NLR 80/04 - Automobile Insurance Prohibited Underwriting Regulations under the Insurance Companies Act

NEWFOUNDLAND AND LABRADOR REGULATION 80/04 Automobile Insurance Prohibited Underwriting Regulations under the Insurance Companies Act (O.C. 2004-297) Amended by: 52/05 66/05 59/19 NEWFOUNDLAND AND LABRADOR REGULATION 80/04 Automobile Insurance Prohibited Underwriting Regulations under the Insurance Companies Act (O.C. 2004-297) (Filed July 28, 2004 ) Under the authority of paragraph 107(e.1) of the Insurance Companies Act , the Lieutenant-Governor in Council makes the following regulations. Dated at St. John's , July 28, 2004 . Robert C. Thompson Clerk of the Executive Council REGULATIONS Analysis 1. Short title 2. Definitions 3. Prohibition: Refusal to provide insurance 4. Prohibition - risk classification system 5. Commencement Short title 1. These regulations may be cited as Automobile Insurance Prohibited Underwriting Regulations . 80/04 s1 Back to Top Definitions 2. In these regulations (a) "Act" means the Insurance Companies Act ; and (b) "minister" means the minister appointed under the Executive Council Act to administer the Act. 80/04 s2 Back to Top Prohibition: Refusal to provide insurance 3. (1) For the purpose of subsection 96.1(2) of the Act, an insurer shall not decline to issue, terminate or refuse to renew a contract or refuse to provide or continue a coverage or endorsement on one or more of the following grounds: (a) the insured, the applicant or another person who is or would be an insured under the contract (i) had an accident in the past, or claimed in the past under a contract as a result of an accident, for which the insured, applicant or other person was not at fault, (ii) has enquired as to coverage under a contract or has advised of an accident for which indemnity or coverage is provided for under a contract, and no payment was made to indemnify an insured or to an insured under the contract, (iii) failed to make a payment to an insurer or a payment was returned to the insurer dishonored, other than the first payment due on a contract, if the missed payment or dishonored payment was replaced within 30 days of the date on which it was originally due, (iv) has been declined insurance or refused a renewal of insurance by an insurer, (v) has a lapse in coverage for a period of less than 24 months, unless the lapse resulted directly or indirectly from (A) termination of a contract for failure to pay premiums due under a contract, (B) termination of a contract for failing to disclose a conviction or claim and the conviction or claim would likely have led to a higher premium being charged, or (C) suspension of the person's drivers licence for an offence related to the use or operation of an automobile, (vi) does not have another insurance policy of any kind with the insurer or its affiliates or that he or she refused to consider or purchase another insurance policy from the insurer or its affiliates, or (vii) is or has been insured through the Facility Association; (b) the age of the vehicle, except that an inspection satisfactory to the insurer may be required once the vehicle is 8 years old, provided that the inspection requirements are set out in writing by the insurer and given to the applicant for a contract; and (c) another ground approved by the minister. (2) For the purpose of this section, section 7 of the Corporations Act applies, with the necessary changes, to the determination of whether there is an affiliation between 2 or more insurers. (3) Where an insured, the applicant or another person who is or would be an insured under the contract had an accident in the past for which he or she was at fault and who, within one year of being notified of the accident by his or her insurer, made a voluntary payment to the insurer of the person who is not at fault, the accident is considered to be an accident for which the insured, applicant or other person was not at fault for the purposes of subparagraph (1)(a)(i). 80/04 s3 ; 59/19 s1 Back to Top Prohibition - risk classification system 4. (1) For the purpose of paragraph 96.2(3)(d), an insurer shall not use one or more of the following elements in its risk classification system: (a) an accident or a claim resulting from an accident for which the insured was not at fault; (b) an inquiry by an insured as to coverage under a contract, or any advice of an accident by an insured for which indemnity or coverage is provided for under a contract, where no payment was made to indemnify an insured or to an insured under a contract; (c) failure by the insured to make a payment to an insurer, or a payment being returned to an insurer dishonored, other than the first payment due on a contract, if the missed payment or dishonored payment was replaced within 30 days of the date on which it was originally due; (d) the insured was declined insurance or refused a renewal of insurance by an insurer; (e) the insured has a lapse in coverage under a contract for a period of less than 24 months, unless the lapse resulted directly or indirectly from (i) termination of a contract for failure to pay premiums due under a contract, (ii) termination of a contract for failing to disclose a conviction or claim and the conviction or claim would likely have led to a higher premium being charged, or (iii) suspension of the person's drivers licence for an offence related to the use or operation of an automobile; (e.1) the age, sex or marital status of a person; and (f) another element approved by the minister. (2) Notwithstanding paragraph (1)(e.1), an insurer is not prohibited from (a) providing a discount based on the age of the operator of the vehicle where the operator is at least 55 years of age; or (b) using driving experience as an element in its risk classification system. (2.1) Notwithstanding paragraph (1)(e.1), where, after August 1, 2005 a rate charged by an insurer to a person insured under a contract would, as a result of the coming into force of paragraph (1)(e.1), be higher than the rate the person would otherwise have been required to pay, the insurer is not prohibited from charging the person the lower rate. (2.2) Where an insurer receives an approval under section 51 of the Automobile Insurance Act to increase a rate it charges to an insured referred to in subsection (2.1), the insurer may phase in the amount of the increase over the period the insurer may determine. (3) Notwithstanding paragraph (1)(e.1), for contracts issued or renewed after August 1, 2005, an insurer may continue to use an approved rate that is based on age, sex or marital status until the insurer has filed a rate with the board as required under section 62.1 of the Act and the rate is permitted to be used, or approved for use, by the board. (4) Where, in a contract issued or renewed after August 1, 2005 , an insurer continues to use a rate based on age, sex or marital status as permitted under subsection (3) and the rate is higher than (a) the rate filed with the board under section 62.1 of the Act; and (b) permitted to be used, or approved for use, by the board, the difference shall be refunded to the insured, or credited to the insured on the premium remaining to be paid under the contract, within 60 days of the date the rate is permitted to be used, or is approved for use, by the board. (5) For 12 months from the date this subsection comes into force an insurer shall not increase a rate for a female operator under the age of 25 who is not the principal operator of the vehicle. (6) For 12 months from the date this subsection comes into force an insurer shall not increase a rate for an operator of a vehicle due to the prohibition in subsection (5). (7) In subsection (5), "principal operator" means the person who operates the vehicle for most of the time. 80/04 s4 ; 52/05 s1 ; 66/05 s1 Back to Top Commencement 5. These regulations shall come into force on August 1, 2004 . 80/04 s5