July 30: Alberta Rate board orders 5% reduction in basic auto rates despite actuarial consultants recommending no change
    Basic auto insurance rates in Alberta will decrease by 5% effective Nov. 1.
    “This reduction is primarily the result of a projected decline in the number of bodily injury claims in the province this coming year,” Alberta Insurance Rate Board chairman Alfred Savage said in a prepared statement.
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July 29: Language problems when you have an auto claim in B.C.? You can talk to insurer in 170 plus languages
    Get in an auto accident in B.C. and don’t speak English too well when making a claim?
    Whether you normally speak one of the other major languages in the world or such lesser known ones as Hmong, Gujarati, Acholi, Wolof, Toishanese, Dinka, Chaochow or more than 165 others, ICBC has a translator at hand for you 24/7, 365 days a year.
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July 29: False insurance claims up in UK but fraudsters more likely than ever to get caught
    There was the man who claimed he had fractured his hand after falling over a pothole in the street when in fact he had sustained the injury after he punched a wall during a domestic dispute.
    The young woman who said she tripped over a loose pavement when her injuries were actually sustained from jumping down a flight of stairs while running away from security guards on suspicion of shoplifting.
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July 29: Deepwater Horizon explosion unsettles insurers but not a market changer -- Marsh
    The Gulf of Mexico oil rig explosion is an important event in the history of deepwater drilling and exploration insurance but not a market changer.
    In its latest Energy Market Monitor broker Marsh added the capacity currently is not an issue and insurers seem keen to maintain their commitment to the market.
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July 20: Wawanesa buys more Western Financial Group shares ‘as support’ for the company
    Wawanesa Mutual Insurance has disclosed the purchase of almost 900,000 common shares of Western Financial Group for $2.37m.
    It was one of several buyers who participated in a private placement sale of WFG stock at $2.65 per share last month.
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July 22: Follow-up: the contingent commissions fight blow by blow:
    Two of the biggest global brokers are now on opposite sides on the issue of whether it is proper for such commissions to be accepted.
    Round 1, July 20: The Willis Group ran a blistering attack on them in introducing a law firm’s white paper on the issue run as a special supplement in the July 19 Business Insurance and covered on our web site July 20 (see other stories).
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Break time
    Thompson’s annual summer publishing break is now upon us. Our next weekly print issue will appear Sept. 13. Our daily email news service will resume Sept. 7.
    Meanwhile our website will be updated with major stories as they occur.
    All of us here wish all of our readers a safe and happy summer season.
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July 22: Ontario auto rates start to drop as auto insurance reforms take effect
    Rate applications approved during the second quarter of 2010 averaged -1.03% based on the entire market, the province’s Financial Services Commission figures show.
    They will take effect Sept. 1, the same day as the new regulations.
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July 20: Business barriers between countries lifted after the end of the cold war created a free conduit for risk to travel the same path ─ Lloyd’s chairman
    Business has been quick to take advantage of the new opportunities to sell goods and services all over the world since then, said Lord Levene.
    Introducing a Lloyd’s 360 insight seminar, he said in the 1990s, and for the early part of this century, it really did seem to be a case of the triumph of the West.
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July 20: Willis Group ups fight against contingent commissions
    Not only do contingents have the potential to affect the loyalty and service insurance buyers get from their brokers, they also negatively impact the image of the industry, says company group chairman and ceo Joe Plumeri.
    He is writing in an introduction to a white paper on the issue written by international law firm Edwards Angell Palmer & Dodge.
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Brokers renew efforts to ward off banks
    The Canadian Bankers Association is so far downplaying its aspirations for the next round of financial institutions legislation review — due for 2012 — but p&c insurance brokers are remaining vigilant nonetheless.
    Unlike with the last review, when the bankers went all out in an attempt to overturn what they regarded as “archaic” and anti-consumer federal rules limiting their selling of p&c insurance in their branches, they are not anticipating a big shake-up of Canada’s financial services landscape.
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Insurer helping brokers prepare for reform
    RSA has invested close to $30,000 to help Ontario brokers prepare for e&o claims that may result from the province’s new auto reforms.
    “Lawyers’ groups in the province have already held some conferences on how members may possibly access brokers’ e&o coverage,” the insurer’s Ontario region vp Donna Ince said.
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Paris theft highlights need for proper artwork coverage
    Insured and held for hostage. Stolen to order. Or maybe a form of currency for criminal gangs.
    These are possible explanations offered up after a lone thief stole five masterpieces worth more than CAD$130m from the Musee d’Art Moderne this past spring in Paris.
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Insurers tap new tools to reach the high-tech generation
    There is more to mastering new media than setting up a web page and a Facebook account, incoming Insurance Brokers Association of B.C. president Richard Pindral said at the group’s annual general meeting in Victoria.
    Indeed, the Internet in general and social media sites in particular are essential for communicating with ‘Generation Y’ both as clients and as staff.
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Regulators look at MGAs and adjusters
    Regulation of managing general agencies, wholesalers and adjusters is among items up for review by the Financial Services Commission of Ontario.
    In its latest statement of priorities, released in late June, FSCO said it will be working with the Canadian Council of Insurance Regulators and Canadian Insurance Services Regulatory Organizations to identify and address risks to consumers, regulatory gaps and legislative and regulatory barriers with those commercial entities.
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Employer-owned cell phones pose liability dilemma
    Is an employer liable when an employee using a cell phone while driving causes an accident? And do laws banning the use of electronic devices behind the wheel increase such liability?
    As with most legal questions, the answer appears to be: ‘Yes, no and maybe.’
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Treatment camps divided over guideline
    Ontario’s new minor auto injury treatment guideline (Thompson’s, June 21) has pleased insurers but some other stakeholders are less than enthusiastic about the reform measure.
    The Insurance Bureau of Canada says the guideline goes a long way toward the provincial government’s goal of making sure accident victims receive appropriate treatment.
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Reputational risks emerging as top priority
    Reputational exposure is emerging as a primary concern for risk managers, an annual report from a UK trade group shows.
    A third of those polled by the Association of Insurance and Risk Managers regard it as a great or very great cause for concern.
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Insurer backs climate adaptation project
    Canada’s largest p&c insurer is teaming up with the University of Waterloo to study climate change mitigation strategies.
    Intact Financial Corp. and the university are launching a research project that will identify the most appropriate initiatives and action plans that governments, businesses and civil society could undertake to better adapt to the potential impacts and consequences of climate change on Canada’s ecological systems, its social fabric and the economy.
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Guidelines released for new auto regime
    The guidelines for the treatment of minor injuries that are key to auto insurance reforms in Ontario have been released by the provincial regulator.
    They include updated definitions, detailed treatment parameters and fee schedules for dealing with impairments that are considered minor when the reforms take effect Sept. 1.
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Industry tackling infrastructure risks with new software
    Canadian p&c insurers are pioneering the development of a web-based scoring mechanism that will provide municipalities with a visual representation of their at-risk zones.
    “It will enable them to identify their greatest infrastructure vulnerabilities and plan and build accordingly,” Insurance Bureau of Canada president and ceo Don Forgeron said at the World Conference on Disaster Management in Toronto.
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Ruling limits legal liability of drivers to passengers
    The move by an Ontario judge to strike down part of a designated driver lawsuit (Thompson’s, June 14) should afford motorists some relief regarding legal liability to their passengers, a Toronto lawyer says.
    “The decision has the effect of informing designated drivers that while they still bear the responsibility for what may happen to the drivers once they enter the automobile, that responsibility does not track backwards in time to when the consumption of alcohol began,” said Ian Gold of Thomas Gold Pettingill.
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Tornado gives insurers chance to show value
    A severe weather event earlier this month in and around the ‘tomato capital of Canada’ could leave insurers with a saucy bill in the tens of millions.
    But as the former ceo of the Insurance Bureau of Canada points out, it has also presented the industry with an opportunity to show how it shines.
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Ontario auto continues to slow industry results
    First quarter data for Canadian p&c insurers compiled by MSA Research shows a significant improvement for the industry over the same period last year.
    The industry-wide combined ratio fell to 97.1% this year from 104% for the period last year.
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World Cup cover pegged at $9bn
    The cost for insuring this month’s football World Cup has been pegged at around CAD$9.5bn (£6.2bn) — and that doesn’t even include the policies for the players themselves.
    Some of the stadiums involved have undergone major renovations and another five new ones have been built around host South Africa to accommodate millions of ticket-holders.
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Guidelines for G20 Summit claims released
    The Federal government says business owners and their insurers are mostly on the hook for any damages that may be incurred during the upcoming G20 Summit in Toronto June 25 – 27.
    It says one-time payments on a voluntary basis may be made to those who experience financial loss and who submit reasonable, justifiable and substantiated claims.
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Ban on banks’ online activities confirmed
    Canada’s banks will soon be officially out of the online insurance business.
    Federal Finance Minister Jim Flaherty has confirmed he will introduce legislation to ban the banks from promoting p&c and life insurance on the Internet.
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N.B. studies scoring proposal
    It could be a long time before the New Brunswick government decides on the use of credit scoring for residential property insurance, a Finance Ministry official said.
    Marc Belliveau was commenting on submissions on a discussion paper seeking feedback on the issue which the superintendent is now beginning to evaluate.
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Financial forum 1: Results suggest industry at bottom of cycle
    In Joel Baker’s analysis the best that can be said for 2010 is that it won’t be as bad as 2009.
    “The good news is that deterioration in underwriting results has stopped, so we’re looking at the bottom of the cycle,” the MSA Research and National Insurance Conference of Canada president said at the first annual Canadian Insurance Financial Forum.
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Financial forum 2: Importance of risk models highlighted by crisis
    There are lessons insurers can learn from the most recent and ongoing financial crisis when looking at their capital management regimes and models, said the chief risk officer for ACE Canada.
    Shawn Doherty noted that capital supports the balance sheet risks, current operations and growth and acquisitions.
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FA permitted to include cost of capital
    The Facility Association has been given the green light to include cost of capital in its auto insurance rates in Nova Scotia.
    The Nova Scotia Utility and Review Board said there is nothing in the Insurance Act which explicitly prevents it from allowing FA “to include such a cost of capital provision in its proposed rates, or which prevents the board from approving such rates, provided they are just and reasonable.”
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Saskatchewan creates restricted agents licence
    Using Alberta’s rules as a guide, Saskatchewan has introduced legislation creating a new restricted form of insurance licence.
    Effective Sept. 1 various businesses may apply to be licensed as restricted insurance agents, authorized to sell incidental insurance geared to their primary products or services.
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OSFI preparing for mixed bag for remainder of the year
    The Office of the Superintendent of Financial Institutions is anticipating a mixed bag for the p&c industry as 2010 plays out.
    “Capital is strong, and has proven to be sufficient for the travails faced by the industry over the past few years,” assistant superintendent Mark White told the Property and Casualty Insurance Invitational Forum in Cambridge, Ont.
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Insurers expect to recoup costs with new HCAI system
    A more robust Health Claims for Auto Insurance system about to be relaunched in Ontario is the result of lessons learned from past problems.
    The claims processing system was initially launched three years ago and became mandatory for insurers in February 2008. But it suspended operations a month later due to a number of unanticipated problems including a data overload.
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Punitive damage case could set precedent
    An insurer in Nova Scotia has lost an appeal of a precedent-setting punitive damage decision.
    The Kings Mutual Insurance Co. appealed a jury’s award in a case involving a Shubenacadie barn damaged in 2003’s Hurricane Juan.
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Regulator official addresses profiling at U.S. risk summit
    It is not enough to give tacit approval to management in setting a risk profile as financial services become more and more complex and inter-connected, a Canadian federal regulator official said at a meeting last week in Massachusetts.
    Ted Price, the Office of the Superintendent of Financial Institutions’ assistant superintendent, supervision sector, said in prepared remarks for the Riskminds USA 2010 Risk Regulation Summit in Cambridge that the world will likely see more frequent shocks to the financial system.
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Bureau offers best practice guidelines
    The Insurance Bureau of Canada is releasing best practice guidelines for insurers and launching a web-based consumer education campaign aimed at improving the accuracy of the property valuation process for home insurance.
    “Accurate home valuation is a complex problem that has troubled the industry for some time,” bureau policy vp Barb Sulzenko-Laurie said.
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Injury cap 1: Changes could increase claim costs 17%
    The Insurance Bureau of Canada says the auto insurance changes announced by the Nova Scotia government will add to claims costs but the effect on premiums won’t be known until consumers and the insurers have had time to adapt to the new environment.
    As reported earlier in Thompson’s, the province has reformed its cap on pain and suffering awards for minor auto accident injuries with a new definition and an increase in the limit from $2,500 to $7,500.
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Injury cap 2: N.B. watching developments
    New Brunswick’s Justice Minister has said he wants to look at the facts before making any changes to the province’s limit for insurance payouts on minor injuries.
    Kelly Lamrock said he doesn’t want to do anything that could result in increased rates or availability problems but he will be keeping a close eye on what happens in Nova Scotia.
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Insurers defend valuable underwriting criteria
    State Farm Mutual Auto maintains there are a number of studies indicating a strong correlation between credit characteristics and the likelihood of future loss.
    The insurer said that in light of this it is open to working with the government of New Brunswick to develop language for its Bill 43 credit scoring legislation that results in the fairest solution for its customers there.
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Ontario auto reforms; Claim cost savings hinge on guidelines
    A number of the Ontario auto reforms have the potential to produce significant reductions in accident benefits claim costs, Baron Insurance Services principal Ron Miller writes in the latest edition of the MSA/Baron Outlook Report.
    But he said it is hard to say for sure until new minor injury guidelines for the reforms are released.
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N.S. reforms cap on awards for minor injuries
    Nova Scotia has decided to reform its cap on pain and suffering awards for minor auto accident injuries with a new definition and an increase for the limit from $2,500 to $7,500.
    The changes are now in effect.
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Bureau taking aim at regulatory burden
    An expanding regulatory burden is among the key issues for the industry identified by the president and ceo of the Insurance Bureau of Canada.
    At its annual meeting in Toronto, Don Forgeron noted the IBC asked PricewaterhouseCoopers to conduct a regulatory compliance survey of its members (Thompson’s , last week).
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Brokers welcome new credit card code
    The federal government is aiming to promote fair business practices in the debit and credit card industry with a new code of conduct.
    And this is good news as far as p&c brokers are concerned.
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Heavy tax burden outlined in report on p&c industry
    Canada’s p&c insurance industry bears a tax rate of 67% — among the highest rate measured around the world by PricewaterhouseCoopers.
    Insurers have protested the heavy burden for many years and now they have more compelling fuel for their case.
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Industry input sought on credit scoring
    New Brunswick is now looking for feedback from the insurance industry on its plans to do away with credit scoring as an underwriting tool for property policies.
    Superintendent of insurance Deborah McQuade has released a discussion paper on proposed legislation.
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E&Y studies strategies in UK
    The industry in the UK could save up to £1bn a year by developing an effective claims strategy and ensuring a robust execution of these plans.
    That’s according to new research from the UK’s Chartered Insurance Institute and Ernst & Young. It surveyed 36 senior claims leaders, collectively managing 78% of the UK’s £41bn claims expenditure, along with more than 700 members of the CII’s claims faculty. ...More

Flaherty clarifies financial services tax policy
    Federal Minister of Finance Jim Flaherty said the government has no intention of changing tax policy for financial service providers.
    In a statement late last month he said a recent Canada Revenue Agency notice was issued only to address uncertainty arising from certain court decisions.
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Report explores technological needs of brokers & agents
    Independent agents and brokers report significant differences
    between their technological needs and what carriers currently offer.
    A recent survey by Deep Customer Connections asked agents and
    brokers about p&c carrier technology.
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Mutual insurers teaming up on new task force
    Mutual insurance companies are teaming up on a task force to look at ways to better promote their advantages.
    At its annual meeting, the Ontario Mutual Insurance Association said it will take part in the Canadian Mutuality Task Force along with the Canadian Association of Mutual Insurance Companies and the Farm Mutual Reinsurance Plan.
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