Catastrophic Impairment Designation Clarified

Lawyers Weekly April 26, 2013

http://www.lawyersweekly-digital.com/lawyersweekly/3248/?folio=12#pg13

“Every excuse in the book”: When insurance companies don’t pay up

Garry Marr , Financial Post, 13/04/13  Last Updated: 13/04/12 2:12 PM

You buy a life insurance policy and say you don’t smoke even though you have the occ

It’s the fear every consumer has buying insurance. When it comes time to make a claim, your insurer will have some reason not to pay out.

Garry Marr: In Canada, the dependence on this expensive source of credit is a closely guarded secret

The doomsday scenario isn’t just fantasy, it’s reality, say many people who fight insurance companies on a regular basis.

The issue was highlighted this week when a Saskatchewan judge awarded Luciano Branco $5-million, saying the actions of his insurance companies established “a pattern of abuse” — Justice Murray Acton noting he wanted to send a message to the industry.

The case could be a template for anyone paranoid about getting his or her claim cashed out.

The claimant in this case was a welder who was injured on the job. The judge noted the man, who suffered a permanent disability, was offered a “ridiculously low” settlement as the insurance companies dragged its feet for years on the claim.

You have a flooded home and they won’t cover. I have someone [who gets sick] in New York with travel insurance and they won’t cover

While cases like this may not be the norm, Toronto lawyer Sivan Tumarkin has built a legal practice around getting insurance companies to pay up.

“I’m just getting more and more of these,” said Mr. Tumarkin, who used to work for insurance companies in a defence capacity. “I only started doing this because I had people coming to me who were having issues with insurance companies. You have a flooded home and they won’t cover. I have someone [who gets sick] in New York with travel insurance and they won’t cover.”

He says the insurance companies don’t out and out reject claims for no reason but their objections are in many cases for negligible reasons.

Mr. Tumarkin had an older couple as clients recently who put in a health claim for a fracture suffered by the wife while on vacation in the U.S. The claim was paid but the insurance company when back into their medical records and found out some of the information filled out in the application was incorrect and demanded $30,000 back.

The basis of many insurance claim rejections is something on a policy being filled out incorrectly, either on purpose or because of a misunderstanding.

You buy a life insurance policy and say you don’t smoke even though you have the occasional butt at a bar. One day you get killed in a car accident. If your insurer finds out about your occasional indulgence, there’s a good chance they’ll fight the claim.

“The law is you have to answer truthfully but it is ambiguous about the way you might answer the question as a lay person,” says Mr. Tumarkin. “They’ll look at absolutely everything they can to try and not cover you. I’m not saying in every case but a lot of them.”

He says insurance companies in property damage claims on car accidents will drag their feet on an investigation, knowing there is time limit to sue.

Out and out rejection of claims to meet some quota is probably more something you see in movies, says Mr. Tumarkin. “There is willful blindness on the part of adjusters,” he says. “There is never absolutely no reason they don’t pay. They’ll just use every excuse in the book.”

Pete Karageorgos, manager of consumer and industry relations with the Insurance Bureau of Canada which represents home and auto insurers, says there are no statistics on what percentage of claims get rejected.

But on the auto front, the industry has statistics that show in Ontario in 2010, the sector took in $9.4-billion in premiums and paid out $8.3-billion.

“It goes to show you the majority of money coming in goes right back out to pay claims,” said Mr. Karageorgos.

He adds insurance is a contract and any insurance adjuster will look at the conditions that could negate the agreement.

“Insurance companies are not just going to take your word for it,” said Mr. Karageorgos. “For any contract to be valid and effective, the conditions on both parties parts need to be satisfied.”

The issue for many people in hiring a lawyer is the up front cost. In the Saskatchewan case, the welder who sued his insurance companies had to be bailed out financial by family members.

There is willful blindness on the part of adjusters

One thing you can work out in some cases is an agreement whereby your legal bill is covered based on a contingency fee basis, your lawyer gets his bill paid from the winnings.

You can also consider taking your insurance company to Small Claims Court.

Another suggestion for consumers is buy insurance products from a broker, who is compensated by the insurance company but not employed by them. By using the broker, you have the added possibility of suing the broker if he or she gave you bad information when filling out your policy.

Some policies get reviewed by insurance companies before they are issued and people are rejected or assessed at a higher rate, such as in life insurance. But for low margin products like travel insurance, there is no investigation until a claim is submitted.

“You have the policy underwritten at the time of application not at the time of claim, so there is no surprises and it is completely on the up and up,” said certified financial planner Mark Halpern, of illnessprotection.com.

Sometimes he’ll get a client who wants to say he doesn’t smoke when he does occasionally and Mr. Halpern rejects that business because he doesn’t want to see the claim eventually dismissed.

In other cases, people make innocent mistakes about the type of medication or the maladies they have had in the past.

“It’s really important you keep a record of your medical history,” said Mr. Halpern.

He doesn’t dismiss the notion that insurance companies will reject claims for flimsy reasons and says a broker can be an important advocate on your behalf in that situation.

“If that doesn’t work, there is always [a lawyer],” said Mr. Halpern, noting in many cases the presence of lawyer leads to some type of settlement.

“The insurance don’t like to have bad press but they don’t want these things lingering if there is something [that could work against them]. In the worst case, you might get some settlement,” he says.

Alex Saltykov, founder of InsureEye Inc. which follows the industry, says there are no statistics to show what percentage of claims are paid out.

He says consumers really have to make sure they know what is covered and not because insurance policy are so complicated.

Mr. Saltykov found himself not completely covered for treatment he needed for physiotherapy because he had not read the terms of his insurance contract.

“You want it to be there in the worst moment of your life,” said Mr. Saltykov. “If you are not sure of what should be disclosed, you better disclose it even it makes your insurance go up. Otherwise you risk your company not paying.”

Doctors’ association accused of using aggressive “scorched earth” approach to defending malpractice suits

Tom Blackwell , National Post, 13/04/12 Last Updated: 13/04/13 10:59 AM

Susan Ryan didn’t exactly have dollar signs dancing in her eyes when she sued her doctor for malpractice: the Toronto woman filed the case in small-claims court.

She thought it was a less-formal venue that favoured “the little guy;” her opponent had other things in mind. The defence lawyer has fought the suit doggedly, making two pre-trial motions, filing thick binders of material and commissioning reports from a pair of expert witnesses, in answer to her charge that the MD failed to diagnose severe arthritis for eight painful years.

Ms. Ryan, the administrator of a small children’s charity, managed last month to fend off a defence bid to have the suit thrown out of court, but any resolution remains far off.

Susan Ryan

“I hoped they might settle,” she said. “[But] they said explicitly they have no intention of ever settling.”

Ms. Ryan has come face-to-face with a power that virtually every Canadian plaintiff in a malpractice suit encounters, often with sobering results. Like most physicians, the doctor she is suing is represented by the Canadian Medical Protective Association (CMPA), a little-known, non-profit organization with vast funds at its disposal to defend health professionals accused of negligence.

And much of the liability premiums that have helped build up a $2.7-billion war chest come courtesy of Canadian taxpayers, with all but one province subsidizing to varying degrees the fees paid by the group’s members.

Thanks to that financial might and a laser-like focus on members’ interests, malpractice lawyers charge, the association battles most cases unrelentingly, producing what one Ontario judge called a ‘‘scorched–earth’’ approach.

While private, for-profit insurance companies behind other types of civil-law defendants (and doctors in countries like the U.S.) will settle out of court to save the cost of protracted litigation, CMPA-funded legal teams make no such calculation, plaintiff lawyers say.

“If they have a $50,000 claim, they can and will spend $250,000 to defend it,” said John McKiggan, a Halifax malpractice lawyer.

“They’re prepared to leave no stone unturned and to fight these cases to the bitter end,” said Sloan Mandel, a Toronto lawyer. “They really are David-and-Goliath-type battles.”

Over-inflated charges for assistive devices costing insurance industry

DAILY NEWS Apr 12, 2013 2:35 PM

By: Laura Kupcis, Editor, Claims Canada

2013-04-12

 Implementing standing pricing for assistive devices could save the insurance industry a substantial amount of money, suggests Constable Glen Morash of the Major Fraud Bureau with Peel Regional Police. 

Morash was speaking at ISB Canada’s ISB-U Education Series event, in Milton, Ont. Thursday. 

While investing MVA clinics during a fraud investigation, he said he noticed that a number of patients were receiving household assistive devices paid for by the insurance companies. The devices were all standard items that claims adjusters see regularly, including lightweight vacuums, shoehorns, ergo dynamic devices.

However, when Morash looked into it further, he found that clinics were charging insurers $149 for a light weight vacuum, which in reality was a Swiffer that retails for $34.99. To boot, the clinics would be getting the “vacuum” at a wholesale cost, making the profit even higher for them.

Long shoe horns were being billed at $29.99, with a  wholesale cost of $2.99, hot and cold packs were being billed for $20, when they cost $1.99 retail, and so forth.

“You do that over 60 patients in one clinic in a six month period and it becomes a large dollar fraud,” he said. “But I can’t even really call it fraud because it is accepted by the industry.”

“If the clinic is willing to charge you that and you are willing to pay it, then it is your loss,” Morash said. “We can’t even charge them with fraud for that, unless they come out and tell you it’s something else.”

The description of the product in question is so vague that there was nothing the fraud department could do. “It is all just pure profit for the clinic at a cost to you guys,” he said.

The industry is not looking into these charges because they fall under the threshold of care for the industry — and they are small ticket items that appear once per claimant. The concern is higher price point items, which are claimed frequently over a number of visits over a longer period. “When you start adding it up over and over again, it is a lot of money to them, when it could be a savings to you guys,” Morash said. 

He suggested that the industry should implement a standard pricing on these devices to help save costs

Ontario’s auto insurers are operating with modest profit margins – between 4 and 5.5 per cent last year – say two audits commissioned by the industry to be released Friday

Globe and Mail-by Adrian Morrow

The reports, by KPMG and J.S. Cheng, are a stark warning to the government as it considers an NDP demand to slash premiums by 15 per cent in one year. The New Democrats maintain increases in profit over the last two years have given the industry ample room to make the cut. But the Insurance Bureau of Canada, which commissioned the audits, argues bringing rates down that far, that fast would eat up the margin.By KPMG’s estimate, the industry lost $1.2-billion in 2010 before posting profit of $128-million in 2011 and $417-million in 2012, which translates to 4 per cent in the final year. J.S. Cheng had a slightly rosier view, showing a profit of $629-million, or 5.5 per cent, in 2012, up from $264-million the previous year and a loss of a little over $1-billion in 2010.

Margins are narrower when only private-passenger vehicles are factored in, with KPMG showing a profit of $294-million last year and J.S. Cheng showing $492-million.

The reports used different data sets and methodologies, hence the discrepency between their numbers.

“If you take the 15-per-cent cut to premiums, holus bolus … what’s going to happen is you’re going to wipe out that profit,” said Ralph Palumbo, IBC vice-president Ontario. He acknowledged government reforms in 2010 have boosted profit, but said the added cash is not as much as the NDP seems to think. “There are other factors at play here – [companies] haven’t put that money in their pockets.”

Such a change could push some insurers to quit the province while others would cope by cutting back policies, said IBC’s Ontario policy director Barb Taylor.

“It would be harder for some people to get insurance. Insurance companies aren’t going to want to write risks where they’re not going to get back any kind of return,” she said. “There’s definitely a potential for a solvency concern here as well – we don’t want companies going under or leaving the market.”

The minority Liberals, who need NDP support to pass a budget this spring, would rather reduce premiums by cracking down on fraud in hopes the money saved by the industry would then be passed to consumers.

“[Finance] Minister [Charles] Sousa has been very clear that this is an issue – the factors that drive auto-insurance rates up are a challenge that needs to be addressed. The government is looking at what the best approach is to address rates and bring relief to Ontario car owners,” Mr. Sousa’s spokeswoman said Thursday.

The IBC supports this approach, and has called on the government to also tackle the backlog in unresolved disputes between companies and claimants.

But this is not enough for the NDP, which wants the government to dictate a 15-per-cent cut. “What the people of Ontario deserve is a real commitment and real action,” Leader Andrea Horwath said last month.

Insurance Tactics: Deny, delay and pay up?

Wednesday, April 10, 2013

Earlier this week, a Canadian judge awarded Luciano Branco nearly 5 million dollars in damages, the largest insurance settlement ever handed out by a Canadian court. In his decision, Justice Murray Acton said he hoped the ruling would “gain the attention of the insurance industry” and added that “the industry must recognize the destruction and devastation that their actions cause.”

 Lawyer who represents Luciano Branco, Alex Kotkas

On Christmas Day in 1999, Luciana Branco's father was working a 12-hour shift as a welder in Kyrgyzstan when he accidentally dropped a steel plate on his foot. Even though he first thought he might have cut off his toes, Luciano Branco packed his wounded foot in snow and finished his shift.

Three months later, he was injured again and doctors ruled that he was permanently disabled. Luciano Branco is Canadian and he had work benefits through two insurance companies — AIG and Zurich. But both companies resisted paying him those benefits and he was left in dire straights.

Luciano Branco eventually took AIG and Zurich to court.

Earlier this week, a Canadian judge awarded him nearly 5-million-dollars in damages, the largest insurance settlement ever handed out by a Canadian court. Mr. Justice Murray Acton called the companies “calculated,” “abhorrent,” and “reprehensible.” He said they repeatedly, and in his words “maliciously” tried to thwart Mr. Branco's claim.

And Justice Acton didn't stop there. In his decision, he said he hoped the ruling would “gain the attention of the insurance industry” … and added that “the industry must recognize the destruction and devastation that their actions cause.”

Alex Kotkas is the lawyer who represented Luciano Branco. He was in Calgary this morning.

We requested an interview with AIG and Zurich. No one was available. We did however speak to with Frank Swedlove, the president of the Canadian Life and Health Insurance Association. Here is a transcript of the clip we aired:

Well its always very hard to draw any conclusions about broad industry behaviour from one or two cases and again I won't comment on the specific details of this case. But there are so many cases where the life and health insurance industry provides security to Canadians when they need it the most. We pay out over 1.2 billion dollars a week in claims to Canadians. The vast majority of claims are paid without any question whatsover. In some claims particularly in disability cases they tend to be more complicated and sometimes the review process needs to make sure everything is appropriate. But even in the case of disability claims we pay out over 6.2 billions dollars a year in disability claims.

Author of Delay, Deny, Defend, Jay M. Feinman

Joanne Doroshow is the co-founder of Americans for Insurance Reform and she says Luciano Branco's case is just one example of a larger problem that's present across Canada and the United States. We aired a clip.

Jay Feinman is a professor of law at Rutgers University and the author of Delay, Deny, Defend: Why Insurance Companies Don't Pay Claims and What You Can Do About It. He was in Camden, New Jersey.

This segment was produced by The Current's Dawna Dingwall, Josh Bloch and Shannon Higgins.

When insurance companies abuse claimants, they should pay

The Globe and Mail

Published Tuesday, Apr. 09 2013, 8:54 AM EDT

A Saskatchewan judge has sent a sharp and justified rebuke to insurance companies that refuse to pay for legitimate claims or make the claimant’s life unnecessarily difficult. The $4.95-million award, which includes $4.5-million in punitive damages, should make it clear that Canadian courts will not tolerate what the judge referred to in his ruling as “protracted and reprehensible behaviour.”

Luciano Branco was a Canadian welder working for a Saskatchewan-based company in Kyrgyzstan in 1999 when a heavy steel plate fell on his foot. He finished his shift, but the injury became aggravated and he soon found he couldn’t work. Doctors eventually told him the injury was untreatable and permanent. In 2000, two insurance companies got involved. A year later, after being offered unsatisfactory compensation, Mr. Branco filed a lawsuit against both companies, Zurich Life Insurance and American Home Assurance Company (AIG). It would take another 12 years for Mr. Branco to see any money.

According to the judgment, one company, Zurich, “blatantly” refused to hand over “what had been owed in monthly payments for almost eight years.” The other company, AIG, used delaying tactics the judge described as “malicious” in order to “leverage a reduced settlement.” Both companies hoped, the judge said, that Mr. Branco’s dire financial straits, brought on by his inability to work, would prompt him to drop his lawsuit and settle for lesser amounts.

“The actions of AIG and Zurich establish a pattern of abuse of an individual suffering from financial and emotional vulnerability,” Justice Murray Acton wrote in his decision.

“The fact that Branco was able to continue to withstand this pressure for so many years on two different fronts is truly remarkable and almost superhuman,” the judge also wrote.

Insurance companies in Canada spend millions investigating insurance fraud – investigations that often result in criminal charges. But the onus to deal honestly and fairly lies on both the insurer and the insured. Mr. Branco is a hard-working, proud man who suffered a legitimate job-related injury and met all the requirements for collecting disability insurance payments. But instead of honouring their end of the bargain, Zurich and AIG used their financial muscle to abuse, in what a judge called a “calculated and abhorrent” manner, an honest claimant. Mr. Justice Acton’s ruling, both in its wording and the punitive damages it awards, was calculated to send insurance companies a warning. They should listen carefully.

Judge sends warning to insurers with $4.5-million award to disabled welder

KIRK MAKIN

The Globe and Mail

Published Monday, Apr. 08 2013, 8:32 PM ED

Luciano Branco’s work ethic was so entrenched that, after severely injuring his toes on a frigid mine site, he washed away the blood, packed his foot with snow and finished his shift.

When surgery later failed to restore his mobility and the insurers covering Mr. Branco’s workers’ compensation and long-term disability refused to provide him with full benefits, the welder, now 62, embarked on 10-year legal odyssey.

Expressing the hope that the award will put a chill into the insurance industry, Saskatchewan Court of Queen’s Bench Justice Murray Acton ordered Zurich Life Insurance to pay $3-million. He ordered American Home Assurance to pay Mr. Branco $1.5-million.

The highest previous punitive damage award was $1-million, granted to an Ontario couple – Keith and Daphne Whiten – who were treated cavalierly by Pilot Insurance Co. after their home burned down.

“Although Canadian courts believed that the $1-million in the Whiten case would catch the attention of the insurance industry and the court’s disapproval of such actions, it is apparent that $1-million was not sufficient,” Justice Acton observed.

He said the insurers went to great lengths to thwart the plaintiff’s legitimate claims and compel him to accept low settlement offers.

“The fact that Branco was able to continue to withstand this pressure for so many years on two different fronts is truly remarkable and almost superhuman, even though his resistance may have resulted in irreparable mental distress which may last for the remainder of his lifetime,” the judge said.

Mr. Branco was injured on Dec. 25, 1999, while working high in the mountains of Kyrgyzstan for Kumptor Operating Company, a subsidiary of Cameco Corp.

Gulu Punia, a lawyer with Fasken Martineau LLP, which represented Mr. Branco, said his client had spent his life toiling on isolated, dangerous job sites without ever taking a sick day.

“This was not a guy who you could ever claim was a malingerer, yet the insurance companies fought this like crazy,” Mr. Punia said.

After his accident, Mr. Branco completed a 28-day stint in Kyrgyzstan before joining his mother at her home in Portugal. His pain worsened and was not relieved by surgery. Doctors predicted he would never recover.

Over the next few years, Judge Acton said, the insurers made various demands that he undertake retraining or vocational rehabilitation, sometimes in far-off locations and for dubious work skills.

His family – a wife and two children – became destitute and survived on loans from relatives. His marriage almost came apart.

“This total lack of income caused severe mental stress upon Branco, disabling him further,” Justice Acton said. “Branco was shamed that he was unable to support himself and his family, which went to the root of his personal self-worth and integrity.”

Insurer to pay $200K in punitive damages

Monday, 08 April 2013 07:00 Written by Yamri Taddese

 In a warning about the use of surveillance evidence, an Ontario Superior Court judge has awarded $300,000 in punitive and aggravated damages against an insurance company found to have demonstrated bad faith towards a long-term disability applicant.

 In a March 22 decision, Justice P.B. Hambly ruled in favour of a Kitchener, Ont., man caught on surveillance video doing work his insurer said was sufficient to prove he didn’t qualify for total disability benefits. The judge also slapped the insurer, Penncorp Life Insurance Co., with more than $500,000 in aggravated, punitive, and contractual damages.

 The plaintiff, Avelino Fernandes, had suffered injuries to his lower back after repeated falls during his work as a bricklayer. He received monthly disability payments from Penncorp for two years following his claim. In 2006, the insurer stopped making payments to Fernandes as it required him to have a total disability in order to receive payments for more than two years.

 If a person can’t work in any suitable occupation for more than two years, the law considers them to have a total disability. When Fernandes started an action against Penncorp for refusing payment, the insurer argued he could in fact take other jobs. The company used dozens of hours of surveillance evidence that showed Fernandes doing manual work to back up its case that he was fit to work.

 “Avelino was observed in the surveillance on August 3, 2005, to lift a wheelbarrow and a wooden skid in and out of a truck on a single occasion,” wrote Hambly in Fernandes v. Penncorp. “He was also observed to shovel some dirt. This does not remotely establish that he was able to do the heavy continuous labour for long hours for six to seven days per week that he was doing in his bricklaying occupation, before he was injured.”

 Hambly continued: “Avelino is captured on video working for short periods of time at light work. He is never observed working at anything like the heavy demands of bricklaying. He explained that he was in pain while he was doing this work. He was in pain at night. He took extra painkillers.”

 Penncorp presented more than 140 hours of surveillance evidence, an unusual amount for cases like this, according to lawyer David Share of Share Lawyers in Toronto.

 “I think the message to the insurance industry is . . . don’t fall in love with your own surveillance,” he says. “At the end of the day, when it comes to surveillance, unless the surveillance is completely and flatly inconsistent with what the complainant says they can and cannot do, the surveillance has limited usefulness.”

 Once an injury makes it impossible for someone to continue working at one type of job, the legal principle is the person shouldn’t have to take another position that pays significantly less or is entirely different from the previous employment.

 A vocational expert who assessed Fernandes’ skills found his ability to read and understand English was poor. The expert found jobs in the market supervising bricklayers he could do without having to perform the work himself. But such jobs required the ability to read a blueprint, something the judge found Fernandes wouldn’t be able to do given his limited English skills.

 The judge also pointed out the emotional impact of income loss on Fernandes, who reported feeling ashamed that he couldn’t support himself and his wife Tracy due to his inability to work. “He came from a culture where the man provides,” wrote Hambly.

 “Now that he does not have money, he is dependent on Tracy’s income. He is embarrassed in his relationship with Tracy.” Fernandes “loved to work,” wrote Hambly.

 “His not being able to work is very stressful for him. He is greatly embarrassed by his inability to generate income and hence his dependence on Tracy. In my view, if Avelino was able to work, he would be doing so.”

 The judge seemed to like Fernandes, says insurance lawyer Joan Takahashi, a fact she calls a “real danger” for Penncorp. Takahashi, who practises at Gilbertson Davis Emerson LLP, notes the judge was harsh when it came to the punitive damages award of $200,000 against Penncorp.

 “If Justice Humbly was correct in awarding punitive damages, I found the amount is too high for this behaviour,” she says, adding the insurer’s mistakes don’t exactly establish malice. Once an insurance claim supervisor herself, Takahashi says the job isn’t an easy one.

 Other cases have established that insurance companies can make poor judgments as long as they don’t have a malicious intent, she says, noting there were no punitive damages awarded in previous similar cases.

 But Hambly’s decision, Takahashi adds, “has raised the standard which insurance companies must meet in order to avoid a punitive damages cost.” The judge felt the insurer ignored the details of Fernandes’ job, relied too heavily on surveillance evidence, and failed to provide compelling expert opinion suggesting the 48-year-old plaintiff could in fact do bricklaying work, says Takahashi.

 Lawyer Allan Rouben, who represents insurance claimants, agrees the judge was notably unhappy with Penncorp’s conduct.

 “Clearly, this judge was not happy with the manner in which Penncorp handled this claim and seemed to be giving the plaintiff every benefit of the doubt,” he says.

“When it comes to surveillance that’s not completely inconsistent, you’re left to judge it on the basis of the credibility of the claimant and here the judge found that Mr. Fernandes explained himself in a credible manner.”

 Hambly’s decision is a reaffirmation that disability claims involve an individualized process, says Rouben, noting a one-size-fits-all formula doesn’t work.

Insurance premium shell game

Insurers in bed with Liberals and have little to fear from Kathleen Wynne’s government

BY ALAN SHANOFF ,TORONTO SUN

FIRST POSTED: SATURDAY, APRIL 06, 2013 06:32 PM EDT

Imagine owning a business and being told the government was about to force you to cut your prices by a whopping 15%.

You’d be furious. You’d be mounting a campaign to stop this outrageous action. But what’s that silence I hear coming from Ontario’s auto insurers?

Why are there no angry words attacking the Ontario government’s assault on the industry’s bottom line?

Could it be that the insurers have always been one step ahead of the government and the public and have already taken into account a potential forced premium reduction by greedily increasing premiums the past three years? Without any accidents, tickets or having moved, my insurer raised my premium 21% this year. Could it be that insurers have increased their bottom lines, since no fault accident benefits were gutted in 2010, by some $2 billion in savings, and can easily undertake a premium reduction?

According to the Ontario Trial Lawyers Association, profit figures recently released by auto insurers show dramatic increases in 2012 profits over already high 2011 profits: Intact 26%, Co-operators 71%, Economical 68% and EGI 159%.

Could it be that a premium reduction might eliminate the talk of instituting public auto insurance in Ontario to join the four other provinces that have such insurance? It’s been a long time since an Ontario government considered government owned and operated auto insurance but people are beginning to question why we can’t enjoy the benefits of public auto insurance in Ontario. It would be a fitting tribute to Peter Kormos if the NDP were to once again push for government owned auto insurance.

Or is it possible that the insurers know that if they are forced to reduce premiums there will be a quid pro quo in terms of handing the industry further “reforms” intended to reduce benefit payments to accident victims?

Industry watchers know the industry is pushing “reforms” to reduce the number of victims who qualify for enhanced catastrophic impairment benefits. Currently about 1% of accident victims (or about 600 per year) qualify for catastrophic injury benefits but the industry wants to reduce that number by restricting the definition of catastrophic impairment. Relying on a report from a flawed expert panel (the majority of which weren’t experts in catastrophic impairment) the industry says it wants to “clarify the definition of catastrophic injury based on medical science,” but it seems what they really want to do is reduce the number of injured people who qualify, thereby placing additional financial burdens on the injured or on our publicly funded health care system.

Is it possible that a premium reduction will remove pressure from insurers to clean up their oft criticized claims handling procedures including the frequent use of biased “independent” medical examiners to produce flawed reports to justify denial of benefits?

These denials of benefits have led to lengthy waiting periods for mediations and arbitrations which have in turn been used by the insurance industry to argue that industry profits since 2010 can’t be considered to be real profits.

The reality is that insurers are in bed with the Liberal government and have little to fear from Premier Kathleen Wynne’s government.

Remember the Insurance Bureau of Canada contributed $25,000 to Wynne’s recent leadership campaign. The IBC also has a history of significant contributions to the Ontario Liberal Party with contributions of $34,950 in 2007, $60,905 in 2008, $22,270 in 2010, $18,500 in 2011, $27,900 in 2012 and $4,000 so far this year. Those figures only cover IBC contributions and don’t include contributions made by individual insurance companies.

With its high pressure lobbying efforts and campaign contributions, auto insurers have had their way with successive Ontario governments since at least 1990. The fact the industry isn’t pushing back harder on the issue of premium reductions shows the cosy relationship between the industry and the government