Will Ontario’s auto insurance fraud reporting service go national?

Ontario’s insurance regulator is moving ahead with its auto insurance fraud reporting service next year, with hopes the initiative will go national, a Financial Services Regulatory Authority of Ontario (FSRA) executive said in late November at KPMG’s 2025 Insurance Conference.

The fraud reporting service also aims to establish a baseline for fraud in the industry, which can be difficult to pinpoint.

“Insurance fraud/insurance crime continues to be one of the single-largest cost drivers in the product today,” Glen Padassery, executive vice president of policy and auto/insurance products at FSRA, said Nov. 25 during an insurance regulatory issues panel. “I’m talking about auto insurance, but also for property and casualty at large.”

Padassery outlined the three-pronged fraud and abuse reduction strategy from the regulator and Ontario government, the first phase of which is now in place.

“It is the establishment of a new fraud reporting service,” he says. “And it will be the first time in Canada that we will mandate that insurers are to start reporting all suspicious cases of fraud to us or through a service provider.

“And next year, the new fraud reporting service will be up and active, and we’ll be getting all insurers to start reporting in Ontario. The hope is that you’re going to see this as a national initiative, and other jurisdictions will carry forward with that with us…”

Sue Ling Yip, a partner in KPMG Canada’s risk consulting and financial crimes practice, asked Padassery what FSRA is trying to achieve with this initiative and what is to be expected as the initiative is rolled out.

Padassery said the fraud reporting service is intended to establish industry-wide reporting; provide a way to analyze data and predict emerging trends; and establish a baseline of fraud in the industry.

Unclear costs

Financial and insurance crime in Canada is estimated to cost upwards of $5 billion a year, Yip adds. “This is just the events that we do know about.”

It can be difficult to get a true estimate of the costs of insurance crime, which is why establishing a baseline is important. Équité Association says it’s estimated insurance crime costs Canada between $3 billion and $5 billion a year.

For auto theft in particular, the cost of insurance claims for replacing stolen vehicles in Canada skyrocketed to a record-breaking $1.5 billion in 2023, up from an estimated $1.2 billion in 2022.

“The next phase is to really equip insurers with the tools to be able to actually address those fraud incidences when they come up,” Padassery says. “By that, we mean we’ll start mandating that the information is shared amongst insurers who are participating in the fraud reporting service.”

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FSRA intends to give insurers the tools to be able to “put real power” around stopping fraud when they see it.

Lastly, the initiative will hold insurers accountable from a pricing perspective.

“By that I mean, if you see fraud and you are addressing fraud, theoretically, from a consumer standpoint, you should start seeing the price of the product start to reduce, because the cost of the fraud is really passed on directly to the consumer,” Padassery says.

Jason Contant

Jason has been an award-winning journalist with Canadian Underwriter for more than a decade, including the past three years as associate editor and, before that, as digital editor for seven years.