Ontario’s Financial Regulator Takes Steps to Address Auto Insurance Fraud
The Financial Services Regulatory Authority of Ontario (FSRA) is moving forward with new measures to combat auto insurance fraud through enhanced reporting requirements and data collection practices. The regulator has announced that its Fraud Reporting Service (FRS) Rule and Guidance will mandate auto insurers to submit specific fraud-related data to FSRA on a regular basis.
The collected data will enable FSRA to determine the overall scale of auto insurance fraud in Ontario and identify emerging trends that may necessitate regulatory or industry intervention. The information will also be used to establish a baseline for tracking changes in fraud levels over time and measuring the effectiveness of anti-fraud initiatives. According to FSRA, better identification and response to fraud can help reduce system costs, potentially leading to more stable or lower auto insurance premiums for consumers.
The regulator emphasized that tackling fraud is a shared responsibility among insurers, service providers, and regulators. Improved transparency is expected to contribute to broader consumer protection efforts in the sector. FSRA has pledged to work closely with both the insurance industry and the Ontario government to ensure insurers are informed and adequately prepared to meet the new requirements.
The introduction of the FRS Rule builds upon FSRA’s broader efforts to enhance auto insurance oversight in Ontario. These efforts include recent consultations on rate regulation, reform of claims handling practices, and initiatives to reduce regulatory burden for insurers. “This is an important step toward more effectively tracking and identifying auto insurance fraud,” said Glen Padassery, executive vice president of policy and auto insurance at FSRA. “Fraud drives up costs for drivers. By improving how fraud is tracked and reported, we’re helping build accountability across the system to better protect consumers.”
The new rule has been approved by Ontario’s Minister of Finance and will apply to all automobile insurers in Ontario. It will come into effect once the government proclaims the related amendments to the Insurance Act into force. FSRA plans to provide guidance and support throughout the transition to ensure the Rule is implemented effectively.
