Toronto Sun – Ontario auto insurance still a vexed issue

By ,Queen's Park Bureau

A year into its work and just a few months short of filing a final report, the province’s Auto Insurance Anti-Fraud Task Force is still struggling to define the extent of the problem.

“Estimating the amount of fraud has proven difficult,” a status report issued by the Task Force said, although it added the province saw a “startling and unexplained” spike in accident claims between 2006 and 2010.

Since then, the province has made significant changes to the auto insurance system – capping benefits and streamlining the process – but it’s not yet clear what impact that’s had.

“Comprehensive year-end statistics for 2011 are not yet publicly available, although early figures indicate a reduction in claims,” the report says. “However, a flood of requests for the mediation of claims of undetermined merit… has postponed a final determination of the effectiveness of these policy changes.

“Regardless of any reduction in costs that may result, there is nothing to suggest the changes will permanently reduce the appetite to make unwarranted or illegal claims.”

In light of that, the Task Force said it is considering further measures to combat fraud – including new rules for health clinics and tow-truck operators, new investigative powers for the Financial Services Commission of Ontario – which oversees the auto insurance industry – and a “consumer engagement and education strategy”, and wants to hear from the public about what might work.

“We are now asking you to focus your attention on public policies that would help reduce the extent of organized and premeditated fraud by making it more difficult to commit and hide,” the report says,

Despite the fact the Task Force said it was unable to pin down the scope of fraud in the system, the Insurance Bureau of Canada lauded the report for including estimates ranging from $770 million to $1.6 billion annual cost.

“These are important steps and we thank the government and other stakeholders who are working so hard to fight fraud,” IBC Vice-President (Ontario) Ralph Palumbo said in a news release.

“We all have a role to play in fighting the problem of fraud, raising awareness and lowering tolerance.”

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