Insurance premium shell game

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




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

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