P&C coalition urges Canadian regulators to address need for adjusters

P&C coalition urges Canadian regulators to address need for adjusters | Insurance Business Canada

Claims

P&C coalition urges Canadian regulators to address need for adjusters

“Decisive action is needed”

Canadian regulators have been called to help address the urgent need for claims adjusters after a record-breaking summer of natural catastrophes.

A coalition of property and casualty (P&C) industry insurance associations penned an open letter to the country’s two main regulatory agencies – the Canadian Insurance Services Regulatory Organizations (CISRO) and the Canadian Council of Insurance Regulators (CCIR) – expressing concern over the “sheer volume” of homes and businesses impacted by four consecutive catastrophic events within a short period.

According to the Insurance Bureau of Canada (IBC), insurance claims from Canada’s summer storms have now hit well over 200,000. Insurers have received more claims from catastrophic weather in two months than they have received in any full year before 2024.

It urged regulatory bodies to establish a licensing reciprocity regime for adjusters to facilitate recovery in affected communities and help expedite claims processing. A reciprocity regime would mean that if an adjuster is licensed in one province, their license is recognized across the country.

“As it stands, each Canadian jurisdiction has its own rules and requirements for adjusters. There is simply no reasonable public policy rationale justifying this type of fragmented approach to licensing,” the open letter, published on the IBC’s website, said.

“The troubling fact is that the number and severity of damaging weather events and natural disasters is surging. Floods, wildfires, hailstorms, windstorms and heat waves are an escalating threat across Canada. More homes and communities are being affected. The lives of more Canadians are at risk. Decisive action is needed to better protect lives and property.”

The coalition includes the Insurance Bureau of Canada (IBC), 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.

Canadian regulators implement temporary measures

In the letter, the P&C coalition also recognized regulators’ recent efforts to expedite the claims administration process. However, it said regulators and governments must continue to take action to enhance Canada’s disaster readiness.

In a statement to Insurance Business, the Canadian Insurance Services Regulatory Organization (CISRO) acknowledged that natural catastrophe events have been occurring with “increased frequency across the country.”

While it supports efforts by the insurance industry to proactively prepare for future nat cat events, CISRO noted that the “ultimate accountability” for licensed adjusters lies with its individual member organizations.

“As noted by industry, CISRO members have been responsive and have implemented temporary measures that allow for the timely admission of adjusters from other jurisdictions,” said CISRO chair Patrick Ballantyne. “While there is a shared interest in having appropriate resources available, the ultimate accountability for licensing qualified and suitable individuals rests with regulators.”

CISRO is a forum of Canadian regulatory authorities dedicated to consistent qualifications and conduct of business standards for insurance intermediaries. In April, it established an Adjuster Licensing Committee (ALC) to provide recommendations to its members on the mobility of out-of-province adjusters for claims arising from natural catastrophes.

“To date, much of the ALC’s work has focused on efforts by member regulators to implement temporary measures that allow for the admission of out-of-province adjusters to respond to these events,” Ballantyne said.

“Through the work of the ALC and other initiatives, CISRO remains committed to working collaboratively with industry and government to enhance Canada’s disaster readiness.”

P&C insurers warn of ‘recovery delays’, growing need for more licensed adjusters

This is not the first time the Canadian P&C industry has spoken out about claims challenges amid the rising frequency of natural catastrophes. Earlier this year, the IBC said it had been coping with a tremendous increase in the volume of claims.

According to IBC, there were roughly 694,000 claims related to extreme weather events between 2004 and 2013. Ten years later, the number has risen to over 1.3 million.

“Canada’s insurers have been there – and will continue to be there – for customers in need. But pressures on the industry are growing,” the open letter said. “Severe weather events in 2023 caused $3.2 billion in insured losses, one of the highest annual totals on record. The confluence of multiple disasters this summer has resulted in billions more in losses.

“There will be recovery delays stemming from the shortage of insurance adjusters and skilled labour, and pressures on the domestic and global reconstruction supply chain.”

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