problem in Jeep Wrangler steering wheels could stop the air bags from inflating in a crash.

The probe covers about 630,000 Wranglers from the 2007 through 2012 model years.

The National Highway Traffic Safety Administration says it has 221 complaints that the air bag warning light is illuminating, indicating an electrical problem in the steering wheel. Jeep maker Fiat Chrysler recalled some right-hand-drive Wranglers in 2011 for the same problem. Now the agency is looking at left-hand-drive vehicles.

The agency reports no crashes or injuries because of the problem. The investigation could lead to another recall.

Fiat Chrysler says it is co-operating in the investigation. Owners whose air bag lights come on should contact their dealer.

canada-press

 

Toll from faulty General Motors ignition switches now stands at 117 deaths and 237 injuries

The death toll from faulty ignition switches in General Motors’ small cars has risen by three to 117.

Victims’ families are being offered compensation of at least $1 million each by attorney Kenneth Feinberg, who was hired by GM last year. In addition, Feinberg will make offers to 237 people who were injured in crashes caused by the switches in the Chevrolet Cobalt and other older cars.

GM recalled 2.6 million of the cars last year, but acknowledged it knew about the switch problems for more than a decade.

Feinberg’s compensation fund received 4,342 claims by the Jan. 31 deadline. Seventy-nine claims remain under review. About 90 per cent were deemed deficient or ineligible.

GM paid $200 million to settle claims filed with Feinberg as of March 31.

 

“Canadians need to be much more aware that driving takes your full attention.”

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