FSCO Issues Bulletin on the Use of Credit Scoring in Automobile Insurance Quoting and Underwriting

The Financial Services Commission of Ontario has issued a Bulletin entitled Automobile Insurance Quoting and Underwriting Practices. It discusses in detail existing restrictions on the use of credit scoring in underwriting and risk classification for automobile insurance. The FSCO Bulletin may be found at:

While it is primarily aimed at insurance companies licensed to sell automobile insurance in Ontario, this issue impacts on the day-to-day business activities of brokers when collecting credit-related information for any purpose.

Brokers are reminded that section 14.5 of the RIBO Code of Conduct states that:

A member shall hold in strict confidence all information acquired in the course of the professional relationship concerning the business and affairs of the member’s client, and the member shall not divulge any such information unless authorized by the client to do so, required by law to do so or required to do so in conducting negotiations with underwriters or insurers on behalf of the client.

This is especially crucial when the information provided is of a highly sensitive nature such as that relating to an individuals credit situation.

Similarly, and as noted in the Bulletin from FSCO, Canadian privacy legislation establishes a framework for the collection, use and sharing of personal information. By way of example, an individual must receive clear and meaningful disclosure of the purpose for which the information is being collected, with whom it will be shared and how long it will be required. Further, the individual must give their consent to the collection, use and sharing of that information in accordance with that disclosure. Given the sensitive nature of credit information, the individuals express consent must be obtained.

RIBO has advised the Financial Services Commission that we will monitor this issue and report allegations, if any, of actions that do not conform with the principles set out in the Bulletin. Any broker with concerns regarding such activity is encouraged to contact RIBO.