What Widespread Driver Non-Compliance Means for Commercial Auto Underwriting

December 1, 2025

Crackdowns in Ontario and other provinces reveal a growing national problem in commercial driver compliance. Here’s why weak driver screening creates hidden exposures and three key things commercial auto underwriters should know.

Recent investigations by the Ontario Ministry of Transportation (MTO) uncovered a web of non-compliant commercial operators that’s putting Canada’s fleets and the carriers who insure them at risk.

Training and testing irregularities at several commercial driving schools resulted in the suspension of dozens of Class A licences, and the need for robust driver vetting has taken centre-stage.

“These events highlight the importance of accurate driver data and continuous compliance screening that help reduce risk and ensure underwriting integrity,” says Kevin Carroll, Vice President, Insurance Solutions at ISB Global Services.

Police crackdowns in other provinces have reported similar findings, signalling the issue extends beyond isolated operators. Transport Canada data shows commercial vehicles are involved in nearly 20% of all road fatalities in the country. Improperly licensed or non-compliant drivers appear disproportionately in severe collisions.

"Every time a driver is misclassified, missing an endorsement, or operating with an invalid licence, the likelihood of a claim increases," Carroll explains. "It affects pricing, eligibility and the overall health of a commercial auto portfolio."

Add rising loss severity, higher cross-border litigation costs, and an uptick in serious collisions, and it becomes even more important for insurers to trust the driver data used at binding.

Three Things Underwriters Should Know

1. Systemic Gaps in Commercial Driver Compliance Are Clear:

These recent investigations exposed fraudulent or inadequate training programs, instructors bypassing required standards, incorrect licence classes being issued and operators submitting driver information that did not match ministry records.

“The concern goes far beyond one training school,” Carroll says. “It reveals weaknesses across the system that influence and even undermine an underwriter’s decisions. For insurers, these weaknesses translate directly into mispriced risks and avoidable severity when a claim involves a driver who should never have been behind the wheel.”

2. Traditional Driver Vetting Creates Underwriting Blind Spots

If underwriters are equipped with centralized driver record data and continuous automated intelligence, they won’t miss red flags these systemic gaps often lead to, like suspended licences, incorrect or missing endorsements and criminal violations.

But many insurers still depend on driver-submitted abstracts, manual document collection, or annual review cycles at renewal. These approaches do not capture the reality that driver records change throughout the year, Carroll explains.

“A licence can be suspended tomorrow. If no one checks for months, the insurer is carrying exposure they did not agree to,” Carroll adds.

This creates blind spots that affect pricing accuracy, eligibility decisions, claim frequency from non-compliant drivers, severity when improperly licensed operators are involved, coverage defensibility, and overall underwriting discipline.

Cross-border fleets face amplified risk, since misclassified or non-compliant drivers increase exposure to U.S. litigation, including nuclear verdicts.

3. Continuous, Smart Driver Screening Is The New Standard

The solution is better data delivered more often, Carroll says, and leading insurers are turning to centralized data platforms to deliver it.

Tools like ISB's Red Flag Alerts centralizes and automates driver-abstract collection and analysis in a secure online system, then checks each record against the insurer’s compliance criteria. It immediately flags suspensions, convictions, licence-class issues, missing endorsements and other signals of elevated risk.

“Automated driver data doesn’t just streamline workflows and boosts efficiency. It gives underwriters clarity about who is actually eligible to drive at the click of a button,” Carroll adds. “It removes busywork and guesswork and replaces it with verified information that supports better pricing and reduced risk, so underwriters make better decisions faster.”

Key advantages for insurers and the fleets they cover include:

• Enhanced eligibility assessments with always-accurate, ministry-sourced driver record abstract data.
• Transparent and customizable rule application across an entire fleet no matter its size.
• Faster and more consistent compliance workflows with time-stamped, audit-ready documentation for defensibility.
• Reduced exposure to fraud, misrepresentation and inaccurate abstracts.
• Improved selection and pricing discipline.

Regulatory enforcement across Canada shows a commercial driving ecosystem facing growing pressure. Weak compliance oversight and driver screening practices create hidden exposures that often surface only when a collision occurs.

“Underwriters can’t control training schools, licensing processes or suspicious operators, but they can control the quality and frequency of the data they use to evaluate fleets and reduce risk,” Carroll says.

Because eligibility, restrictions and convictions can change throughout the year, Carroll recommends quarterly screening as an emerging best practice.

“Driver records evolve constantly, and Red Flag Alerts enables continuous screening at an underwriter’s fingertips so they can reduce surprises during the policy term,” he adds.

Stronger Driver Data, Stronger Underwriting

The recent crackdowns make one thing clear for commercial auto underwriters: stronger driver data and real-time red flags have become essential to stronger underwriting decisions and improved compliance.

Sophisticated, ministry-sourced screening like Red Flag Alerts, provides real visibility into licence status, endorsements and new convictions, at any time. It supports better pricing, clearer eligibility decisions and stronger defensibility when claims are challenged.

“As driver risk continues to evolve, underwriters with always-accurate driver data will be the ones best positioned to protect profitability across commercial auto portfolios, support safer fleets and improve road safety across Canada,” Carroll says.