Facility Association conducts semi-annual pricing survey

Facility Association is conducting a private passenger semi-annual pricing survey, intended to determine whether the rates of the residual market are lower than those of its member companies.As a “market of last resort,” the Facility Association should generally be charging higher premiums than those of member insurers willing to write the risk voluntarily. “From time to time, risks come to be insured through Facility Association because Facility Association’s premiums are lower than those of member companies,” FA says in a bulletin to members outlining the purpose of the survey. “Although rates are developed based on actuarial analysis, the range of acceptable actuarial opinions at the risk level can be relatively wide. “On that basis, Facility Association is surveying member companies on a semi-annual basis to identify classes of risk where Facility Association’s rates are inappropriately below those of member companies.”FA’s survey is voluntary. It applies to private passenger vehicles only in the following jurisdictions: Ontario, Newfoundland and Labrador, New Brunswick, Nova Scotia and Prince Edward Island.The survey is divided by jurisdiction and by market type; standard and non-standard.The information from the confidential survey will be combined with FA’s own analysis of market premium levels and its actuarial pricing analysis to make sure FA prices are not inappropriately below those of its members. The deadline for completing the survey is May 13, 2011.