Regulator cautions brokers advising on optional auto benefits: “Stay in your lane”

When accident benefits optionality in Ontario comes into force July 1, 2026, brokers will have to be careful when they advise clients on whether to keep or drop the income replacement portion of their auto insurance, the province’s broker regulator cautioned last week.

“On that income replacement piece, [if your clients have] got a workplace benefit plan or something, you’ve got to be careful as a broker to stay within the bounds of your own license,” Registered Insurance Brokers of Ontario CEO Mark Abraham warned at an IBAOcon panel discussion in Niagara Falls last Wednesday.

“You may also have an accident sickness license, but if you don’t, you’ve got to be very careful not to stray into that [workplace benefits] territory, which can easily happen through that conversation.”

Starting next year, most Statutory Accident Benefits that are currently mandatory in Ontario will become optional — including income replacement, non-earner, caregiver, housekeeping and maintenance, death and funeral benefits, among others.

Related: Brokers say optionality will save Ontario drivers $100 at most per year

The new rules will require brokers to explain clearly what’s included in a standard policy and what’s not.

Opting out of income replacement benefits would save clients the most money out of all the new available options, brokers attending IBAOcon learned. Even so, dropping this benefit, which is now mandatory, would result in annual premium savings of just $75 per year.

In deciding whether or not to drop the income replacement benefit, consumers may need to review if they are receiving something equivalent from their workplace benefits plan, Abraham noted.

But workplace benefits are not part of the property and casualty insurance licence, and so P&C brokers who don’t have a life (accident and sickness) licence should exercise caution when talking to clients about dropping income replacement benefits, Abraham said.

For P&C brokers, it’s about knowing the right way to advise clients on some of the optional benefits. Abraham noted this will be covered in forthcoming training for brokers on the new optional accident benefits regime.

“Part of that training is understanding when it is the right time is to say, ‘You need to speak to your workplace benefits provider,’ and not say, ‘Hey, let me take a look at your workplace benefits plan and I’ll compare these coverages for you,’” he said.

“For you [P&C auto insurance brokers], there’s a real importance to stay within your own lane and not enter into unlicensed activities.”

Related: What optionality in personal lines means for brokers

Brokers on the panel recognized insurers are trying to help brokers avoid any E&O exposure as a result of the new Ontario optionality rules. Brokers in Ontario will have training modules available between now and the end of the year that will explain what brokers should and should not be saying to consumers about optional auto insurance benefits.  

Also, as part of this effort, brokers and auto insurers have worked with the Ontario government to create a new OPCF 47R form. This is intended to clarify which auto accident benefits clients have kept, and which they have dropped.

“The 47R is going to be a great document that you guys are going to enjoy,” Rick Orr, owner of Orr Insurance Brokers, said at IBAOcon, catching himself over his choice of words.

“Enjoy,” he poked fun at himself, before correcting: “It’s helpful. It lists all of the options that are available. There’s actually a button beside each coverage that says, ‘I accept’ or ‘I decline.’ It is very clear to consumers what they’ve picked and what they haven’t picked.

“It’s going to form a lot of the conversations that your staff or you have with consumers…. It came a long way from where [this initiative] started.”