Amendments to bring greater transparency to strata insurance

THE Province announced on Sunday that changes to strata insurance regulations will help address the rising cost of strata insurance in B.C. and bring further transparency to the industry.

Changes to B.C.’s Financial Institutions Act:

* Effective November 1, amendments will require insurers or insurance agents to provide 30-day advanced notice directly to strata corporations of their intention to not renew an insurance policy or of any material changes to the policy. This change ensures strata corporations have advanced warning of cost increases and has time to seek other insurance options if desired.

* As well, insurance agents will be required to disclose their commission amount, or a reasonable estimate, to strata corporations. Insurers who fail to meet these disclosure requirements face penalties of up to $25,000 for an individual or $50,000 for a corporation.

* Lastly and effective immediately, referral fees to strata property managers from strata insurance transactions are prohibited.

These changes will bring further transparency to the strata insurance market and help strata corporations maintain their financial sustainability by providing them the information they need to make informed decisions about their insurance needs.

These amendments followed the interim report released by the B.C. Financial Services Authority (BCFSA) in June 2020. The report found that strata premiums have risen by approximately 40% throughout the province on a year-over-year basis, with deductibles experiencing up to triple-digit increases over the same period.

The BCFSA will be releasing their final report and recommendations on the rising costs of strata insurance in B.C. in fall 2020.