Whereas over the past year stratas and non-profit housing providers have experienced substantial increases to insurance premiums andor found it difficult to secure an insurer for their buildings; And whereas multi-residential housing constitutes a large portion of British Columbias housing stock; And whereas the BC Financial Services Authoritys BC Strata Property Insurance Market Interim Findings report identifies several fundamental issues straining the strata insurance market that are not addressed in the Provinces proposed amendments to the Strata Property Act and Financial Institutions Act, including a lack of capacity in the strata insurance market to support future expected demand: Therefore be it resolved that UBCM call upon the Province to take further evidence-based actions to address rapidly increasing insurance costs for multi-residential housing.
Ministry of Finance The Strata Property Act SPA requires strata property corporations to have and maintain insurance on common property, common assets and buildings shown on the strata plan. The Ministry of Attorney General and Ministry Responsible for Housing is responsible for the SPA. The Ministry of Finance is responsible for the Financial Institutions Act FIA, which provides the regulatory framework for insurance companies. The regulation of the insurance sector largely focuses on prudential regulation of insurance companies and market conduct of insurance companies and insurance agents and brokers. Insurance companies themselves determine the availability and cost of insurance, based on careful analysis to anticipate the expected frequency and severity of future claims. Insurers must price insurance at a level that allows for the sustainability of their businesses. There are a number of factors that are contributing to the current market conditions for strata insurance, including a high number of claims, aging infrastructure, the departure of an insurer from the BC market, as well as global issues such as climate change. Large scale disasters have also led to greater claims worldwide, causing reinsurance rates to increase, which is ultimately passed down to consumers. In August 2020, the Municipal Affairs and Housing Statutes Amendment Act No. 2, 2020 Bill 14 received Royal Assent, making a number of changes to the FIA and the SPA in order to begin to address the issue. Legislative amendments were largely related to reducing risk and increasing capacity for insurers. Further changes to the regulations under the FIA were also made, to ensure strata property owners are provided better disclosure from insurance companies and brokers. As well, in early 2020 government directed the BC Financial Services Authority BCFSA to conduct an in-depth review of the issue. An interim report issued in June 2020 concluded that the causes of price increases were complex and that the strata insurance market was unhealthy. The BCFSA has released their final report to help determine if there are other measures that can be taken to improve the situation for strata owners and strata corporations. The final report can be found online at: https:www.bcfsa.capdfpublicationsStrataInsuranceMediaRelease.pdf. The BCFSA also recently announced that insurers have agreed to eliminate the practice of best terms pricing in the strata insurance market which may help to curb rising strata insurance costs. Additional information can be found online at: https:www.bcfsa.capdfnewsMediaRelease20200112.pdf. Ministry of Finance staff, along with staff from the Ministry of Attorney General and Ministry Responsible for Housing, are looking to the BCFSAs final report to determine whether additional legislativeregulatory options or other types of policy options are appropriate, as part of an evidence-based approach to addressing this complex issue.