In Canada, each province and territory requires drivers with a registered motor vehicle to have automobile insurance. Insurers must provide proof of such insurance to policyholders, and policyholders must carry proof of automobile insurance with them in the motor vehicle at all times. In Ontario, the Compulsory Automobile Insurance Act (the “CAIA“) provides that insurers must issue an “insurance card” to a person with whom a contract of automobile insurance is made or whose contract of auto insurance is renewed.
In Ontario, the provincial government introduced its intention to approve the electronic version of insurance cards under the CAIA in its April 2019 budget, Protecting What Matters Most under the heading “Putting Drivers First Blueprint“, and effective as of September 5, 2019, Ontario became the fourth province to approve the use of electronic proof of insurance, after Nova Scotia, Newfoundland and Labrador and Alberta.
The Financial Services Regulatory Authority of Ontario (“FSRA“), in its September 5, 2019 Bulletin titled “Modernizing automobile insurance – approval of electronic insurance card” (the “FSRA Bulletin“), approved the use of electronic insurance cards in accordance with the provisions of the CAIA.
The FSRA Bulletin provides for a one-year transition period commencing on September 5, 2019 during which insurers must continue to issue the currently approved paper version of the insurance card. Once the transition period expires, consumers will have the option to choose to receive their insurance cards electronically, in paper format or both.
The use of electronic insurance cards in Ontario will be subject to certain conditions including, among other things, the following:
Approved Form
It must contain the same data fields, text and overall appearance as the currently approved paper version and must be pink in colour.
Consent is Required, Use is Optional
The use of electronic insurance cards is optional for both insurers and policyholders, and insurers must obtain the policyholder’s informed consent to the use of electronic insurance cards before issuance.
Accessibility, Retention and Transfer
The electronic insurance card must be accessible so as to be usable for subsequent reference and be capable of being retained by another person in compliance with the provisions of the Electronic Commerce Act (Ontario).
The electronic insurance card must also have the capability to be emailed or transferred by the policyholder to a third party, such as law enforcement or permitted users of the motor vehicle.
Privacy and Security
Electronic insurance cards must also comply with the consent requirements under the Personal Information Protection and Electronic Documents Act (“PIPEDA“) and have appropriate security safeguards in accordance with the provisions of PIPEDA. In the FSRA Bulletin, FSRA expressly states that an electronic insurance card “must not include features that monitor, track location, or collect, use or disclose personal information, without the policyholder’s knowledge and his or her informed consent”.
In particular, insurers are responsible for ensuring that the electronic version of the insurance card is: (i) in a downloadable form that can be stored in a secure manner on an electronic mobile device, (ii) not able to be edited or altered, and (iii) is able to be viewed using lock screen capability and the insurer must provide clear plain language instructions to policyholders of how to set the locked screen as a default feature.
Risk of Damage to Mobile Devices
Insurers must make it clear to policyholders that if they choose to receive an electronic insurance card, the policyholder assumes any risk or damage that may occur to the mobile device in the hands of a third party, such as law enforcement or Service Ontario.
Caution to Consumers
Whether a policyholder chooses the electronic version or the paper version of the insurance card, operators of motor vehicles are required under the CAIA to have an insurance card in the vehicle for inspection at all times. This requirement applies regardless of any technological problems that may affect a policyholder’s mobile device, such as a drained battery, lack of or diminished cellular service or limited or obstructed visibility of the insurance card due to a damaged screen or other malfunction. FSRA recommends that insurers remind policyholders of their obligations under the CAIA before issuing an electronic insurance card.
Watch for any further updates on FSRA’s website, which can be accessed here.
