Some risks cannot be placed in the voluntary market.
- Facility Association (FA) is the Ontario non-profit residual market for automobile risks that cannot obtain coverage through any voluntary insurer. Every Ontario auto insurer is a member and participates in FA underwriting results. FA exists so the compulsory insurance regime under CAIA is not undermined by uninsurable risks.
- A broker placing a risk with FA must demonstrate the risk has been declined or unobtainable in the voluntary market (the usual rule of declinations from multiple insurers). FA premium is typically the highest in the market by design, it is a market of last resort.
- The Motor Vehicle Accident Claims Fund (MVACF) is the provincial fund that pays for bodily injury (and limited property damage) caused by an uninsured or unidentified driver where no other insurance responds. It is a "last-resort" recovery; recipients must demonstrate no other insurance applies.
The broker's duty is to attempt placement in the voluntary market first, document the declinations, then offer FA as the only remaining option. Recommending FA without first attempting voluntary placement is a conduct issue.
Common mistake: confusing the Motor Vehicle Accident Claims Fund with the Facility Association. MVACF is a fund of last resort for victims of uninsured drivers; FA is an insurer of last resort for drivers who cannot obtain voluntary coverage.
🧠 Memory hook, "FA = covers the driver; MVACF = pays the victim".
Recall: When is Facility Association the appropriate placement? What does the Motor Vehicle Accident Claims Fund cover?