Affiliated Insurers

jc2018jc2018
in FSCO.PPA

Hi,

I am unsure about the UDAP.
Is it unfair if the company A affiliated with company B has a rating that results in higher premium than company B for a same profile or is it unfair if company A, during the quote process, it provides its premium that is higher than B even though the client is quoting with A? If latter, does it mean that all affiliated companies have to share their rating systems?

Thanks,

Comments

  • grahamgraham

    I just reread that section from the FSCO.PPA paper (bottom of page 3). It seems to say that it is fair for company A to have a higher rate versus company B for the same risk, but that it is unfair for company A to actually charge this higher rate. Company A must charge the lower rate of Company B.

    For company A to comply with UDAP, they obviously must know what company B charges. Whether A has full knowledge of company B's rating system, I don't know, but they must at least have access to B's individual rates. The obvious question then is:

    • why don't all affiliated companies just use the same rating systems?

    Regarding the details of how it works in practice for affiliated companies, I don't know. I googled UDAP and there's lots of information available online, but it's outside the scope of the syllabus.

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