Benefit of Switching from Prior Approval to Use&File
One of the points made here was - regulators can focus more on solvency which protects policyholders.
Then a short bloom taxonomy got me thinking, who is responsible for protecting policyholders? Which is federal regulators (McD.Intro), and premium falls under provincial. So maybe "focus on solvency" would not be the best answer?
Comments
Premium adequacy and the protection of policyholders typically falls under Provincial authority. More specifically, the insurance / utility / regulatory boards in each province oversee rate adequacy and fairness.
I think the point here is moreso saying that when examining the process for prior approval:
1. Insurer files proposed rates
2. Regulatory board review rates, asks questions, holds hearings (if required).
3. Regulatory board approves rates
4. Insurer uses proposed rates
Steps 2 & 3 can take anywhere from weeks to months. Staff from the regulatory board would be busy looking at the insurers rate filings to determine the appropriateness of assumptions, fairness of rates, etc. when they could be focusing on other things, such as licensing, monitoring market conduct, consumer protection, and enforcing provincial legislation.