The Canadian Life and Health Insurance Association (CLHIA) is lauding the Financial Services Commission of Ontario’s (FSCO) plan to create a national database of disciplinary decisions for the insurance industry, but worries about the possible side effects of its plans to combat auto insurance fraud.
In a comment letter on FSCO’s annual statement of priorities for the coming year, the CLHIA says that it looks forward to working with FSCO on a number of regulatory issues, including its plans to modernize disciplinary hearings for insurance agents and adjusters, life insurance and mortgage broker product suitability reviews, and a national, harmonized life agent licence qualification standard.
It also endorses plans for a national disciplinary actions database, calling for “speedy progress” on that initiative, in particular. “It will encourage greater transparency and will assist regulators, insurers and [managing general agents] alike in their due diligence,” it says.
Additionally, the CLHIA says that it’s concerned that efforts to address auto insurance fraud could inadvertently shift the problem to the life and health insurance sector. “Claims-related fraud is a growing problem for life and health insurers as well and some of FSCO’s work could have a direct and unintended impact on our industry,” it says.
“We are concerned that if the recommendations in the task force report are implemented as indicated, there exists a significant risk that auto-related claims fraud will be shifted onto the life and health insurance market,” it says. “As a critical stakeholder, we strongly suggest that all proposed licensing and supervisory changes be applied equally to all clinics in Ontario that treat auto-related accident victims regardless of whether they are seeking reimbursement from an employer plan or an auto insurer.”