Changes to strata insurance regulations to deal with rising costs, aid transparency

Strata insurance regulations will be seeing a change this year, to help address the rising costs and bring further transparency to the industry.

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

• Effective Nov. 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.
• Insurance agents will be required to disclose their commission amount to strata corporations. Those who do not face penalties of up to $25,000 for an individual or $50,000 for a corporation.
• 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 follow the interim report released by the B.C. Financial Services Authority (BCFSA) in June.

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. later this fall.