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Question 14:   What underwriting rules are automobile insurers prohibited from using in Newfoundland and Labrador?

Underwriting Rules are used by insurers to determine whether to accept or decline a risk, coverage, deductible level, or liability limit. Automobile insurers are prohibited from using any underwriting rule which is subjective, arbitrary, bears little or no relationship to the risk to be borne by the insurer, or is contrary to public policy. Insurers are also prohibited by legislation from using the following specific elements to decline or terminate coverage:

  • age, sex or marital status
  • not at fault losses
  • insured has inquired as to coverage or has advised of an accident for which no payment of indemnity was made
  • nonpayment of premium, other than first payment, where a dishonored payment was replaced within 30 days of its original date
  • insured has been declined or refused insurance by another insurer
  • lapses in insurance coverage of less than 24 months, with specific exceptions
  • insured does not have another insurance policy of any kind with the insurer
  • insured is or was insured through Facility Association
  • vehicle age, except that the insurer may require a satisfactory inspection certificate be provided where the vehicle is eight years or older
  • the length of time the applicant or a person insured under a contract has held a valid driver’s license for the type of vehicle being insured
  • the lack of a driver training program unless otherwise required by law
  • credit information

Please see Newfoundland and Labrador Regulation 80/04 for further details: https://www.assembly.nl.ca/Legislation/sr/Regulations/rc040080.htm

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