The government of British Columbia has announced changes to strata insurance regulations aimed at addressing the rising cost of insurance for condos and townhouses and bringing “further transparency” to the industry.
The changes follow an interim report released by the B.C. Financial Services Authority (BCFSA) in June 2020, which found that premiums on strata corporations – or councils involving condo and townhouse owners –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.
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In a statement, the B.C.’s finance ministry laid out several regulatory changes to the Financial Institutions Act, which includes requiring 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,” effective November 1.
“This change ensures strata corporations have advanced warning of cost increases and has time to seek other insurance options if desired,” said B.C.’s finance ministry.
Additionally, insurance agents will be required to disclose their commission amount, or a reasonable estimate, to strata corporations – and 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,” said the finance ministry.