Slow and Steady Loses the Race - Canadian Underwriter editorial

David Gambrill, Editor-in-Chief, Canadian Underwriter | September 2018 Edition

Almost a year ago, citing consumer demand and what appeared to be imminent regulatory approval of electronic pink slips (e-slips), Ontario’s broker association urged its members to find a way to deliver electronic proof of insurance to their clients.

Heeding the advice, brokerages across the province worked with carriers, their own BMS vendors and the industry’s national standards body, the Centre for the Study of Insurance Operations (CSIO), to come up with an e-slips solution for consumers.

Initially, the sense of urgency appeared to be well-founded. The Canadian Council of Insurance Regulators (CCIR) came out with a bulletin in February 2018 recommending that e-slips be made available in Canada. In January, Nova Scotia became the first provincial insurance regulator to allow e-slips.

The CCIR bulletin encouraged all provincial insurance regulators to move forward with e-slips “if they have not done so already.” The industry seemed poised to deliver a service that consumers have demanded for some time.

Since then, cricket noises.

Shortly after the CCIR issued its bulletin in February, Canadian Underwriter asked Ontario’s insurance regulator for an update. FSCO confirmed it was working on the e-slips file. On the matter of a timetable, it said: “As the regulator, it is important that FSCO balance moving quickly enough to support innovation with taking the time needed to ensure consumer interests are protected.”

Fair enough.

In June, we called FSCO for another update. This time, we were told “no timetable has been set” for allowing e-slips in Ontario.

In public auto systems, it’s not straightforward which regulatory body has the authority to approve e-slips. In B.C., the public auto insurer has launched an entirely new auto rating model; e-slips is definitely not a priority.

And so, apart from Nova Scotia’s enlightened – and lightning-fast – approach, there doesn’t appear to be much of an appetite for e-slips among any of the rest of the country’s provincial regulators.

It may well be that some Canadian regulators will approve e-slips between the time I type these words and the time this issue hits the streets. More power to the regulators, if that’s the case.

As of this moment, however, seven months after the CCIR’s bulletin, electronic proof of insurance is not a reality in nine out of 10 provinces. Quite frankly, that’s unacceptable. With the exception of Nova Scotia, provincial insurance regulators have simply dropped the ball on e-slips.

There’s an unfair and incorrect public perception that the insurance industry is slow to innovate. Insurance companies and brokerages have in fact been ready with e-slips solutions – their own proprietary solutions, BMS tech vendor solutions, or CSIO’s industry solution – since at least January, if not before.

Insurance providers can act only as quickly as regulations allow; without regulation, they can’t act. Meanwhile, the regulators have taken so long on this file, the consumers they are supposed to be protecting have simply gone ahead and started to use e-slips on their mobile devices anyway. Word on the street is that some police officers are accepting mobile-friendly e-slips regardless of whether or not there is a regulatory regime in place.

The reasons for the delay are unclear. We’re not talking rocket science here, we know this can be done quickly. When ride-sharing companies like Uber and Lyft came to Ontario, the regulator quickly approved electronic pink slips for their insured drivers in 2016. In doing so, FSCO noted the 2016 Ontario Budget called for the regulator to consider “flexible responses, including the possibility of interim regulatory approvals,” to approve ride-sharing insurance policies “as quickly as possible.” Et voila, electronic pink slips for ridesharing drivers.

Perhaps it’s time for provincial politicians to give their local insurance regulators a similar nudge.