Tuesday 31 December 2013

FSCO Releases Standard Benefit Statement Form

Another anti-fraud measure is being introduced by FSCO effective September 1, 2014.  

Recommendation #17 of the Anti-Fraud Task Force recommended that insurers itemize the list of invoices they have received when they provide a benefit statement to a claimant every two months.  Ontario Regulation 14/13 amended the SABS to include a number of changes recommended by the Task Force including providing the Superintendent with authority to issue a standard form that insurers must use when issuing bi-monthly benefit statements.

The Superintendent has now released the Standard Benefit Statement form that insurers must use. 
Insurers have eight months to perform the necessary system and operational changes in order to begin producing Statements beginning September 1, 2014. 
 
 Subsection 64 (2) of the SABS authorizes delivery of Statements by multiple methods, e.g., by ordinary mail, or by email if the claimant has agreed to delivery by email.
 
The new form can  be found here.

Insurance News - Tuesday, December 31, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, December 31, 2013:

Tuesday 24 December 2013

Wednesday 18 December 2013

Ontario Auto Insurance Three-Year Review

Section 289 of the Insurance Act requires the Superintendent of the Financial Services Commission of Ontario (FSCO) to undertake every three years a review of Part VI of the Insurance Act (Automobile Insurance) and related regulations. In 2013, the government consolidated existing statutory auto insurance reviews and increased the frequency of a major review to every three years to better respond to the rapidly evolving auto insurance landscape in Ontario. FSCO is initiating a review of the auto insurance system to meet this requirement. 

Consumers and stakeholders are invited to provide comments and suggestions on how to ensure a stable, sustainable and competitive auto insurance system, including:
  • reducing claim costs
  • decreasing regulatory, product and administrative complexity for industry, service providers and consumers  
  • promoting greater consumer choice and protection
  • increasing transparency in communications between insurers, service providers, policyholders and claimants
  • improving the availability of auto insurance for individuals and businesses
  • basing treatment of motor vehicle accident injuries on scientific and medical evidence, and
  • considering approaches used in other jurisdictions
     
The deadline for submissions is March 31, 2014.

Government Releases Regulations Governing the Licensing of Health Care Clinics

The Ontario Government filed new regulations as part of the process to eventually license health care clinics and assessment centres operating in the auto insurance sector.  The regulations cover a public registry of licenced facilities (Regulation 350/13), licensing of providers (Regulation 348/13) and requirements of the principle representative of each licensed facility (Regulation 349/13).  The report recommending a licensing system was made by the Automobile Insurance Anti-Fraud Task Force in 2012.

Public Registry

The public register of licensed and former licensed service provider’s licence to be maintained must contain the following information about each licensee and former licensee:

1. The name in which the service.
2. The licence number.
3. The licensee’s mailing address in Ontario.
4. The date on which the licence was issued.
5. Whether the licence is in good standing or is suspended.
6. Any conditions that apply to the licence.
7. Any periods of time during which the licence was suspended.
8. Any periods of time during which the licence was revoked.
9. The name of the licensee’s principal representative.
10. The address of every facility, branch or location in Ontario of the licensee.

Eligibility criteria for facilities

A service provider’s licence may be issued to an applicant if all of the following requirements relating to the applicant’s business systems and practices and the management of its operations are satisfied:

1. The applicant has a mailing address in Ontario that is not a post office box.
2. The applicant has an email address.
3. The application includes the particulars of the individual to be designated as the service provider’s principal representative.
4. The principal representative has provided an attestation on the applicant’s behalf relating to the applicant and the application and relating to the applicant’s compliance with the Act.
5. The application includes the particulars of each facility, branch or location in Ontario that the applicant operates or intends to operate.
6. The applicant must agree to bill insurance companies through HCAI.

Unsuitable Applicants


In determining whether an applicant is not suitable to hold a service provider’s licence, the Superintendent is required to have regard to the following circumstances:

1. Based on past conduct of the applicant, there are reasonable grounds for the belief that the applicant will not carry out in accordance with the law or with integrity and honesty the completion or submission to an insurer, reports, forms, plans, invoices or other documentation or information authorized under the SABS.
 2. Whether, having regard to the past conduct of any of the following persons, there are reasonable grounds for the belief that the applicant’s business systems and practices and the management of its operations will not be carried on in accordance with the law or with integrity and honesty:
  • The applicant. 
  • If the applicant is a corporation, a director, officer or shareholder of the corporation. 
  • If the applicant is a partnership, a partner of the partnership. 
  • If the applicant is a sole proprietorship, the sole proprietor. 
  • The person to be designated as the applicant’s principal representative. 
  • An employee, agent or contractor of the applicant. 
3. Based on past conduct, there are reasonable grounds for the belief that the applicant’s business systems and practices and the management of its operations will not be carried on in accordance with the law or with integrity and honesty.
 4. Whether anyone associated with the business is engaged in a business or undertaking that would jeopardize the applicant’s integrity and honesty in relation to the applicant’s business.
5. Whether anyone associated with the business has made a false statement or has provided false or deceptive information to the Superintendent, with respect to the application for a licence, or in response to a request for information by the Superintendent.


Eligibility criteria for principal representatives

An individual who satisfies the following criteria is eligible to be designated by a licensed service provider as its principal representative:

1. The individual has the following status in relation to the licensee:
  • If the licensee is a corporation, he or she is a director or officer of the corporation. 
  • If the licensee is a partnership, other than a limited partnership, he or she is a partner. 
  • If the licensee is a limited partnership, he or she is a general partner or a director or officer of a corporation that is a general partner. 
  • If the licensee is a sole proprietorship, he or she is the sole proprietor. 
  • If the licensee is not a corporation, a partnership or a sole proprietorship, he or she is responsible for the day-to-day control and management of the licensee. 
 2. The individual has the authority to make decisions on behalf of the licensee with respect to matters related to the licence and matters related to the licensee’s compliance with the Act and to communicate with the Superintendent about those matters.
3. The individual has the authority to exercise the powers and perform the duties described above.


Powers and duties of principal representatives

1. Take reasonable steps to ensure that the licensee complies with the Act.
2. Take reasonable steps to ensure that the licensee’s business systems and practices and the management of the licensee’s operations are carried on in accordance with the law and with integrity and honesty.
3. Ensure that the licensee takes reasonable steps to deal with any contravention of the Act.
4. Make recommendations to the licensee regarding changes in its business systems and practices and the management of its operations, as necessary, to ensure that these standards are achieved.
5. Take reasonable steps to ensure that a system of supervision is in place to ensure that these standards are achieved.
6. Provide such attestations on the licensee’s behalf relating to the licensee and relating to its compliance with the Act, as may be required by the Superintendent and within the time required by the Superintendent.

Tuesday 17 December 2013

Ontario Government Tightens Up SABS

The Ontario Government filed amendments to the SABS to tighten up a number of provisions to clarify the policy intent.  The amendments are likely part of its Rate Reduction Strategy in that it provides the insurance industry with more cost certainty with regards to these provisions.  The amending regulation is Regulation 347/13 and comes into force on February 1, 2014.

1. Minor Injuries

The Government has clarified that a claimant who seeks an exemption to the $3,500 minor injury cap because of a pre-existing condition must provide medical documentation that precedes the accident date.

2. Attendant Care Benefits

The Government has made a clarification in cases where the attendant care benefit is based on the economic loss of the person who provides attendant care services to a claimant.  In these cases the amount of the benefit cannot exceed the actual income loss of that person.  This amendment reverses the impact of Henry v. Gore Mutual.

3. Weekly Benefit Election

The Government has made the election under section 35 final.  A claimant who qualifies for more than one of the income replacement, caregiver or non-earner benefits must choose one.  The claimant will no longer be able to elect to receive another benefit at a later date.


Insurance News - Tuesday, December 17, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, December 17, 2013:

Saturday 14 December 2013

Ontario Auditor General's Update Report on Auto Insurance Regulatory Oversight

The Auditor General of Ontario's 2011 Annual Report reported on FSCO's oversight of the auto insurance system.  The report made 7 recommendations covering SABS costs, fraud, the rate approval process, the dispute resolution system, performance measures, MVAC's unfunded liabilities and health care assessments.  It is the practice of the Auditor General to do a follow up two years after an audit.  The follow up report has now been released.

The Auditor General reports that FSCO has made progress in addressing most of her recommendations, with significant progress made on several.  Although average injury claim costs had declined significantly since 2010, at the time of the follow up average automobile insurance premiums had not. In addition, discussions held to date had not resulted in any increase to the amount recovered from auto insurers for health system costs incurred to care for people injured in motor vehicle accidents. The status of the actions taken is summarized following each recommendation.

Recommendation 1:

FSCO should:
  • implement regular interim reviews of the SABS to monitor trends such as unexpected escalating claims costs and premiums between the legislated five-year reviews, in order to take appropriate action earlier, if warranted;
  • monitor ongoing compliance with the MIG, expedite the work develop evidence-based treatment protocols for minor injuries, and identify and address any lack of clarity in its definitions of injuries;
  • implement its plans as soon as possible to obtain assurance that insurance companies are judiciously administering accident claims in a fair and timely manner; and 
  • examine cost-containment strategies and benefit levels in other provinces to determine which could be applied in Ontario to control this province’s relatively high claims costs and premium.
Status

On August 16, 2013, the government proclaimed legislative changes to consolidate multiple auto insurance reviews, including the former five-year review of auto insurance, the three-year review of risk-classification regulations and the two-year review of the SABS. The new consolidated review of the auto insurance system will be initiated at least once every three years, beginning in 2013. 

In July 2012, FSCO retained the consulting services of medical and scientific experts who have been working to develop an evidence-based treatment protocol for the most common injuries from motor vehicle accidents. This is a two-year project. The consultants provide regular updates to the Superintendent and, as directed in the 2013 Budget, FSCO will provide an interim report this year on the progress of the project. The interim MIG will be assessed upon completion of the consultants’ report and will be addressed as part of a future comprehensive statutory reviews.

In summer 2011, FSCO introduced a new annual requirement that each insurance company provide it with a statement from its chief executive officer attesting that it had controls, procedures and processes in place to ensure compliance with legislative requirements for the payment and handling of claims.

In addition, new regulations came into force on January 1, 2013, that provided FSCO with the power to impose administrative fines on insurers for not complying with legislative and approval requirements.

As a result of changes to the SABS in September 2010, the auto insurance industry reports that Ontario’s average injury claim cost has decreased more than 50%, from about $56,000 in 2010 to $27,000 in 2012. The difference between Ontario’s average injury claim costs and those paid by other provinces has narrowed, although Ontario’s costs now stand at approximately three times higher than those of other provinces. However, lower accident benefit claim costs have not yet resulted in corresponding lower average premiums paid in Ontario, where the average premium was $1,551 in 2012, or 8% higher than in 2010, and still the highest in the country.

In August 2013, the government introduced a number of initiatives as part of a strategy to reduce average auto insurance rates by a target of 15%.

Recommendation 2:

To reduce fraud in Ontario’s auto insurance industry FSCO should:
  •  help identify potential measures to combat fraud, including those recommended by the IBC and those in effect in other jurisdictions, assess their applicability and relevance to Ontario, and, when appropriate, provide advice and assistance to the government for their timely implementation; and
  • ensure development as soon as possible of an overall anti-fraud strategy that spells out the roles and responsibilities of all stakeholder.
Status

In 2011, the government appointed the Ontario Auto Insurance Anti-Fraud Task Force to determine the scope and nature of automobile insurance fraud and make recommendations about ways to reduce it. As part of the Task Force, the Ministry of Finance retained consultants to provide research about how other jurisdictions combat fraud, analysis of the potential range of fraud in Ontario’s auto insurance system and advice on the regulation of health care facilities (provided by Willie Handler).

The Task Force made 38 recommendations that form an integrated anti-fraud strategy focused on prevention, detection, investigation and enforcement, along with enhanced and clearer regulatory roles and responsibilities.

New regulations came into force on June 1, 2013, which, among other things:
  • require insurers to provide claimants with all the reasons for which a medical or rehabilitation claim was denied; 
  • require insurers to itemize expenses in a bi-monthly statement to claimants of medical- rehabilitation benefits paid out on a claimant’s behalf;
  • increase the role of claimants in preventing fraud by requiring them to confirm their receipt of treatment, goods or other services; and 
  • make third-party service providers subject to sanctions for overcharging insurers for goods and services, and prohibiting them from asking consumers to sign blank claim forms.
In February 2011, to help streamline the claims-handling process, FSCO made usage of the HCAI system mandatory.

Recommendation 3:

To ensure premiums are fair and consistent, FSCO should:
  • update and document its policies and procedures for making rate decisions and for properly assessing rate changes in light of actual financial solvency concerns of insurance companies; 
  • review what constitutes a reasonable profit margin for insurance companies when approving rate changes, and periodically revise its current assessment to reflect significant changes; and 
  • establish processes for verifying or obtaining assurance that insurers actually charge only the authorized rate.
Status

FSCO updated its policies and procedures for processing and approving rate applications effective May 2012. Rate decisions were based on a defined range that was acceptable when a proposed rate differed from the FSCO actuarial service’s assessments. Staff were required to get written approval from the Superintendent when a proposed rate decision is greater than the acceptable range.

In October 2012, FSCO retained a consultant to review the reasonable profit margin rate that had been established for auto insurance rate filings, including a financial assessment and consultation with the auto insurance industry.  In the final report, the consultant recommended that FSCO should consider moving to either a five-year or 10-year rolling average for a return-on-equity benchmark rate.  In August 2013, FSCO decided that an eight-year rolling average for a return-on-equity benchmark rate would be used going forward.  According to FSCO, the new methodology generated an 11%return-on-equity benchmark for 2013.  In addition, FSCO adopted another benchmark that assesses the insurer’s premium-to-equity ratio that is consistent with federal solvency and capital requirements. FSCO also has begun a review of the feasibility of moving to a return-on-premium approach, which it expects may be relatively more simple and transparent than the return-on-equity benchmark.

Since 2012, FSCO has required that the chief executive officer of an auto insurance company annually attest in writing that it provided auto insurance in Ontario in accordance with approved rates, risk classification systems and underwriting rules.

FSCO implemented a new annual requirement for insurance companies to attest that they had independent audit processes in place to confirm that approved rates were charged by the insurer.

Recommendation 4:

To ensure that FSCO meets its mandate to provide fair, timely, accessible, and cost-effective processes for resolving disputes over statutory accident benefits, it should:
  • improve its information-gathering to help explain why almost half of all injury claimants seek mediation, as well as how disputes are resolved, and to identify possible systemic problems with its SABS benefits policies that can be changed or clarified to help prevent disputes; and 
  • establish an action plan and timetable for reducing its current and growing backlog to a point where it can provide mediation services in a timely manner in accordance with legislation and established service standards.
Status

The government announced in its 2012 and 2013 Budgets that a review of the auto insurance dispute resolution system would take place.  FSCO also completed an internal examination on closed mediation cases and the corresponding insurers’ claims files to gather information on the reasons for the high number of claimants who were seeking mediation and how these disputes were resolved.

In August 2013, the government announced the appointment of an expert to undertake the review and make recommendations on transforming the current system. An interim report was due in fall 2013 and a final report by the end of February 2014 (Willie Handler is providing support to the review).

To address FSCO’s growing backlog of mediation cases, Treasury Board approved in December 2011 FSCO’s request for an additional $38.2 million over three years to hire a private dispute resolution service provider to supplement FSCO’s own staff.  With this contract help, and with new software that has made mediation scheduling more efficient, all mediation files had been assigned as of August 19, 2013, and the backlog had been eliminated.

Recommendation 5:

In order to provide the public, consumers, stakeholders, and insurers with meaningful information on its auto insurance oversight and regulatory activities, FSCO should report timely information on its performance, including outcome-based measures and targets that more appropriately represent its key regulatory activities and results.

Status

During the 2012/13 fiscal year, FSCO finalized its corporate Performance Management Framework that details for each of its divisions, including auto insurance, a set of performance measures and targets that link to its long-term goals and strategic priorities.  The Performance Management Framework was posted on FSCO’s website.

In addition, in June 2012, FSCO posted on its website new standards for its turnaround time for approving insurers’ filings for private passenger auto insurance rates and risk classification changes. The performance results for 2012/13 were posted on the FSCO website in June 2013.

Recommendation 6:

To ensure that the MVACF is sustainable over the long term and able to meet its future financial obligations, FSCO should establish a strategy and timetable for eliminating the Fund’s growing unfunded liability over a reasonable time period and seek government approval to implement this plan.

Status

No changes had been made to address the unfunded liability of the Fund, but FSCO continues to formally monitor the status of the Fund, and ongoing Ontario automobile insurance reforms have had a positive impact on the Fund’s unfunded liability. Any changes to funding would require amendments to regulations and to the existing MVACF fee on issue or renewal of an Ontario driver’s licence, which are the responsibilities of the Ministry of Finance and the Ministry of Transportation

Recommendation 7:

In view of the fact that it has been five years since the last review of the assessment of health system costs owed by the auto insurance sector despite the significant increase in health care costs related to automobile accidents over the same period, FSCO should work with the Ministry of Finance, the Ministry of Health and Long-Term Care, and the insurance industry to review the adequacy of the current assessment amount.

Status

The Ministry of Finance is undertaking to review the current assessment amount, as noted in the Minister’s August 24, 2013, policy statement.

The Auditor General's 2013 audit update on FSCO can be found here.

Monday 2 December 2013

Scarlett and Belair MIG Decision Overturned in Appeal

In the well known Scarlett and Belair case, the claimant was injured in an accident on September 18, 2010. He took the position that he while he did suffer sprains and strains, he also suffered from pre-existing conditions and subsequent psychological disabilities that took him out of the Minor Injury Guideline. After the accident, he was diagnosed with temporal mandibular joint (TMJ) syndrome.  Later there were additional diagnoses of chronic pain and psychological impairments.

In a preliminary issue hearing, the arbitrator found that the MIG is informational and non-binding that was not altered by its incorporation in the SABS.  He also found that the insurer had the onus of proving that the claimant had sustained a minor and and was subject to the $3,500 minor injury limit. In coming to his conclusion, the arbitrator also relied upon a number of cases, his own arguments, and his own English/French translations – without providing the parties the opportunity to make submissions.

The arbitrator's decision caused considerable angst within the insurance industry and a concern that the introduction of a monetary cap for treating and assessing minor injuries would not hold - a significant change introduced by the government in September 2010. However, the Director’s Delegate has allowed the insurer’s appeal in the Scarlett and Belair decision and more importantly confirms that guidelines incorporated in the SABS are binding.  This is important to establish considering the MIG is not the only guideline incorporated in the SABS.

Some of the key points raised in the Director’s Delegate’s decision:
  • The arbitrator failed to address why he found that the claimant’s chronic pain, depressive symptoms and TMJ disorder were separate and distinct from his soft tissue injuries and were not the sequelae thereof.
  • The arbitrator never addressed the test in the SABS of whether the claimant’s impairment was “predominantly” a minor injury.  The SABS recognizes that a claimant may have mutiple injuries but that does not automatically bring he or she out of the minor injury category.
  • The arbitrator erred in finding that the burden of proof lay on the insurer to show that the claimant was subject to the MIG. The burden of proof always rests on the insured of proving that he or she fits within a scope of coverage.
  • The arbitrator was incorrect in implying that $50,000 in medical and rehabilitation expenses was some sort of default coverage.
  • The arbitrator erred in finding that “compelling evidence” simply means “credible evidence”, finding that the word “compelling” means more than “credible”.  As well, the discussion of "credible evidence" was not relevant to this case.
  • The arbitrator erred in finding that the MIG was not binding because it was only a Guideline. The Director’s Delegate found that the MIG is binding because it was issued pursuant to section 268.3 of the Insurance Act, the definition of “MIG in the SABS refers to section 268.3, and the MIG is then applied in section 18 of the SABS, thereby incorporating the MIG into the SABS by reference.
  • The arbitrator should not have been conducting his own research and relying on cases and statutory provisions that he then raised on his own after the hearing, which did not provide the parties the opportunity to respond.
The Director's Delegate remitted the matter to a full hearing before a different arbitrator, on all issues as between the parties.  The new arbitrator may still find that the claimant's impairments fall outside the definition of "minor injury" in the SABS.  It may well be that because of the claimant's other impairments (TMJ syndrome and chronic pain), an arbitrator may find that the claimant's impairment was not predominantly a minor injury.  Should that be the case, hopefully the decision will be based on the policy intent of the 2010 reforms and the SABS.

Saturday 23 November 2013

Insurers Trying To Keep Claimants in the MIG Will Need Medical Reasons Before an IE

Insurers may be in a "Catch 22" situation in efforts to keep claimants within the limits of the Minor Injury Guideline (MIG).  Many insurers have been routinely sending claimants for an insurer examination (IE) to determine if a claimant has a minor injury and should be treated under the MIG. But according to a recent FSCO arbitration, an insurer needs to provide "medical reasons" for denying a benefit and requesting the claimant attend an IE.  The SABS require a benefit denial to trigger an IE needed to determine if the claimant belongs in the MIG but also medical reasons which insurers normally obtain through an IE.

In the decision, Kadian Augustin and Unifund Assurance Company [FSCO A12-000452] the arbitrator considered whether or not Ms. Augustin is allowed to dispute the insurer’s denial of treatment because she failed to attend an IE.  In order to make a determination the arbitrator needed to consider whether or not the IE was compliant with the SABS.

Unifund wanted to send Ms. Augustin to an IE to determine if she was within the MIG after receiving a treatment plan that, if approved, would take her out of the MIG.  Unifund provided the following notice to Ms. Augustin in their Explanation of Benefits: “Based on our review of the medical documentation provided to date, we require an assessment by an independent medical assessor, in order to determine if your impairment is predominantly a minor injury as described in the Minor Injury Guideline. Please see the Notice of Examination for further details.”

The arbitrator found that this explanation did not comply with section 38(8) of the SABS because it did not state that Unifund “believes” the MIG applies, or why.  Nor did it state the “medical reasons and all of the other reasons why the insurer considers any goods or services, or the proposed costs of them, not to be reasonable and necessary.  The arbitrator noted that it provided no reason, medical or otherwise, explaining why it refused to pay the benefit.

Health care providers have been complaining for some time that benefit denials often to not come with proper explanations regarding the reason for a denial.  The government has amended these provisions several times to make it clear that the claimant is entitled to a proper explanation.  Now an arbitrator has ruled on the wording.  The problem is that no one knows what explanation would satisfy an arbitrator.  As well, the arbitrator failed to reconcile that the purpose of the IE is to collect medical information and assist in making entitlement decisions.

The decision can be found here.

Saturday 9 November 2013

Interim Report of the Ontario Automobile Insurance Dispute Resolution System Review

The Interim Report of the Ontario Automobile Insurance Dispute Resolution System Review is now online.  The interim report provides an overview of the history and structure of the Ontario auto insurance DRS, the structure of auto insurance dispute resolution systems across Canada and in other jurisdictions and trends in the current Ontario DRS, including outcomes of recent court and arbitration decisions.  It also makes a few recommendations and sets out a possible framework for a future DRS.

The report recommends that mediation no longer be mandatory in its current form.  It suggests that the government consider introducing a new system that consolidates the strengths of the existing mediation and arbitration processes to facilitate a more efficient model for resolving disputes.

It also recommends that the government consider that FSCO’s DRS adjudicative functions be delivered externally. The final report will address whether the adjudicative functions should be established in an independent public sector tribunal or in the private sector.

The proposed model set out in the report would provide a process that takes no longer than six months from start to finish. Cases would follow a different stream based on the benefits in dispute and the complexity of the issues involved.

The process would begin with a benefit denial.  Every Ontario auto insurance company would have to establish a formal internal review process. A claimant wishing to dispute a benefit denial would first have to meet with their insurer to clarify why they believe the insurer was incorrect and present any new information to support their claim.

If the parties cannot resolve their dispute, the claimant would then be free to file an application with the new ADR body (whether in the private sector or within a tribunal) or perhaps they could access the courts at that stage. Cases using the court option would be subject to the rules and timelines of the court system.

If the claimant chooses ADR, a case manager serving as a gatekeeper to the process would review each application to determine whether the parties are ready to proceed through the system. The case manager would determine whether there are jurisdictional issues to be addressed and whether a proper exchange of documents has taken place. The case manager would have the ability to return the application if there were any outstanding issues.

Once everything is in order, the case would immediately be assigned to an arbitrator, who would arrange a mediation session within 45 days, which would be a hybrid of the current mediation process and pre-arbitration hearing. During this stage, the arbitrator might provide a non-binding opinion on the likely outcome; in other words, the mediation session could potentially be a more evaluative process. Should the mediation fail to produce a settlement, the arbitrator would immediately schedule a hearing for the parties.

The arbitrator would also perform a triage role at this point to determine whether the case should be subject to a paper hearing, an expedited summary in-person hearing or a full in-person hearing. For a paper hearing, the parties would submit their final positions in writing along with all supporting documentation, and the arbitrator making a decision based on a document review.

For an expedited in-person hearing, the parties would submit supporting documentation, including affidavits and expert reports. Although testimony and cross-examination could take place within set time parameters, the use of expert witnesses would not be permitted. Expedited hearings would take no longer than half a day.

More complex cases, such as catastrophic impairment determinations, would be permitted to make use of expert witnesses but still would be limited to a short timeframe.

The paper hearing would take place within 60 days of the mediation, while in-person hearings would take place within 90 days.

There would be rules established, perhaps in regulations, setting out timelines, sanctions for non-compliance and other provisions to ensure the parties follow the principles set out in this report. There should be a prohibition on adjournments in all but the most exceptional cases. The length and content of expert reports would be restricted.  Each case would be decided on the merits of that case alone. Arbitrators would be required to follow the policy intent of the regulations and the Superintendent’s interpretive guidelines.

Arbitrators would have discretion to assign costs to either side when warranted. Fees may differ depending on the type of hearing. Decisions should be issued within 45 days of an in-person hearing. For paper hearings, decisions should be issued within 30 days. The process from application date to the issuing of a decision would be four and a half months for paper arbitrations and six months for in-person arbitrations.

Appeals would be heard by a single judge of the Superior Court.

Thursday 7 November 2013

Auto Insurance Section of the 2013 Ontario Economic Outlook and Fiscal Review

The governments Fall Economic Statement included a section on auto insurance but did not include any new initiatives.   Instead, the government provided an update on current initiatives.

With respect to the government strategy to reduce Ontario auto insurance rates by 15 per cent on average within the next two years, the government gave FSCO the authority to require insurers to re-file new rates for FSCO approval. The government reports that insurers have started to file new rates with FSCO as a result of this new authority. The government also made the Superintendent of FSCO’s guidelines binding to help reduce unexpected costs.

The government expects that the January 2014 report on approved rates from FSCO will provide the first evidence that its strategy to reduce costs and rates is working.

Transforming the auto insurance dispute resolution system is another key element of the government’s cost and rate reduction strategy. The Province appointed former Associate Chief Justice of the Superior Court of Justice, the Honourable J. Douglas Cunningham, to lead a review and make recommendations on how to make this a more efficient and effective system.  Stakeholder consultations on the recommended legislative direction will be held in the coming months in preparation for the final report.

The government also committed to protecting consumers by continuing to ensure that insurer rate filings include rates that reward safe drivers and by helping to ensure that all regions of Ontario benefit fairly from cost savings.

The Ontario government is also continuing to crack down on auto insurance fraud to further benefit consumers. The government has already taken a number of actions to address key recommendations made by the Auto Insurance Anti-Fraud Task Force, such as a framework for licensing health clinics in the auto insurance system, and expanding the regulator’s investigation and enforcement authority.

FSCO has launched an Anti-Fraud Hotline will allow the public to play a greater role in combating fraud. Ontario has also added important information to the Ministry of Transportation’s Driver’s Handbook to help new drivers understand and prevent auto insurance fraud.

The government is also actively working to develop a province-wide system to oversee the towing industry. In the winter of 2014, the government will work closely with the sector, the Association of Municipalities of Ontario, the City of Toronto and other key stakeholders on the development of a proposed model. As part of this work, the government will also look at the issues of vehicle storage and collision repair practices.

In addition, the insurance industry is working to fight fraud. It recently announced the creation of Canadian National Insurance Crime Services (CANATICS), a new not-for-profit organization that will use data analytics to identify suspicious claims. The Task Force supported the use of data analytics to combat auto insurance fraud and recommended the creation of such an organization in its final report.

Insurance News - Thursday, November 7, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, November 7, 2013:

Tuesday 15 October 2013

Insurance News - Tuesday, October 15, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, October 15, 2013:

Ontario Government Consulting On Proposed Service Provider Regulations

The 2013 Ontario Budget included a commitment to introduce legislative amendments that would, if passed, "Give the Financial Services Commission of Ontario (FSCO) authority to license and oversee business practices of health clinics and practitioners who invoice auto insurers". This authority was included in The Prosperous and Fair Ontario Act (Budget Measures), 2013, which received Royal Assent on June 13, 2013. 

The legislation provides regulation-making authority consistent with recommendations made by the Automobile Insurance Anti-Fraud Task Force in 2012. 


The proposed regulations would prescribe:

- Licensing eligibility including grounds for unsuitability
- Designated principal representative eligibility requirements and duties
- Public registry information

Future proposed regulations would be expected to prescribe:

- Business/billing standards of practice
- Listed expenses (e.g. expenses covered by licensing)
- Expenses not covered by licensing
- Licence applicability
- Revocation/Suspension criteria and expedited process
- Licence surrender criteria
- Unfair or deceptive acts or practices
- Administrative monetary penalties
- Consequential amendments to the Statutory Accident Benefits Schedule (SABS) 


The Ontario government's Regulatory Registry is inviting stakeholders and interested parties to provide comments on these proposed regulations (that have yet to be made public).

The deadline for comments is November 24, 2013.