A STANDARD treatment plan and a new fraud office are part of a package of reforms introduced by the Ontario government to fix the province’s troubled auto insurance system.
The Liberal government’s ‘Fair Auto Insurance Plan’ stems from recommendations made by David Marshall, Ontario’s adviser on auto insurance, in a 103-page report released in April.
It found the system to be structurally flawed and called for transformative changes aimed at improving the care received by people hurt in collisions, reducing disputes around diagnosis and treatment, promoting innovation and competition and other steps to improve consumer protection.
The new package includes seven initiatives to make the system more efficient and affordable for Ontarians:
■ It will create a standard treatment plan to ensure people with the most common collision injuries receive timely, appropriate and effective treatment focusing on recovery and monitoring health outcomes, and to increase awareness of best practices to make sure auto accident victims receive appropriate care.
■ A serious fraud office will be created to combat systemic auto insurance fraud.
■ Independent examination centres will be established to provide expert assessment of more serious auto accident injuries and to reduce diagnosis disputes.
■ The Finance Ministry has directed the Financial Services Commission of Ontario to review risk factors used to calculate insurance premiums.
■ The Law Society of Upper Canada has approved four changes that will support clients entering into contingency fee arrangements.
■ The Financial Services Regulatory Authority will be established and the auto insurance rate approval process will be modernized through FSRA’s rule-making authority to quickly respond to market trends, and
■ The Finance Ministry will establish a panel of experts to provide the government with guidance in enacting the reforms, including insurers, health service providers, legal service providers and drivers.
The Insurance Bureau of Canada welcomed the proposal to establish a new office to combat auto insurance fraud.
The SFO would include representatives from the Ontario Provincial Police and the Ministry of the Attorney General.
Steve Kee, director of media and digital communications at the IBC, told Thompson’s the bureau has been waiting for a dedicated fraud office since it was announced in the province’s 2016 budget.
“A lot of work has been done with law enforcement and the insurance industry and there have been some high profile cases,” he said.
“But we know that auto insurance is expensive and responsible drivers want a break, because when fraud occurs it affects everybody.”
In announcing the reform plan last week, the Ministry of Finance noted that since 2013 auto insurance premiums have been reduced by 6.6% on average as a result of auto insurance reforms.
Mr. Kee said that at one point premiums had been reduced by 10% on average and the Ministry of Finance’s numbers could be an indication that past reforms haven’t been effective in reducing rates and keeping them down.
“The industry agrees that the auto insurance system needs an overhaul and we agree with these comprehensive changes,” he said.
“There are ten million drivers in Ontario and the current auto insurance product isn’t working.”
Aviva Canada ceo Greg Somerville welcomed the Ontario government’s decision to place treatment and care — and not cash — at the heart of the recovery process.
“Because genuinely injured claimants have one primary aim, which is to return their health and life back to normal.”
He said Aviva also welcomes the commitment to establish a serious fraud office in the spring of 2018.
“We estimate that auto insurance fraud costs Canadians up to $2bn every year and, sadly, it is the vast majority of honest drivers who are paying for the fraudulent minority through high insurance premiums.
“The cost of auto insurance has nowhere to go but up if we fail to address the excessive numbers of injury claims in Ontario and the escalating costs surrounding them.”
The Insurance Brokers Association of Ontario continued to urge the government to move cautiously with its seven-part plan.
The association said it is largely supportive of the recommendations and a number of changes it has advocated are reflected in the Ministry of Finance’s plan. But it said that before the plan moves forward it is important to remain cautious with regard to the proposed risk factor review and the transition to a new regulator, the Financial Services Regulatory Authority.
The IBAO said it supports the need for a nimble and modern regulator, able to adapt to consumer needs, but it is concerned about expedient changes made without properly controlling outcomes.
“Insurance brokers, who represent over six million policyholders in Ontario, encourage stabilizing auto insurance rates so they can provide affordable coverage that’s balanced with the necessary benefits and consumer protections,” IBAO ceo Colin Simpson said.
“We look forward to working with the government throughout the implementation of these reforms.”
(More coverage of the proposed reforms was presented in Thompson’s Dec. 11 weekly edition. To request a copy or to subscribe, please choose the ‘Subscribe’ tab on our main page for more information or email email@example.com)