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AR 117/2014 AUTOMOBILE INSURANCE PREMIUMS REGULATION

(Consolidated up to 275/2020)

ALBERTA REGULATION 117/2014

Insurance Act

AUTOMOBILE INSURANCE PREMIUMS REGULATION

Table of Contents

                1       Definitions

Approval of Rating Programs for Basic
and Additional Coverage

                2       Required approvals

                4       New insurers

                5       Approval of changes to ratings programs

                6       Further filings

                7       Approval of rating programs

Maximum Premiums for Basic Coverage
for Private Passenger Vehicles

                8       Maximum premium for basic coverage
for a private passenger vehicle

                9       Annual review


Other Matters

              10       Board policies and procedures

              11       Information required

              12       Use of prescribed forms

Amendments, Review and
Coming into Force

              14       Repeal

              16       Coming into force

Definitions

1   In this Regulation,

                                 (a)    “Act” means the Insurance Act;

                                 (b)    “additional coverage” has the same meaning as it has in section 598(a) of the Act;

                                 (c)    “adjust” and “adjustment” mean increase or decrease;

                                 (d)    “application for basic coverage” includes an application for renewal of basic coverage;

                             (d.1)    “at-fault claim” means, in respect of liability described in section 571 of the Act or under the same or equivalent coverage in any other jurisdiction, inside or outside Canada,

                                           (i)    a claim paid in respect of that liability for which the driver is wholly or partially at fault, and

                                          (ii)    a claim made in respect of which the insurer has reasonably determined that a payment will or is likely to be made as a result of the fault, whole or partial, of the driver;

                                 (e)    repealed AR 275/2020 s2;

                                 (f)    “basic coverage” means insurance provided for under sections 571 and 573 of the Act;

                                 (g)    “Board” means the Automobile Insurance Rate Board established under section 599 of the Act;

                                 (h)    “consumer representative” means the person appointed to the Board by the Minister under section 599 of the Act;

                             (h.1)    “curb weight” means the total weight of a vehicle without passengers or cargo;

                                  (i)    “grid” means the grid established by the Board;

                                  (j)    repealed AR 275/2020 s2;

                                 (k)    “insurer” means an insurer that provides basic coverage or additional coverage, or both;

                                  (l)    “policyholder” means the person who holds a policy for basic coverage or additional coverage, or both;

                               (m)    “private passenger vehicle” means a motor vehicle with a curb weight of 4500 kg or less that is used for

                                           (i)    pleasure,

                                          (ii)    driving to or from work or school, or

                                         (iii)    business purposes, including farming operations,

                                          but does not include

                                         (iv)    a motorcycle, power bicycle or moped,

                                          (v)    a vehicle used for commercial purposes, including, but not limited to,

                                                  (A)    a vehicle used for transporting individuals for compensation, delivery of goods, courier or messenger service, parcel delivery, meal delivery or driver training,

                                                  (B)    a vehicle rated under a fleet formula,

                                                  (C)    a short‑term lease or rental vehicle,

                                                  (D)    a funeral vehicle, or

                                                  (E)    a vehicle held for sale or used for demonstration or testing,

                                         (vi)    an emergency vehicle as defined in section 1(1)(m) of the Traffic Safety Act,

                                        (vii)    a recreational vehicle,

                                       (viii)    an antique motor vehicle registered under the Traffic Safety Act as an antique motor vehicle, or

                                         (ix)    an all terrain vehicle, a snow vehicle, a miniature motor vehicle or any other similar off‑highway vehicle;

                                 (n)    “rating program” means the rules, criteria, policies or guidelines of any nature, including rating variables, used or adopted by an insurer to determine the premiums for basic coverage or additional coverage, as applicable, to be charged to or collected from a policyholder;

                                 (o)    “rating variable” means a factor used to measure risk under a rating program.

AR 117/2014 s1;74/2018;275/2020

Approval of Rating Programs for Basic
 and Additional Coverage

Required approvals

2(1)  No insurer may charge or collect a premium for basic coverage or additional coverage unless the insurer’s rating program with respect to that coverage has been approved in accordance with this Regulation.

(2)  The Board may require or prohibit the use of any rating variable in an insurer’s rating program.

AR 117/2014 s2;275/2020

3   Repealed AR 275/2020 s4.

New insurers

4(1)  An insurer that, under the Act,

                                 (a)    becomes, on or after the coming into force of this Regulation, licensed in Alberta to undertake the class of automobile insurance and intends to offer basic coverage or additional coverage, or both, or

                                 (b)    is licensed in Alberta to undertake the class of automobile insurance and is only offering basic coverage or additional coverage but, on or after the coming into force of this Regulation, intends to begin offering both basic coverage and additional coverage

must, in accordance with the Board’s policies and procedures, file with the Board its rating program for basic coverage or additional coverage, or both, as the case may be.

(2)  A rating program filed in accordance with subsection (1) has no effect until it is approved by the Board under section 7.

Approval of changes to ratings programs

5(1)  An insurer must, subject to the Board’s policies and procedures, file with the Board any proposed changes to its rating program.

(2)  Proposed changes to a rating program required to be filed under subsection (1) have no effect until they are approved by the Board under section 7.

Further filings

6   In addition to a requirement to file a rating program under section 3, 4 or 5, an insurer must, in accordance with the Board’s policies and procedures, file with the Board the insurer’s current rating program.

Approval of rating programs

7(1)  Where an insurer files a rating program or changes to a rating program under this Regulation, the Board may, with respect to the filing, approve, reject or require changes to the rating program or to the proposed changes.

(2)  If the Board rejects or requires changes to a rating program, the Board must promptly serve on the insurer a written notice of the Board’s decision, and give reasons for the decision.

Maximum Premiums for Basic Coverage
for Private Passenger Vehicles

Maximum premium for basic coverage for a
private passenger vehicle

8(1)  With respect to basic coverage for a private passenger vehicle, no insurer may charge or collect a premium of more than the lesser of

                                 (a)    the premium determined in accordance with a rating program approved under this Regulation, and

                                 (b)    the grid premium computed by the Board.

(1.1)  Notwithstanding subsection (1), an insurer may charge or collect an insurance premium determined in accordance with a usage‑based insurance rating program or a pay-per-kilometre rating program approved under this Regulation that exceeds the grid premium if the insured has provided the insured’s informed consent to participate in the usage-based insurance rating program or pay‑per‑kilometre rating program, as the case may be.

(2)  Notwithstanding that the amount referred to under subsection (1)(a) with respect to basic coverage for a private passenger vehicle is lower than the grid premium computed by the Board, an insurer may charge the grid premium if any one or more of the following apply in respect of the relevant driver of the vehicle:

                                 (a)    the relevant driver had 3 or more at‑fault claims during the preceding 6 years;

                                 (b)    the relevant driver had a combination of 5 or more serious or traffic safety convictions in the preceding 3 years;

                                 (c)    the relevant driver had one or more criminal code convictions in the preceding 3 years;

                                 (d)    the relevant driver had 2 or more serious traffic safety convictions in the preceding 3 years;

                                 (e)    the relevant driver was convicted of one or more offences for fraud relating to automobile insurance in the previous 10 years.

(3)  Repealed AR 275/2020 s5.

AR 117/2014 s8;275/2020

Annual review

9(1)  The Board must, in accordance with its policies and procedures, conduct an annual review of automobile insurance trends and premiums relating to basic coverage and additional coverage for private passenger vehicles.

(2)  The review must consider, on an industry-wide basis,

                                 (a)    loss costs, as that term is understood by the Board;

                                 (b)    administrative expenses, including commissions, taxes and general expenses;

                                 (c)    profitability;

                                 (d)    repealed AR 275/2020 s6;

                                 (e)    any other matters that the Board considers appropriate.

(3)  The Board must publish a preliminary report of its findings of the review.

(4)  Following publication of its preliminary report, the Board must invite comment from insurers, the consumer representative and the public and must give at least 30 days for any comments to be provided.

(5)  The Board must publish a final report of its findings by September 30 of each year.

(6)  The final report must include

                                 (a)    the Board’s findings on the matters referred to in subsection (2),

                                 (b)    a report of the consumer representative,

                                 (c)    the Board’s responses to comments received from the automobile insurance industry, the consumer representative and the public,

                                 (d)    the target for profitability for the following year, and

                                 (e)    the target for administrative expenses for the following year.

(7)  In addition to, or as part of, an annual review referred to in subsection (1), the Board must also conduct an open meeting each year, in accordance with the Board’s policies and procedures, to receive comments from the automobile insurance industry, the consumer representative and the public.

AR 117/2014 s9;275/2020

Other Matters

Board policies and procedures

10(1)  The Board must establish policies and procedures for the purpose of carrying out its functions under the Act and this Regulation.

(2)  The Board may, from time to time, amend its policies and procedures established under subsection (1) or establish new policies and procedures for the purpose of carrying out its functions under the Act and this Regulation.

(3)  The Board shall, within 30 days of making an amendment or establishing new policies and procedures under subsection (2), provide notice to the Minister of the amendment or new policies and procedures.

(4)  Amendments made or new policies and procedures established under subsection (2) may be reviewed by the Minister and the Minister may require the Board to change its policies and procedures.

AR 117/2014 s10;275/2020

Information required

11(1)  An insurer must, at the request of the Board, provide any information to the Board that the Board considers necessary, if the information can reasonably be obtained by the insurer, taking into account the cost and practicability of doing so.

(2)  For the purposes of carrying out any of its functions under the Act and this Regulation, the Board may

                                 (a)    specify the manner and form in which anything required to be filed or provided under this Regulation must be provided to the Board, and

                                 (b)    require anything filed with or provided to the Board to be verified as true and correct by a statutory declaration made by an officer of the insurer satisfactory to the Board.

Use of prescribed forms

12   An insurer must use any form prescribed by the Minister under section 803 of the Act.

Amendments, Review and
Coming into Force

13   (This section amends AR 129/2001; the amendment has been incorporated into that Regulation.)

Repeal

14   The Automobile Insurance Premiums Regulation (AR 124/2004) is repealed.


15   Repealed AR 74/2018 s3.

Coming into force

16   This Regulation comes into force on the coming into force of section 14 of the Enhancing Consumer Protection in Auto Insurance Act.

Schedules 1 to 4 Repealed AR 275/2020 s8.