Ottawa, Ontario — On November 22, the Ontario Ministry of Finance announced that it is proceeding with the plan—first announced in Ontario’s 2024 Budget—to give the Financial Services Regulatory Authority (FSRA) the power to initiate a pilot project permitting the sale of automobile insurance products by auto dealers, manufacturers and finance companies at motor vehicle dealerships.
In order to make this adjustment, the plan would specifically involve amending the Ontario Regulations 704/21 act to allow FSRA to exempt such sales from the application of section 231 of the Insurance Act (Ontario), which currently prohibits them.
While some provinces in Western Canada, as well as New Brunswick, already have restricted licensing policies to allow automobile manufacturers and dealers to sell certain insurance products, such as extended/equipment warranty and GAP insurance, these policies do not allow manufacturers and dealers to sell automobile insurance.
As a result, the proposed initiative would make Ontario the first province to potentially allow the sale of automobile insurance by otherwise ‘exempted persons.’
As further noted by the proposal, the initiative aims to improve customer experience and affordability; increase consumer choice by introducing novel distribution channels; encourage the development of innovative, consumer-focused products in response to changing needs; and finally, promote competition in Ontario’s insurance sector.
A consultation on the proposal will continue until January 6, 2025.
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