Report says Ont. auto system broken

The Ontario auto insurance system is no longer fulfilling its goals in providing fair benefits, delivered fairly at a reasonable cost,  a new report by David Marshall says.
The former president and ceo of the Workplace Safety and Insurance Board started his work as Ontario’s auto insurance adviser in February 2016.
His report said the auto insurance system is flawed structurally and current trends do not indicate that it will self-correct.
“Claim costs continue to rise while auto accidents continue to fall,” Mr. Marshall said. “The main cause is not inefficiency or excess profits by insurance companies or the behaviour of claimants, providers or lawyers.
“It is the way the system is structured.”
Mr. Marshall suggests a five-part action plan to fix the system.
The first change he proposed is to establish a new “arms-length” regulator, which he said is already underway through the creation of the new Financial Service Regulatory Authority.
Second, the system of compensation for catastrophically injured accident victims needs to be substantially changed. He said substituting cash settlements for lifetime care needs to be looked into with the Ministry of Health and Long-Term Care.
Third, the system needs a “care not cash approach.”
He said accident victims need timely, appropriate medical care and not cash settlements. Care programs must be kept up-to-date, with new ones introduced where necessary, the report said. Funding should be set aside for research into the diagnosis and treatment of mental stress and other neurological injuries.
Mr. Marshall said independent examination centres should be established and advice from such centres should be taken as mandatory in accident benefits and tort disputes.
The fourth suggestion is to curb lawyers’ contingency fees and increase transparency.
The fifth suggestion relates to major innovation and competition changes, which he said would change face the auto insurance industry over the next 10 years. The regulatory burden under the current regime is “poorly suited to adapt to the future.”
“More open systems should be explored including changes to allow insurers to introduce new consumer products and to compete more freely on price and service in the marketplace.”
The Insurance Bureau of Canada welcomes the report and has already started reviewing its analyses and recommendations, Steve Kee, director of media relations at IBC, told Thompson’s.
“The bottom line from our perspective is that we are going to work with the government and want to ensure that the auto insurance system in place provides Ontario drivers with the best products and services at an affordable price,” Mr. Kee said.
“We will review it in depth and work with the government on this system to make it right for everyone.”
Mr. Kee said the IBC was among the many groups and organizations Mr. Marshall spoke with in researching and writing the report.
Ontario’s Finance Minister Charles Sousa said the government has implemented changes over the last few years to reduce auto insurance costs and to reduce average premiums, but more change is needed.
“We know that to achieve more savings for drivers and to address fraud, we need to transform the current system,” Mr. Sousa said.
Scott Blodgett, a spokesman at the Ministry of Finance, told Thompson’s the government would consult on the recommendations and announce details of those consultations in the coming weeks.