General Insurance Statistical Agency GISA

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General Insurance Statistical Agency (GISA)

• Presentation to
• Ontario Conference of Casualty Actuaries
• November 9, 2005

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1. Background

• Regulators have authority under their respective
  insurance legislation to appoint a statistical
  agent to collect information from all licensed
  insurers.
• IBC has been designated as statistical agent for
  three statistical plans
• Automobile Statistical Plan (eight
  jurisdictions)
• Commercial Liability Statistical Plan (Ontario
  only) and the
• Ontario Statutory Accident Benefits Statistical
  Plan (Ontario only).
• IBC collects data from insurers and compiles the
  exhibits for the jurisdictions and recovers its
  costs via assessments to insurers and deficiency
  fees charged

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2. Need for Action

• Recent auto insurance crises and reforms have
  increased the focus on the ASP.
• Changes to ASP required to monitor impact of
  changes.
• In Atlantic provinces, Alberta and Ontario there
  have been increasing questions on automobile
  insurance costs and in some cases the reliability
  of data raised by various stakeholders.
• Increased scrutiny of the auto insurance system
  and the need for quality data on a more timely
  basis to review costs and rates, understand the
  issues and develop appropriate solutions.

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2. Need for Action contd

• Technological advances and increased access to
  data has resulted in new and more sophisticated
  rating, classification and underwriting
  techniques
• From time to time, the ASP needs to be
  updated due to
• - product or legislative changes
• - emerging issues or trends
• - changes in rating practices
• - technological or system changes
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3. Action Taken

• Canadian Council of Insurance Regulators (CCIR)
  established a working group in February, 2004.
• Working group conducted a comprehensive review of
  the issues and identified options.
• CCIR accepted recommendation to establish an
  independent, non-profit agency to act as the
  statistical agent.
• Effective June 28, 2005, GISA is a federally
  incorporated not-for-profit agency and will be
  individually named the statistical agent by each
  participating provincial and territorial
  government by their respective regulator.
• Each participating regulator is a member of GISA.

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4. Governance

• GISA is governed by a Board of Directors with the
  majority membership comprising the regulators.
• Board Of Directors is a tri-partite board,
  comprising regulators, insurance industry
  representatives and public representatives.
• Board has also established 3 committees
• Executive Committee
• Finance Audit Committee
• Technical Advisory Committee
• Executive Committee
• Consisting of a Chair and 2 Vice-Chairs,
  provides oversight and direction on the general
  operation of the agency and the Secretariat.

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4. Governance Contd.

• Finance Audit Committee
• Oversees, provides advice and makes
  recommendations to the Board on
• External Audit
• Internal Control and Risk Management and
• Financial performance and planning.
• Technical Advisory Committee
• Comprised of 10 members, provides advice and
  makes recommendations to the Board on
• Possible changes to the Statistical Plan and
  associated exhibits and reports
• Significant data requests
• System changes requested by members or by the
  service provider
• Data quality issues and
• Emerging issues on the statistical plan.
• Actuarial services.

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4. Governance Contd.

• GISA Secretariat
• Provides support and consists of 2 staff a
  Manager and an Administrative Assistant
• FSCO will provide supporting functions to the
  Secretariat

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4. Governance Contd.
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5. Cost Recovery

• GISA will be fully cost recoverable, non-profit
  organization.
• GISA will recover its expenditures by assessments
  and deficiency fees collected by the IBC as
  service provider.

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6. Service Contract with IBC

• A commercial contract will be made between GISA
  and the IBC to provide statistical services.
• Draft contract developed by regulators and
  currently under discussion.
• Discussions are being facilitated by a consultant.

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7. Outstanding Data Elements

• Regulators had requested additional data elements
  be collected to keep the Stat Plan more current
  with industry classification plans
• These include territory and use of FSA,
  expanding fields such as year licensed, year
  claims free, value coding for deductible/liability
  limits
• Benefits
• Actuarial support for class changes
• Address data credibility concerns
• Improve access to industry-wide data
• Reduce time lag with quarterly report
• GISA needs to approve final data elements

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8. Technology Redesign

• Current system is dated and at capacity. 20
  outstanding changes to ASP as requested by
  regulators.
• IBC is proposing a major software and technology
  redesign to support ASP and other IBC functions.
• IBC had original proposal reviewed by an external
  consulting firm and had consultations with
  industry.
• IBC has revised its proposal based on the
  feedback.
• IBC to present redesign plan to GISA

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9. GISA Designated the Statistical Agent

• January, 2006