Basic Information

Reference Number

0000277387

Issuing Organization

Financial Services Regulatory Authority of Ontario (FSRA)

Owner Organization

Financial Services Regulatory Authority of Ontario

Solicitation Type

RFP - Request for Proposal (Formal)

Solicitation Number

FSRA2024-040

Title

Auto Insurance Rating and Underwriting Supervision – Fairness Assessment

Source ID

PP.CO.ON.1010658.C105462

Details

Location

Canada, Ontario

Description

FSRA is in the process of executing its auto insurance rating and underwriting regulation reform strategy. A key component of this strategy is to build a supervisory model with accreditation status granted for insurers who can demonstrate the achievement of desired fairness outcome for consumers (“Accreditation Assessment”).
The supervisory guidance will be published for consultation in Fall 2024, with the supervisory model becoming effective in Fall 2025. AIP is currently in the stage of developing tools and processes, for future accreditation assessment and requires external consulting support to achieve this.
Develop Supervisory Manual

FSRA plans to engage a consultant to develop a risk-based approach to assess whether insurers achieve Fair Consumer Outcomes (see assessment scope below) in their auto insurance rating and underwriting.

The deliverables will include creating tools and processes to evaluate if insurers meet Fair Consumer Outcomes during the accreditation assessment and ensuring their continuous achievement of Fair Consumer Outcomes in FSRA’s proactive supervision.
FSRA’s assessment scope for Fair Consumer Outcomes includes (listed in no particular order and requires a holistic consideration):

Accurate Pricing and Underwriting
Absence of Unfair Discrimination
Absence of Unfair Bias
Absence of Proxies
Accessible Products and Coverages
Cost Mitigation
Balanced profitability and consumer interests
Transparency

Develop content of a supervisory manual for FSRA’s oversight of auto insurance rating and underwriting, encompassing the following scope:

Developing tools and processes to evaluate if insurers meet Fair Consumer Outcomes during FSRA’s Accreditation Assessment.

Create tools and processes, including criteria and matrices, identify thresholds and benchmarks, and develop checklists, scoring systems, and assessment tools for FSRA to assess and evaluate insurers’ tests, methodologies, documentation, and evidence submitted in their accreditation applications to FSRA. These tools and processes should enable FSRA to evaluate the robustness and adequacy of insurers’ policies and procedures, as well as their effective implementation in Ontario auto rating and underwriting. They should also allow FSRA to assess various fairness tests, models, and statistical measures to determine if Fair Consumer Outcomes have been achieved.
Provide practical scenarios and examples of what constitutes robust and adequate policies, procedures, and practices that insurers employ to meet Fair Consumer Outcomes, which will form the basis for FSRA’s accreditation decisions.
Explore and provide FSRA with all appropriate and relevant mathematical, statistical, and technical models, tests, exams, tools, and methods that insurers might use to demonstrate their achievement of Fair Consumer Outcomes. For each of these models, tests, exams, tools, and methods, provide brief descriptions, intended outcomes, suggested thresholds/benchmarks, and guidance on how FSRA should evaluate if the desired fairness outcomes are achieved. There will be regular touchpoints meetings with FSRA’s stakeholders on progress and updates.

Developing tools and processes to evaluate insurers’ ongoing achievement of Fair Consumer Outcomes in FSRA’s proactive supervision.

Create tools and processes, including criteria and matrices, identify thresholds and benchmarks, and develop checklists, scoring systems, and assessment tools for FSRA to continuously assess and reassess insurers' ongoing data and information submissions as part of FSRA’s proactive supervision to ensure that Fair Consumer Outcomes are consistently met.
Define the necessary data and information collection (in addition to the data FSRA already has access to), develop models based on that data, and establish assessment methods and criteria for maintaining or modifying accreditation status. Utilize internal, existing, and potential additional data sources to identify emerging issues in the auto insurance market and pinpoint high-risk insurers requiring additional regulatory attention due to a high risk of causing consumer harm. The design of this proactive supervision should reflect proportionality principles, considering the size and complexity of the insurer’s profile, and the need for additional data and information.
Develop relevant key performance indicators and early warning signals to assess Fair Consumer Outcomes (either proactively or at the time of rate/underwriting filing). Create an appropriate approach to balance any conflicting Fair Consumer Outcomes and determine a recommendation/conclusion of fairness assessment.
There will be regular touchpoints meetings with FSRA’s stakeholders on progress and updates.

Work with FSRA’s internal and external expert consultants to integrate the content from sections (a) and (b) above into FSRA’s overall supervisory manual for auto insurance rating and underwriting supervision. There will be regular touchpoints meetings with FSRA’s stakeholders on progress and updates.
Work with FSRA and other consultants to support assessment pilot tests which are designed to test the designed overall supervisory approach and scoring models, including assessments of OGC (Operations, Governance and Controls), and MRM (Model Risk Management), Fairness, and the overall accreditation assessments. FSRA is responsible for coordinating with regulated entities to pilot test 2-3 insurers' OGC, MRM, and Fairness. FSRA will be involved and observe during this pilot. The intended outcomes are, by the end of the pilot, that FSRA will have a better understanding of insurers' progress and that insurers will understand where they are advanced and where they are lagging.

Dates

Publication

2024/08/29 02:30:26 PM EDT

Bid Intent

Not Available

Question Acceptance Deadline

2024/09/12 03:00:00 PM EDT

Questions are submitted online

Yes

Closing Date

2024/09/27 05:00:00 PM EDT

Contact Information

Mara Caravaggio

416-226-7827

procurement@fsrao.ca

Bid Submission Process

Bid Submission Type

Electronic Bid Submission

Envelope 1 - Identity & Proposal

Pricing

No pricing in this envelope

Bid Documents List

Item Name	Description	Mandatory	Limited to 1 file
Bid Documents	Documents defining the proposal	No	No
No entries

Additional Bidding Instructions

Please have seperate envelopes one for Rated Crited Responses and one for Bid price.

Envelope 2 - Pricing

Pricing

Lump sum

Bid Documents List

Item Name	Description	Mandatory	Limited to 1 file
Bid Documents	Documents defining the proposal	No	No
No entries

Additional Bidding Instructions

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