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19. RATE REGULATION

In common with the P&C insurance industry in general, the Company is subject to regulation in certain jurisdictions whereby rates charged to customers for certain automobile insurance policies must be approved by the applicable regulatory body. This type of business comprises 44.2% (2015: 43.6%) of the Company’s total direct written premiums during the year. The Company is subject to three types of regulatory processes as follows:

2016 Three types of regulatory processes
Category Description
File and use Insurers file their rates with the regulatory authority and wait for a certain amount of time before implementing them.
File and approve Insurers file their rates with the regulatory authority and wait for approval before implementing them.
Use and file Insurers file their rates with the regulatory authority within a specified period after they are implemented.

The following table outlines the jurisdictions, regulatory authorities and regulatory processes that the Company is subject to:

2016 Jurisdictions, regulatory authorities and regulatory processes
Jurisdiction Regulatory authority Regulatory process
Alberta Alberta Automobile Insurance Rate Board File and approve
New Brunswick New Brunswick Insurance Board File and approve
Nova Scotia Nova Scotia Utility and Review Board File and use or file and approve
Ontario Financial Services Commission of Ontario File and use or file and approve
Prince Edward Island Island Regulatory and Appeals Commission File and use
Québec Autorité des Marchés Financiers Use and file