Take-All-Comers Rule

Study guide: Exam 6C

The Take-All-Comers Rule requires an insurer licensed to write compulsory automobile insurance in a province to offer coverage, at its filed rates, to any applicant who meets its filed underwriting rules — it may not decline, or quietly discourage, an eligible applicant it would prefer not to write.

The rule exists because auto insurance is compulsory. If the state requires a driver to buy a product, it must ensure the product is actually purchasable; otherwise the mandate becomes a prohibition on driving for the risks nobody wants.
What it forbids in practice: refusing to quote, quoting a deliberately unusable price outside the filed plan, imposing unfiled conditions, or steering an eligible applicant to an affiliate or to the Facility Association to avoid writing them.
What it does not forbid: applying filed underwriting rules. An insurer may decline an applicant who fails a rule it has filed and the regulator has accepted — the rule must simply be written down, approved, and applied consistently.
The rule is the reason the Facility Association is a residual mechanism of last resort rather than a dumping ground: risks reach it because no insurer's filed rules accept them, not because insurers chose not to write them.
Enforcement is a market conduct matter — mystery shopping, complaint patterns and broker reports — and penalties reach licence conditions.
The actuarial consequence is that an insurer cannot rely on underwriting selection to fix an inadequate approved rate. If the rate is inadequate for a segment the filed rules accept, the insurer must write it at that rate; the only lawful responses are to change the filed rules or to change the filed rate.

Compliant or Not? Assess each practice by an insurer writing compulsory auto in a take-all-comers province.

Declining an applicant with three at-fault accidents in three years, per a filed underwriting rule.

Telling a broker informally to stop submitting applications from new drivers because "we're full."

Quoting an eligible applicant a premium $40\%$ above the filed rate because the underwriter dislikes the risk.

Requiring an eligible applicant to also purchase a home policy before auto coverage will be issued.

Answer

Compliant. Filed, objective, consistently applied. The applicant will likely reach the Facility Association, which is what the residual market is for.

Not compliant. This is a decline by another name — an unfiled underwriting restriction applied through the distribution channel. It is also the hardest kind to detect, which is why regulators use broker surveys and complaint patterns rather than waiting for filings.

Not compliant, and separately a rate violation: rates must be the filed rates. Charging off-plan is deviation from an approved filing regardless of the take-all-comers issue.

Not compliant. Tied selling conditions the compulsory product on the purchase of a discretionary one, which is a conduct violation in every Canadian jurisdiction.

The pattern: only item 1 works, because only item 1 is written down and filed. Take-all-comers converts underwriting judgement into a published rule.