In an effort to promote fair pricing practices for consumers of commercial property insurance, the province’s Superintendent of Insurance has issued a bulletin, calling on insurers and brokers to discontinue best terms pricing practices as of July 31, 2023.

Although many insurance companies and brokers have discontinued best terms pricing, the practice is still in use.

Best terms pricing occurs when brokers bring together multiple insurers, with each taking a portion of the total risk. The resulting policy is referred to as a subscription policy. Insurers can choose if they would like to participate (or ‘subscribe’) in a policy where the risk associated with providing the insurance is shared. In putting together such a policy, each insurer submits its own quote. Under best terms pricing models, the final premium paid by the client is calculated based on the highest rate quoted, even if the majority of quoted rates were lower.

A bulletin has been issued as a result of a review by the Canadian Council of Insurance Regulators (CCIR) on the prevalence and impact of best terms pricing. In its review, which included engagement with insurers and brokers, the CCIR concluded that best terms pricing may lead to higher insurance premiums, and does not support the fair treatment of consumers. The bulletin can be viewed here.

The department encourages consumers to seek quotes from multiple insurers to get the best coverage and rate for them. Licensed insurers are listed on the department’s website. Further information on complaints processes for insurance can also be found online.

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