1 week Ago
After four severe weather events this summer that saw a spike in natural-disaster claims in Canada, property and casualty insurers are asking insurance regulators to establish a more cohesive licensing regime that will allow adjusters to work in multiple jurisdictions across the country. In an open letter on Monday, a coalition of property and casualty industry associations are asking two of the country’s main regulatory agencies – the Canadian Insurance Services Regulatory Organizations (CISRO) and the Canadian Council of Insurance Regulators (CCIR) – to develop a licensing reciprocity regime that will enhance Canada’s disaster readiness by more easily allowing claims adjusters to work across the country, particularly as the industry faces a surge in claims after back-to-back summer storms. “We are entering truly unchartered waters, and patience will be needed as the property and casualty industry undertakes in earnest its efforts to help its home, auto and businesses customers recover,” the letter said.
Currently in Canada, each jurisdiction has its own rules and requirements for adjusters, which means a provincial licence for an adjuster is not recognized in every other province. “There is simply no reasonable public policy rationale justifying this type of fragmented approach to licensing,” the coalition wrote. The coalition includes the Insurance Bureau of Canada, the Canadian Association of Mutual Insurance Companies, the Canadian Insurance Claims Managers Association, the Canadian Independent Adjusters’ Association, the Insurance Brokers Association of Canada, the Canadian Association of Direct Relationship Insurers and the Omnia Adjusters Cooperative.
Over the summer, insurance companies saw the number of claims submitted in just a two-month period reach “well over 200,000,′′ the coalition said – more than insurers have received in any full year before 2024. And while the industry says it has taken a number of steps to “adapt to the new normal” of higher frequency and severity of catastrophes, such as establishing expedited claims-handling processes and creating specialized field teams for complex losses, the new normal is “increasingly a moving target,” the coalition said. The CCIR and CISRO did not immediately respond to The Globe and Mail when contacted for comment.
Severe weather events in 2023 caused $3.2-billion in insured losses, one of the highest annual totals on record, according to the Insurance Bureau of Canada. That compares with the just $400-million in claims the industry saw in 2008.
The in the Greater Toronto Area caused more than $940-million in insured damages, while the Jasper, Alta., wildfire . The final tally of total losses from Hurricane Debby has yet to be released.
One result of the spike in multiple weather events will be a “delay in recovery, stemming from the shortage of insurance adjusters and skilled labour,” the group said. In the wake of the Jasper wildfire – along with a hailstorm that – the Alberta Insurance Council was quick to approve temporary “expedited adjuster licensing” for non-resident adjusters that will expire in June, 2025. After floods in Montreal and other municipalities this year, Quebec regulators eased their rules and allowed insurers to use other licensed individuals known as supernumeraries as claims adjusters – including those from other provinces and the United States.
The Financial Services Regulatory Authority of Ontario implemented temporary measures this summer to allow insurers to use claims adjusters who have licences from outside the province. However, these measures expire at the end of October. The ability to rapidly deploy adjusters is an increasingly vital component of insurers’ claims response, the letter added.
And while the recent temporary measures are welcomed by the industry, they are an “imperfect solution.” These measures, the coalition says, have limited periods and at times onerous application and reporting requirements. They also rely on regulators to introduce measures in times of need and in a timely fashion.
“Even with an expedited process, hundreds of applications can still take weeks to process, delaying the claims progression and frustrating disaster victims,” the group said. “While the insured losses from these catastrophic events are startling, it’s the sheer volume of impacted homes and businesses that is concerning.”.
