Top consumer complaints about Ontario’s P&C industry

Claims and settlement issues are the top public complaints in the regulated P&C and auto insurance sectors in Ontario, according to Financial Services Regulatory Authority of Ontario’s (FSRA) complaints report for the 2021-22 fiscal year.

“The most common examples of claims and settlement complaints FSRA receives are from consumers asking FSRA to get a favourable settlement of their insurance claim if they are not satisfied with the outcome from their insurers,” a FSRA spokesman told Canadian Underwriter when asked for examples of complaints received for the P&C and auto sectors.

In these cases, FSRA refers consumers to seek resolution through third-party dispute resolution bodies, such as the General Insurance OmbudService (GIO) or the OmbudService for Life and Health Insurance, or seek remediation through civil court, said Russ Courtney, FSRA’s senior media relations and digital officer. “FSRA investigates allegations of regulatory breaches and takes appropriate action based on the specific circumstances of the complaint.”

The regulator’s Complaints Report 2021-2022 is the first annual report on complaints statistics. “This report will serve as the benchmark going forward,” Courtney said.

During the 2021-22 fiscal year, FSRA resolved a total of 857 consumer and industry complaints across all the sectors it regulates: mortgage brokering, auto insurance, P&C insurance, life and health insurance, credit unions and caisse populaires, health service providers, and loan and trust companies. The regulator escalated 62 complaints for enforcement.

iStock.com/Mohamad Faizal Bin Ramli

The GIO reported recently that it received 4,370 contacts from insurance consumers across the country in 2022, with 174 of them escalated to case status. But that’s the lowest total of consumer contacts since 2018, when the total was 3,972.

For FSRA, the breakdown of the percentage of complaints in the P&C sector were as follows:

Claims and settlement – 42%
Contractual matter – 18%
Customer service – 18%
Premium calculation/increase/rebate – 14%
Other (adequacy of product, policy provisions, etc.) – 6%
Unlicensed activity – 2%

In two-thirds (66%) of complaint cases, FSRA found it had no jurisdiction. It made “no findings” in 19% of cases. In 6% of cases, the consumer issue was resolved, in 5% the consumer was referred to another entity, and in 4% in cases it was referred to the GIO.

FSRA noted an increase in commercial insurance and condo/tenant insurance complaints. “They were mostly related to the availability of insurance, premium increase, or non-renewals of policies,” the report said. “FSRA is working with the Ministry of Finance to understand industry practices and will engage with the insurance companies as necessary.”

Courtney noted insurers are responsible for setting underwriting rules and premium rates related to their commercial and condo/tenant insurance policies. “FSRA does not regulate the specific terms and conditions or premium costs for these products. We continue to monitor the marketplace in order to assess any challenges relating to affordability and access to coverage, and to ensure Ontario customers are being treated fairly.”

In the auto insurance sector, the percentage of complaints were:

Claims and settlement – 42%
Customer service – 18%
Other (Administration, policy provisions, unlicensed activity, etc.) – 15%
Contractual matter – 14%
Premium calculation/increase/rebate – 7%
Policies and procedures – 4%

In 43% of auto complaints, FSRA had no jurisdiction. Thirty-six per cent resulted in no findings, 8% were referred to entity, in 7% of cases the consumer issue was resolved, and a letter of warning was served in 6% of cases.

“Consumers should first try to address issues with the regulated person or business before filing a complaint with FSRA,” the regulator said. “A regulated person or business is required to have robust and transparent processes to receive, evaluate and address complaints from consumers. They are also required to make meaningful and appropriate attempts to resolve complaints and document actions taken in the process.”

Overall, the information provided in all the complaints FSRA receives allows the regulator to identify trends which can impact its supervisory initiatives, inform its guidance or rulemaking, and are considered when making legislative changes and releasing public awareness campaigns.

Feature image by iStock.com/fizkes