THE ONTARIO government has pledged in its latest budget to speed up regulatory work for the rapidly expanding sharing economy.
And the Insurance Bureau of Canada says this should enable new insurance products for ride-sharing services to be approved faster, possibly with interim approvals.
“When the government said it is exploring new products and how to quickly approve them, you could almost hear the logs moving out of the jam,” IBC Ontario vp Kim Donaldson said.
The government acknowledged that the sharing economy is going to become much, much bigger and said it will work with the Financial Services Commission of Ontario to find a flexible insurance regulatory system in order to approve new insurance products more quickly — not only to provide consumers with more coverage but also to foster innovation.
“Adapting Ontario’s economy to accommodate new business models requires careful consideration and consultations with key stakeholders,” the finance ministry said in the budget document.
“In the coming months, the province will launch a more targeted consultation to help determine the best approach for Ontario, including exploring ways to further enable home- sharing and allow greater flexibility for ride-sharing.”
FSCO’s senior communications officer Malon Edwards told Thompson’s that the regulator has had some preliminary discussions with insurers and industry associations about possible ride-sharing insurance products.
Meanwhile, the latest budget also introduced amendments to the Insurance Act to require insurers to provide claims and repair history on a vehicle.
And it also includes a plan to establish a ‘serious fraud office’ with a special focus on auto insurance fraud.
“Our belief is that there is $1.6bn in fraud in the system at least,” Ms. Donaldson said.
“This is the third time that the government has announced (that it wants to tackle fraud) and we would very much look forward to working with them in a robust fashion.
“We will not be shy by saying, in the most respectful way, we’ve heard this before and look forward to helping,” Ms. Donaldson said.
“The government knows we have sophisticated analytics tools and the industry has been extremely active in pursuing fraud where we can. But some sort of co-ordinated effort involving the government would send a much stronger signal and we are ready and willing to serve — we just want to know how.”
She stressed that eliminating fraud from the system would go a long way toward the goal of lowering auto insurance premiums.
“That’s just a reasonable thing to do and it’s actually a fairly low-cost way for government to provide pocketbook relief.”
A proposal in the Ontario budget to require insurers to provide claims and repair information for used cars to motor vehicle dealers is part of the government’s emphasis on consumer protection.
Randy Bundus, senior vp, legal and general counsel and special projects at the Insurance Bureau of Canada, said that the Insurance Act amendment is needed to reflect law changes made six years ago regarding used car dealers.
“There was a change in the law that required them to inform potential buyers if the vehicle had previously been involved in a collision where the repair cost was in excess of a certain amount,” Mr. Bundus said.
“That left used car dealers in a spot because how could they know if a car had been repaired and for what amount?”
Mr. Bundus said that the Office of the Superintendent of Financial Institutions currently collects that information and he anticipates that the amendment will enable the regulator to release it to used car dealers.
“At present, it’s questionable whether (OSFI) has the authority (to release the information).”
The amendment, he said, will clarify that, finish off a government policy that was set six years ago and make sure it can be properly enforced.
Highlighting other measures to protect consumers and claimants, the Ontario government noted that it has developed a new auto insurance dispute resolution system that will help drivers get faster access to benefits.
As reported in Thompson’s, the Ministry of the Attorney General’s Licence Appeal Tribunal will begin accepting dispute applications on April 1.
“Measures to protect consumers, by prohibiting rate increases for minor at-fault accidents and lowering the maximum interest rate for monthly premium payment plans, will also become effective on June 1, 2016,” the government said in the budget.