Toronto Sun – Ontario Auto Insurance Anti-Fraud Task Force findings mildly surprising

By Alan Shanoff ,Toronto Sun
Thursday, November 22, 2012

TORONTO – The final report by the Ontario Auto Insurance Anti-Fraud Task Force was released Thursday and I have to say I’m mildly surprised by the recommendations.

While the Task Force has focused on reduction of insurance fraud, they have also made some consumer oriented recommendations to curtail insurers’ abuses. Rather than denying claims or portions of claims with little or no reasons, it’s recommended insurers be required to provide “a full explanation when refusing to pay for treatment, assessment or other benefits.”

It’s also recommended that the government reduce uncertainty and delay for legitimate claimants by addressing the huge backlog of mediations and introducing appropriate protocols for treatment of minor injuries.

Unfortunately the consumer-oriented suggestions fail to combat perhaps the worst insurer impropriety: the use of so-called independent medical examiners or experts who provide insurer-friendly reports used to deny legitimate claims.

The report mentions that independent examinations are “often regarded with suspicion” — a gross understatement — but there are limited recommendations aimed at curbing abuses. True, it’s recommended a process be established for reviewing complaints, but there’s nothing to stop insurers from continuing to send lucrative work to preferred examiners who know what they should do to retain the insurer’s business.

There’s no recommendation in favour of licensing and regulating the medical assessment firms that provide independent medical examinations or evaluations. But the report does mention the sad fact that in 2010 the cost of medical examinations and assessments was $187 per insured vehicle, not far off the $221 incurred as the cost of medical and therapeutic treatments per insured vehicle. Amazingly, in 2010 insurers were paying almost as much to assess injuries as they were treating them. That is something deserving of investigation.

The focus of the report, of course, is on how to detect and prevent fraud committed against insurers by every possible miscreant: claimants, rehabilitation clinics, tow truck operators, body shops, paralegals, lawyers, even physicians.

Implementation of some of the recommendations can’t come soon enough, including the regulation and licensing of health clinics and the towing industry.

Other recommendations concerning the ability of insurers to pool and analyze claims data may make it easier to detect fraud are welcome.
The report emphasizes that its recommendations are targeted at reducing fraudulent behaviour rather than disadvantaging legitimate claimants. That’s a good principle to follow especially since the previous efforts to target fraud consisted of reducing accident benefits to the point that most Ontario accident victims have the worst no fault accident benefits in the country.

As the Ontario Trial Lawyers Association has pointed out “fighting insurance fraud by broadly cutting coverage makes a mockery out of insurance as ‘promise to pay’ in the event of a loss.”

But the recommendation that claimants who fail to appear at a scheduled medical examination without reasonable notice or explanation be charged a cancellation fee of $500 is punitive and will do little to combat fraud.

The report is to be applauded for the most part, but there’s much work to be done, both to combat fraud and protect the rights of legitimate accident victims.

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