Little benefit for victims

What is most objectionable about Liberals’ Bill 177 is the haste with which it’s been introduced

BY ALAN SHANOFF,TORONTO SUN

SATURDAY, MARCH 15, 2014

Earlier this month, Ontario’s Minister of Finance introduced Bill 171, the “Fighting Fraud and Reducing Automobile Insurance Rates Act”. 

According to a finance ministry press release the bill contains “new initiatives to protect the nine million drivers in the province”.

The Insurance Bureau of Canada, representing the car insurance industry, has issued a press release supporting the bill.

So let’s examine a few of the ways that Ontario drivers will be “protected”.

A real way would be by encouraging insurance companies to settle cases quickly.

But one provision of the bill provides an incentive for insurance companies to delay settlements and payments to those injured in motor vehicle accidents.

Bill 171 would reduce the amount of interest insurers are required to pay on money owed to accident victims.

The current rate is 5% but under Bill 171 the rate would fall to 1.3% and be modified quarterly.

Ontario’s finance minister says this will “help reduce claims costs.” I’m sure it will. For the insurers.

The Ontario Trial Lawyers Association, representing lawyers acting for plaintiffs, objects to the change.

According to the OTLA, “insurers will be set to profit particularly in serious cases as they can earn greater returns by delaying settlement and investing the funds.” Fair Association of Victims for Accident Insurance Reform also objects to the change stating, “there is no incentive to settle cases when insurers can make a fortune sitting on the dollars that are owed to the injured accident victim.”

Another real way to protect drivers is to provide arbitrators with the power to penalize insurers that act unreasonably in withholding or delaying penalties.

Actually, arbitrators hearing accident benefits cases currently have that power under the Insurance Act.

They can award a lump sum of up to 50% of the amount withheld or delayed, along with interest, at the rate of 2% compounded monthly.

Curiously, Bill 171 eliminates that power.

So far, it doesn’t seem to be providing much protection to Ontario drivers.

But the centrepiece of Bill 171 is the removal of the arbitration function from the Financial Services Commission Ontario and giving it to Ontario’s Licence Appeal Tribunal. Surely, that’s a good thing for Ontario’s drivers?

Let’s see: FSCO arbitrators have many years of experience handling accident benefit disputes. They are full-time, unionized public sector employees, are seen to be independent and are respected.

What about the Licence Appeal Tribunal? Currently its members are part-time (other than the Associate Chair), appointed for temporary terms, receive per diem rates ranging from $398 to $664 (other than the Associate Chair), and are government appointees. Reappointment is at the pleasure of the Ontario cabinet.

What about experience? Most LAT decisions relate to impoundment of vehicles and liquor licence cases, although the LAT also hears other cases under a long list of legislation, none of which covers the sort of issues seen daily by FSCO arbitrators.

So, we will be moving from experience to no experience, full-time work to part-time, job security to precarious or no job security.

That doesn’t seem to be conducive to more protection for Ontario’s drivers.

But what is most objectionable about Bill 177 is the haste with which it has been introduced — just two weeks following release of the Ontario Automobile Insurance Dispute Resolution System Review by J. Douglas Cunningham, a former associate chief justice of the Ontario, Superior Court of Justice.

That must be some sort of speed record.

But with this haste there has been no opportunity for input by stakeholders.

It’s just as the Ontario government did in December when it modified accident benefits, effective Feb. 1, in part to overturn a recent Ontario Court of Appeal decision.

I can see where reduction of interest rates, removal of special awards and shunting cases away from experienced, independent arbitrators would benefit insurance companies.

But where is the benefit to drivers and accident victims?

Oh yes, there’s that promised 15% insurance rate reduction. We’ll see. 

Ontario NDP slams changes to auto insurance attendant care benefits

DAILY NEWS Mar 7, 2014

New changes to the standard Ontario auto insurance policy were characterized this week as “mean spirited” by the New Democratic Party's consumer services critic, though the Insurance Bureau of Canada suggests that one amendment that took effect Feb. 1 did not actually change an auto injury victim’s entitlement to attendant care from professional health support workers.

One of those changes “restricts the amount of attendant benefits that can be claimed by family members who are caring for someone who has been injured in an automobile accident,” said Jagmeet Singh, the NDP critic for consumer services, in the legislature Wednesday.

“To make some further clarifications, this attendant care benefit is only available to the most vulnerable people in our society: those who are catastrophically injured.”

But attendant care benefit is actually available for both catastrophic and non-catastrophic injuries that do not fall under the minor injury guideline (MIG). The maximum attendant care benefit that can be paid under the standard auto policy – to policyholders who do not purchase optional additional benefits – is $3,000 per month, “if the insured person did not sustain a catastrophic impairment as a result of the accident.” The maximum is $6,000 per month if the insured person did sustain a catastrophic impairment.

On Dec. 17, 2013, the ruling minority Liberal government filed Ontario Regulation 347/13, which was published in the Ontario Gazette Jan. 4 and took effect Feb. 1.

The change that Singh referred to clarifies the amount that can be claimed, by an “attendant care provider” who is not providing care “in the course of the employment, occupation or profession in which the attendant care provider would ordinarily have been engaged for remuneration, but for the accident.”

That amount cannot exceed “the amount of the economic loss sustained by the attendant care provider during the period while, and as a direct result of, providing the attendant care.”

This change, Singh claimed, “means that people who have already left their jobs, who are already caring for their loved ones, would no longer have the protection or the compensation that they would have been entitled to.”

As a result, Singh added, this could result in more disputed claims, which is “quite ironic, because the government has just introduced a bill which seeks to speed up the dispute resolution system but has actually created another complex problem in the system.”

However, the Insurance Bureau of Canada notes that this amendment does not actually change a claimant's entitlement to attendant care.

“The funds available for attendant care services remain the same should the services be provided by a professional health support worker,” an IBC spokesperson wrote in an e-mail to Canadian Underwriter. “The new reform that came into effect on February 1, 2014 limits a friend or family member who provides attendant care to an injured auto claimant to be compensated for that service to the extent of the economic loss that they incur to provide that care.”

IBC added the new change does not have an impact on “a family member or friend of a claimant who is currently providing care to an injured party” because the changes to SABS applies only for “claims for attendant care submitted on or after February 1, 2014.”

But Singh said March 5 he is calling for the government “to stop going after the most vulnerable people in our society and cancel this mean regulatory change.” Singh represents the riding of Bramalea-Gore-Malton,  northwest of Toronto.

Three other changes to SABS took effect Feb. 1. One of them pertains to an exception, to the $3,500 maximum, that can be claimed by someone who falls into the minor injury guideline (MIG).

Before Feb. 1, Section 18 (2) of the SABS stipulated that the $3,500 maximum for the MIG does not apply if the accident victim's health care practitioner “determines and provides compelling evidence that the insured person has a pre-existing medical condition that will prevent the insured person from achieving maximal recovery from the minor injury” if the person were subject to the MIG. Now, Section 18 (2) adds a stipulation that the pre-existing condition had to have been “documented by a health practitioner before the accident.”

A third change also pertains to pre-existing conditions, in cases where claimants have injuries that would otherwise fall under the MIG. Section 38 outlines the requirements for treatment and assessment plans.

That section requires that, for accidents that occurred after Sept. 1, 2010, the health care practitioner state that the impairment is either “not a predominantly minor injury,” or that if it is a predominantly minor injury, that the injury does not fall under the MIG because “the insured person has a pre-existing medical condition that will prevent the insured person from achieving maximal recovery from the minor injury” if the injured person were to be subject to the limitations of the MIG.

That clause – section 38 (3 (c (i (B)))) – was changed, effective Feb. 1, to add the stipulation that the pre-existing condition “must have been documented by a health practitioner before the accident.”

A fourth change applies to accident victims who could meet the criteria for two – or all three – of income replacement, non-earner or caregiver benefits. In those cases, applicants must elect one of the three.

Prior to Feb. 1, section 35 (3) stipulated that an applicant's election for one of those benefits was considered to be final and could only be subsequently changed if that change is permitted under section 35 (2), which applies to auto accident victims with catastrophic injuries.

Sub-section (2) requires insurance carriers to notify applicants who are catastrophically impaired that, despite any election previously made, that the applicant “may elect, within 30 days after receiving the notice, to receive a caregiver benefit if the applicant would otherwise qualify for a caregiver benefit.”

As of Feb. 1, section 35 (3) states that the initial election – for income replacement, non-earner or caregiver – is final and can be only be subsequently changed, in accordance with section 35 (2), “regardless of any change in circumstances.”

Action on insurance reform But under our polarized, adversarial system, accident victims will continue to be maltreated

The Toronto Sun

The Ontario government appears to be moving quickly to adopt some of the recommendations of the final report of the Ontario Automobile Insurance Dispute Resolution System (DRS) Review, released last month.

In 2013, Ontario Finance Minister Charles Sousa appointed the Hon. Douglas Cunningham, a former associate chief justice of the Ontario Superior Court of Justice, to the task.

His job was to provide “recommendations regarding systemic causes of and solutions to the mediation backlog, potential changes to the current structure, a delivery model and process, the addition of a dispute prevention process for the system and other issues related to the viability of the DRS.”

All of this relates to our dysfunctional, no-fault, auto accident benefit system, which seems to do a better job of creating disputes than providing promised benefits to accident victims.

Cunningham’s final report was released last month and last week Sousa announced new legislation adopting some of Cunningham’s recommendations to streamline the dispute resolution system.

Streamlining the system is a good thing, but there is no proposal or even a suggestion on addressing Cunningham’s observation about “how polarized the system has become” and how the accident benefits claims process had become “so adversarial”.

We can streamline all we like, but until the provincial government addresses the systemic problems created by our polarized, adversarial system, accident victims will continue to be maltreated, albeit for a shorter duration once the new legislation comes into force.

As Cunningham observed, “The insurance industry points to the plaintiff bar as the source of the system’s problems, while the legal community blames the practices of the insurance industry.” In other words, neither side is prepared to take ownership of the problem or admit to any shortcomings of its own.

Meanwhile, it’s those who suffer the misfortune of being injured in motor vehicle accidents who also suffer due to this polarization.

Cunningham also noted independent medical examinations, now called insurer examinations (IEs), “appear to have little credibility with claimants and only serve to trigger disputes”.

At the same time, Cunningham pointed out that stakeholders, “strongly supported the current system in which parties provide their own experts.” In other words, there’s a huge problem with the use of experts but neither side wants to do much to fix it.

While Cunningham wasn’t assigned the job of reviewing insurer examinations, it seems strange to try to fix the accident benefits dispute resolution system without reviewing and offering recommendations on dealing with insurer examinations, which Cunningham concedes, trigger disputes.

Cunningham repeated concerns by consumer advocates that health regulatory colleges “have not been responsive to complaints regarding members who conduct IEs.” He also remarked that it “must be a challenge to insulate themselves from outside influence.”

If that wasn’t clear enough, Cunningham added, “The problem is obvious. An expert retained by an insurer who supports claimants is unlikely to be retained again. For this culture shift to be successful, the government will need to be proactive.” That seems a polite way of saying it’s difficult for experts appointed by insurers not to provide reports that favour the insurers who pay them large sums of money in return.

So it’s no wonder the FAIR Association of Victims for Accident Insurance Reform takes issue with the Cunningham Report stating, “The recently released Dispute Resolution System Review final report does not address the abuse of Ontario’s accident victims and our courts by assessors who intentionally minimize or deflate an injury so Ontario’s insurers can deny claims. Despite the DRS review being the forum most suited to impose criteria regarding medico-legal expert witnesses, and the place to set standards, the issue will remain a core problem affecting every accident victim.”

The government’s proposed legislation is supposed to reduce costs, fight fraud and protect consumers.

Whether it will actually do any of that remains to be seen, but there’s nothing of substance in it to protect accident victims. 

Accident victims group, Ontario PC critic call for reform of auto insurers’ medical assessments

DAILY NEWS Mar 11, 2014

Both the Fair Association of Victims for Accident Reform (FAIR) and an opposition critic have taken issue with Bill 171, which proposes several changes to auto insurance regulations, by suggesting the bill does not address the issue of claims disputes over insurers' medical assessments.

“Fix the quality of the insurer assessments and impose qualification criteria on the insurers' preferred medico-legal assessors and the reports on which our courts rely will instantly improve,” FAIR stated Friday in a press release.

“System costs will drop. Cases will move through quicker in a system not clogged with tactical – but wrongful – denials of legitimate injury claims.”

FAIR, an advocacy group representing people injured in vehicle collisions, was reacting to Bill 171, which the ruling minority Liberal government tabled at Queen's Park March 4.

If passed into law with no amendments, Bill 171 would change the Insurance Act, the Financial Services Commission of Ontario Act, the Licence Appeal Tribunal Act, the Motor Vehicle Accident Claims Act and the Repair and Storage Liens Act.

Bill 171, which would change the dispute resolution system, was tabled two weeks after the release of the Ontario Automobile Dispute Resolution System (DRS) Review, written by J. Douglas Cunningham, former associate chief justice of the Ontario Superior Court.

Among other things, Cunningham recommended the government appoint a “public sector administrative tribunal” for dealing with auto insurance disputes. He also recommended that the tribunal fall under a Cabinet minister instead of the superintendent of financial services.

The Ontario government is acting on that recommendation by proposing, in Bill 171, to move the DRS from the Financial Services Commission of Ontario (FSCO) to the Ministry of the Attorney General.

“This move would help create a more streamlined DRS, and a more streamlined DRS would help ensure that the system operates more efficiently and effectively, and remains accessible for accident victims,” Finance Minister Charles Sousa said in the legislature March 4. “This is an important step towards reducing consumer frustration as well as uncertainty and costs.”

Bill 171 would also “establish a transition strategy for the licensing of health service providers that bill auto insurers,” Sousa added. “If passed, only licensed providers will get paid directly by insurers – a key anti-fraud initiative.”

Sousa noted that Bill 171 “proposes to modernize licensing and disciplinary hearings for insurance agents and adjusters.” If it is passed into law, Sousa said, “FSCO would have the authority to revoke or immediately suspend the licences of agents and adjusters who act improperly and put the public at risk.”

But FAIR criticized the government for not addressing insurers' medical assessments.

“We have watched the stakeholders and the legislators and their foremost experts spend two decades trying to get the Ontario auto insurance system to run right – but they have repeatedly and stubbornly ignored the key problem –  the poor quality of the medico-legal assessments that fuel the disputes which backlog the system,” FAIR stated in a release March 7.

The Progressive Conservative finance critic, Vic Fedeli, also suggested the government needs to address the issue of insurers' medical assessments in auto claims.

The PC party “suggested a truly independent third party injury-assessment protocol in order to clarify injuries and mitigate the demands for mediation in the first place,” Fedeli said in the legislature March 4. That, he added, “is missing” from Bill 171.

Bill 171 changes the “prejudgment interest rate on general damages for pain and suffering” in auto claims, from the current 5% – which Sousa noted is “not linked to market conditions” and has not been updated since 1990. With Bill 171, the government is “proposing to lower this interest rate by linking it to market conditions.”

Sousa added the “current rate for economic damages … is linked to the Bank of Canada interest rate” at 1.3% per year.

But the proposed change to the prejudgment interest rate is opposed by the Ontario Trial Lawyers Association (OLTA), which contends that insurance carriers could  “earn greater returns by delaying settlement and investing the funds.”

FAIR echoed the OLTA's concerns.

“There is no incentive to settle cases when insurers can make a fortune sitting on the dollars that are owed to the injured accident victim,” FAIR stated. “Reducing the rate paid out is another incentive for some unscrupulous insurers to create more delay (often through a bogus IME/IE)- not a disincentive to fraud.”

In 2012, FAIR had called on the Ontario government to take action against what FAIR calls “substandard” independent medical exams.

After the November 2012 release of the final report of the Ontario Automobile Insurance Anti-Fraud Task Force Steering Committee, FAIR chair Rhona DesRoches had said that doctors with multiple complaints against them will not necessarily have their names published by the College of Physicians and Surgeons of Ontario (CPSO).

In its report, the Anti-Fraud Task Force Steering Committee recommended in 2012 that the province require Ontario auto insurance carriers to disclose publicly how they choose and assess the performance of businesses and professionals they recommend or refer consumers to see, such as independent medical examiners (IMEs).

The steering committee noted at the time that IMEs are “often regarded with suspicion” and that the professional colleges should prescribe “best practices for maintaining professional independence and a reputation for fairness.” The task force also recommended a process for reviewing complaints and imposing sanctions, where professional colleges find that those conducting examinations “do not deserve the public's trust.”

On March 7, FAIR noted that the anti-fraud task force had recommended in 2012 that “the insurance industry jointly develop standards for the delivery of third-party medical examinations, as well as qualifications” for those conducting the examinations.

“I understand that this recommendation has not been implemented to date,” FAIR stated. “If we could remove all of the legitimately injured accident victims in the system whose claims have been wrongfully denied on the basis of a poor quality medical report – the preposterous wait times and high costs would be greatly reduced.”

Action on insurance reform

But under our polarized, adversarial system, accident victims will continue to be maltreated

 BY ALAN SHANOFF ,TORONTO SUN

FIRST POSTED: SATURDAY, MARCH 08, 2014 06:34 PM EST

The Ontario government appears to be moving quickly to adopt some of the recommendations of the final report of the Ontario Automobile Insurance Dispute Resolution System (DRS) Review, released last month.

In 2013, Ontario Finance Minister Charles Sousa appointed the Hon. Douglas Cunningham, a former associate chief justice of the Ontario Superior Court of Justice, to the task.

His job was to provide “recommendations regarding systemic causes of and solutions to the mediation backlog, potential changes to the current structure, a delivery model and process, the addition of a dispute prevention process for the system and other issues related to the viability of the DRS.”

All of this relates to our dysfunctional, no-fault, auto accident benefit system, which seems to do a better job of creating disputes than providing promised benefits to accident victims.

Cunningham’s final report was released last month and last week Sousa announced new legislation adopting some of Cunningham’s recommendations to streamline the dispute resolution system.

Streamlining the system is a good thing, but there is no proposal or even a suggestion on addressing Cunningham’s observation about “how polarized the system has become” and how the accident benefits claims process had become “so adversarial”.

We can streamline all we like, but until the provincial government addresses the systemic problems created by our polarized, adversarial system, accident victims will continue to be maltreated, albeit for a shorter duration once the new legislation comes into force.

As Cunningham observed, “The insurance industry points to the plaintiff bar as the source of the system’s problems, while the legal community blames the practices of the insurance industry.” In other words, neither side is prepared to take ownership of the problem or admit to any shortcomings of its own.

Meanwhile, it’s those who suffer the misfortune of being injured in motor vehicle accidents who also suffer due to this polarization.

Cunningham also noted independent medical examinations, now called insurer examinations (IEs), “appear to have little credibility with claimants and only serve to trigger disputes”.

At the same time, Cunningham pointed out that stakeholders, “strongly supported the current system in which parties provide their own experts.” In other words, there’s a huge problem with the use of experts but neither side wants to do much to fix it.

While Cunningham wasn’t assigned the job of reviewing insurer examinations, it seems strange to try to fix the accident benefits dispute resolution system without reviewing and offering recommendations on dealing with insurer examinations, which Cunningham concedes, trigger disputes.

Cunningham repeated concerns by consumer advocates that health regulatory colleges “have not been responsive to complaints regarding members who conduct IEs.” He also remarked that it “must be a challenge to insulate themselves from outside influence.”

If that wasn’t clear enough, Cunningham added, “The problem is obvious. An expert retained by an insurer who supports claimants is unlikely to be retained again. For this culture shift to be successful, the government will need to be proactive.” That seems a polite way of saying it’s difficult for experts appointed by insurers not to provide reports that favour the insurers who pay them large sums of money in return.

So it’s no wonder the FAIR Association of Victims for Accident Insurance Reform takes issue with the Cunningham Report stating, “The recently released Dispute Resolution System Review final report does not address the abuse of Ontario’s accident victims and our courts by assessors who intentionally minimize or deflate an injury so Ontario’s insurers can deny claims. Despite the DRS review being the forum most suited to impose criteria regarding medico-legal expert witnesses, and the place to set standards, the issue will remain a core problem affecting every accident victim.”

The government’s proposed legislation is supposed to reduce costs, fight fraud and protect consumers.

Whether it will actually do any of that remains to be seen, but there’s nothing of substance in it to protect accident victims. 

Ontario NDP slams changes to auto insurance attendant care benefits

DAILY NEWS Mar 7, 2014 3:15 PM

New changes to the standard Ontario auto insurance policy were characterized this week as “mean spirited” by the New Democratic Party's consumer services critic, though the Insurance Bureau of Canada suggests that one amendment that took effect Feb. 1 did not actually change an auto injury victim’s entitlement to attendant care from professional health support workers.

One of those changes “restricts the amount of attendant benefits that can be claimed by family members who are caring for someone who has been injured in an automobile accident,” said Jagmeet Singh, the NDP critic for consumer services, in the legislature Wednesday.

“To make some further clarifications, this attendant care benefit is only available to the most vulnerable people in our society: those who are catastrophically injured.”

But attendant care benefit is actually available for both catastrophic and non-catastrophic injuries that do not fall under the minor injury guideline (MIG). The maximum attendant care benefit that can be paid under the standard auto policy – to policyholders who do not purchase optional additional benefits – is $3,000 per month, “if the insured person did not sustain a catastrophic impairment as a result of the accident.” The maximum is $6,000 per month if the insured person did sustain a catastrophic impairment.

On Dec. 17, 2013, the ruling minority Liberal government filed Ontario Regulation 347/13, which was published in the Ontario Gazette Jan. 4 and took effect Feb. 1.

The change that Singh referred to clarifies the amount that can be claimed, by an “attendant care provider” who is not providing care “in the course of the employment, occupation or profession in which the attendant care provider would ordinarily have been engaged for remuneration, but for the accident.”

That amount cannot exceed “the amount of the economic loss sustained by the attendant care provider during the period while, and as a direct result of, providing the attendant care.”

This change, Singh claimed, “means that people who have already left their jobs, who are already caring for their loved ones, would no longer have the protection or the compensation that they would have been entitled to.”

As a result, Singh added, this could result in more disputed claims, which is “quite ironic, because the government has just introduced a bill which seeks to speed up the dispute resolution system but has actually created another complex problem in the system.”

However, the Insurance Bureau of Canada notes that this amendment does not actually change a claimant's entitlement to attendant care.

“The funds available for attendant care services remain the same should the services be provided by a professional health support worker,” an IBC spokesperson wrote in an e-mail to Canadian Underwriter. “The new reform that came into effect on February 1, 2014 limits a friend or family member who provides attendant care to an injured auto claimant to be compensated for that service to the extent of the economic loss that they incur to provide that care.”

IBC added the new change does not have an impact on “a family member or friend of a claimant who is currently providing care to an injured party” because the changes to SABS applies only for “claims for attendant care submitted on or after February 1, 2014.”

But Singh said March 5 he is calling for the government “to stop going after the most vulnerable people in our society and cancel this mean regulatory change.” Singh represents the riding of Bramalea-Gore-Malton,  northwest of Toronto.

Three other changes to SABS took effect Feb. 1. One of them pertains to an exception, to the $3,500 maximum, that can be claimed by someone who falls into the minor injury guideline (MIG).

Before Feb. 1, Section 18 (2) of the SABS stipulated that the $3,500 maximum for the MIG does not apply if the accident victim's health care practitioner “determines and provides compelling evidence that the insured person has a pre-existing medical condition that will prevent the insured person from achieving maximal recovery from the minor injury” if the person were subject to the MIG. Now, Section 18 (2) adds a stipulation that the pre-existing condition had to have been “documented by a health practitioner before the accident.”

A third change also pertains to pre-existing conditions, in cases where claimants have injuries that would otherwise fall under the MIG. Section 38 outlines the requirements for treatment and assessment plans.

That section requires that, for accidents that occurred after Sept. 1, 2010, the health care practitioner state that the impairment is either “not a predominantly minor injury,” or that if it is a predominantly minor injury, that the injury does not fall under the MIG because “the insured person has a pre-existing medical condition that will prevent the insured person from achieving maximal recovery from the minor injury” if the injured person were to be subject to the limitations of the MIG.

That clause – section 38 (3 (c (i (B)))) – was changed, effective Feb. 1, to add the stipulation that the pre-existing condition “must have been documented by a health practitioner before the accident.”

A fourth change applies to accident victims who could meet the criteria for two – or all three – of income replacement, non-earner or caregiver benefits. In those cases, applicants must elect one of the three.

Prior to Feb. 1, section 35 (3) stipulated that an applicant's election for one of those benefits was considered to be final and could only be subsequently changed if that change is permitted under section 35 (2), which applies to auto accident victims with catastrophic injuries.

Sub-section (2) requires insurance carriers to notify applicants who are catastrophically impaired that, despite any election previously made, that the applicant “may elect, within 30 days after receiving the notice, to receive a caregiver benefit if the applicant would otherwise qualify for a caregiver benefit.”

As of Feb. 1, section 35 (3) states that the initial election – for income replacement, non-earner or caregiver – is final and can be only be subsequently changed, in accordance with section 35 (2), “regardless of any change in circumstances.”

Insurance amendment will allow rampant insurer fraud

Insurers set to profit from injured claimants on low prejudgment interestrate

 March 7, 2014

Burlington, ON: Auto insurance legislation introduced this week will give insurers an additional incentive to delay justice to innocent Motor Vehicle Accident victims.

The Ontario Trial Lawyers Association (OTLA) is concerned about changes to the prejudgment interest rate in pain and suffering claims. Under the proposed legislation, the rate would be lowered to 1.3 per cent from the current 5 per cent. If this change is approved by the Legislative Assembly, insurers will be set to profit particularly in serious cases as they can earn greater returns by delaying settlement and investing the funds.

“It's simple math,” said Charles Gluckstein, President of OTLA. “Why would an insurer pay out a claim when it can make money by delaying that claim indefinitely? When they are getting 4 per cent on their money, and they only have to pay interest to the claimant at 1.3 per cent, they can't lose in that scenario.”

“When it's more profitable for an insurer to delay than to pay, that's just wrong,” added Gluckstein.

OTLA urges all Members of the Legislative Assembly of Ontario to demand that the Minister of Finance amend the bill.

OTLA is also concerned about certain changes to Ontario’s Auto Insurance Dispute Resolution System. While Justice Cunningham, in his recent review of the Dispute Resolution System, has recommended a number of sensible reforms, OTLA strongly cautions the government to reconsider changes that would deprive injured accident victims of the opportunity to access the Courts in cases involving denials of statutory accident benefits.

“When an insurance company wrongfully cuts off a person’s benefits, that person should be able to go to Court to force them to pay,” said Gluckstein. “They shouldn’t be denied access to justice.”

Ontario Government Introduces Legislation to Begin Implementing the Cunningham Report

Wednesday, 5 March 2014

New Legislation to Protect Ontario Drivers, Improve the Auto Insurance System and Continue to Reduce Rates

March 4, 2014 10:00 a.m.

Ministry of Finance

Ontario is introducing new initiatives to protect the nine million drivers in the province and reduce costs and uncertainty in the auto insurance system. Reducing costs will help lower rates for Ontario drivers.

Transforming the Dispute Resolution System

The government is proposing changes to the Dispute Resolution System that, if passed, would help those injured in motor vehicle collisions settle disputed auto insurance claims faster.

The Auto Insurance Anti-Fraud Task Force recommended the creation of a more robust system in its final report in November 2012. The government appointed J. Douglas Cunningham to lead a review of the current system in August 2013. Mr. Cunningham received input from 35 stakeholders including written submissions and in-person meetings. He delivered an interim report in November 2013 and subsequently consulted on a possible framework for legislation.

The final report was released on February 18, 2014 and contained 28 recommendations to transform the system.

The proposed changes would create a new framework for the Dispute Resolution System by moving responsibility from the Financial Services Commission of Ontario (FSCO) to an existing tribunal administered by the Ministry of the Attorney General (the Licence Appeal Tribunal). This proposed move would make the system more effective and efficient, while ensuring it remains accessible for accident victims. Having the system operate as an administrative tribunal was a key recommendation of the review.

The current system has created considerable uncertainty in the auto insurance system. If passed, the proposed changes would expedite the dispute resolution process as well as curb financial and administrative stress on the system, which can increase costs and cause rates to go up. Transforming the system will help reduce uncertainty and create long-term stability in claims costs.

Updating the Prejudgment Interest Rate

The government is proposing changes that would align the prejudgment interest rate on pain and suffering damages due to motor vehicle collisions with market conditions. If passed, the proposed changes would update the current rate of five per cent by linking it to the prejudgment interest rate for other damages (currently 1.3 per cent and updated quarterly).

Aligning the rate with market conditions would help reduce claims costs.

Providing Regulation-Making Authority to Address Vehicle Storage Issues

The government is proposing legislative amendments to the Repair and Storage Liens Act that would provide authority to reduce the number of days a vehicle can be stored after an accident without giving notice to the driver where required, as well as the authority to determine the fair value of storage that can be charged.

Currently, a storer is required to give written notice of a lien for storage charges to the owner within 60 days after the day it receives the vehicle. The Auto Insurance Anti-Fraud Task Force noted that storers can maximize their lien by delaying notice until the 60-day period has almost expired, and the vehicle's owner or insurer may be liable for inflated costs.

If passed, the proposed amendments would help the government address the task force's recommendation and reduce abusive storage practices and remove associated costs from the auto insurance system.

A consultation report containing recommendations for next steps will be released for public comment in March 2014. The Ministry of Consumer Services hopes to introduce further legislation and regulations in spring and summer 2014.

Reducing abuse and related costs within the auto insurance system is a key element of the government's Cost and Rate Reduction Strategy.

Modernizing the Insurance Agent and Adjuster Discipline Process

The government proposes to modernize the system for insurance agent and adjuster disciplinary hearings to ensure the process is streamlined, efficient and fair.

This proposed change would help protect consumers by allowing for immediate suspension of an insurance agent or adjuster's licence if the public is at risk. It would help combat fraud and build on previous changes the government has made to improve consumer protection, and expand and modernize FSCO's investigation and enforcement authority, particularly in the area of fraud prevention.

If passed, the modernized licensing and disciplinary processes would be implemented by FSCO in spring and summer 2014.

Establishing a Transition Strategy for Health Service Provider Licensing

The government is proposing legislation to establish a transition strategy for the licensing of health service providers in the auto insurance system.

The proposed amendments build on previous legislative changes made to create a framework for health service provider licensing based on key Auto Insurance Anti-Fraud Task Force recommendations.

If passed and implemented, the licensing model will ensure that only licensed providers get paid directly by insurers. The first set of regulations required for implementing the licensing model was announced in December 2013. The government is developing the second set of regulations required for implementation and is targeting spring 2014 for the start of the transition to licensing.