Insurance News - Wednesday, July 31, 2013

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

• Ontario auto insurers are setting aside higher reserves because of rising litigation at the same time the government is committed to lowering rates by 15%.
• 90% of customers in Canada are satisfied with the settlement of their auto insurance claim according to a J.D. Power study.
• Toronto police are targeting e-bikes (they don't need to be licensed or insured) in an attempt to enforce HTA and city by-laws.
• A Claims Canada article headline is: MIG: Gone with the wind? Has the Scarlett decision really changed anything?
• Researchers are suggesting that obese drivers are less likely to wear a seatbelt and more likely to be injured in an auto accidents.
• California, New Jersey and Hawaii have auto insurance programs geared to drivers below the poverty line in order to keep them insured.  Would a similar program in Ontario reduce the number of uninsured drivers?
• You know all those stories about the risk of connected cars getting hacked and causing accidents?  Well read this story.
• Good news about drinking and driving campaigns, young Canadians heed the message and are using designated drivers.

Insurance News - Monday, July 29, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, July 29, 2013:

• Which U.S. city has the worst drivers? According to an informal survey it's Miami followed by Atlanta and New York. 
• Self-driving cars will set off an economic and cultural earthquake. 
• Making best use of social media within the insurance sector.
• British auto insurance rates have fallen by 9.8% after insurers get tough on fraud.
• The provincial government's attempt to address abuse by private clinics in the delivery of physiotherapy to seniors hits a roadblock. These same clinics operate in the auto insurance sector.
• Ontario by-elections are being held this week and Liberals are only leading in one riding. All of the contested ridings were held by Liberals prior to the by-elections.

Insurance News - Friday, July 26, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, July 26, 2013:

• Ontario auto insurance rates are to come down by 15% this year but they are going up 5% in Alberta. 
• If you think auto insurance fraud is bad in Toronto well Britain is considered the "whiplash capital of the world" with £1.1 billion in fraud in 2012.
• Then there is the Italian mafia gang making millions from car crash insurance scams.
• A cyclist found guilty of manslaughter for running down a pedestrian; could be the first such conviction in the U.S.
• The age of the connected car will bring new safety, comfort — and the threat of your car getting hacked.
• Did you know that different genres of music affect driving habits? So insurers may want to avoid drivers who listen to heavy metal and sports talk radio.

FSCO Mediation Backlog Will Soon Be Eliminated

Between 2007 and 2012 FSCO experienced an unprecedented 99 per cent increase in Applications for Mediation (from 14281 to 28,389), which resulted in a substantial backlog of files.

FSCO successfully implemented an aggressive action plan to address the backlog. This included initiatives such as the eCalendar, Consent Failures, mandatory settlement blitz days, and the use of a private service provider to supplement FSCO’s mediation and arbitration services. As a result, the mediation backlog has been substantially reduced from 29,142 files at the end of March 2012. In fact, the backlog will be eliminated by the end of August 2013.

 

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Insurance News - Wednesday, July 24, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, July 24, 2013:

• Deloitte report, Insurance Tech Trends 2013: Elements of Postdigital, says a convergence of five technology trends - analytics, mobile computing, social media, cloud computing and cyber liability - ultimately will reshape the way the insurance industry operates.
• Ministry of Health plans to shake up private physiotherapy sector on August 1 by diverting physiotherapy OHIP funding for seniors away from some large players (like Achieva, Centric Health) to LHNs and CCACs.
• U.S. consumer group says blue-collar workers and those without college degrees pay more for auto insurance.
• Paper by CNI Health Services: Malingering of Psychiatric Problems, Brain Damage, Chronic Pain, Controversial Syndromes in a Personal Injury Context. 
• American Civil Liberties Union claims that police are using licence plate readers to track and collect data on American motorists' location.  As a result, enormous databases of innocent motorists’ location information are growing rapidly. 
• Ontario Liberals are falling behind in recent polling and will likely lose at least 2 seats (in Windsor and London) in August 1st by-elections.  So will a Liberal set back impact on a possible fall election?
• On a related note, are the summer by- elections an exercise in voter suppression to give the Liberals a better shot at holding on to these ridings?

Insurance News - Monday, July 22, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, July 22, 2013: 

• One outcome of Superstorm Sandy was a drop in consumer satisfaction following a high number of total-loss auto insurance claims.
• Not only is Detroit bankrupt but it is a city where no one has auto insurance.
• Rhode Island governor signs bill limiting when insurers can declare a car a total loss into law to the strong objections to the insurance industry (see July 11 Insurance News update).
• Britain's Competition Commission will investigate auto insurance industry practices regarding physical damage repairs which has alleged to have increased premiums by £225 million a year.

Round 2 of Henry v. Gore Mutual, Claimant Wins Again

The Court of Appeal has released its decision in Henry v. Gore Mutual, unanimously upholding the motion judge’s decision on the meaning of the “economic loss” threshold under the post-September 1, 2010 SABS.

Henry v. Gore Mutual was the first court decision to deal with the SABS definition of "incurred expense" which was introduced on September 1, 2010.

Justice Ray found that as long as a family member providing attendant care sustains "an" economic loss, regardless of the amount of the loss, presuming the injured person pays, promises to or is obliged to pay for the attendant care, the insurer must pay "all reasonable and necessary attendant care".

In this case the actual economic loss was just over $2,000.00 per month. The family was claiming $6,000.00 as determined by a Form 1 submitted to the insurer. The Court found that test of "economic loss" was a threshold finding for there to be an "incurred expense", "but is not intended as a means of calculating the quantum of the incurred expense".

The Court of Appeal agreed with the motion judge and dismissed Gore’s appeal. The Court held that under the SABS, economic loss serves as a threshold for entitlement to (and not as a measure or factor in quantifying the amount of) reasonable and necessary attendant care benefits to be paid by an insurer.  The Court of Appeal refused to provide its own definition of “economic loss” despite Gore’s request to do so.

So what is the impact of these decisions?

I have been told by some in the insurance industry that the benefit payments are intended to be limited to the family member's economic loss. I've also been advised by the plaintiff bar that if a family member used $5 in gas to travel to the claimant then it allows them to claim the full attendant care benefit.

For almost several years I've expressed the view that neither of these interpretations would likely prevail. The intent of the SABS drafting was not to limit payments to the amount of the economic loss. If it had been different language would have been used. In fact during consultations on the Regulation in 2010, some insurers were concerned that the proposed definition was unfair if it limited family members from being compensated for providing attendant care services.

However, to suggest that any economic loss, even the most trivial one, would trigger thousands of dollars in benefit payments would also be contrary to the intent of the Regulation. In fact such an interpretation would make the definition meaningless. Justice Ray recognized that the drafters had intended to exclude non-professional caregivers if they did not incur an economic loss. In his decision he is clear that they type of economic loss that would trigger benefit payments was lost income.

However I am sure there will be lawyers that will take the arguments made in Henry v. Gore Mutual and try to extend it to other economic losses not just income loss. They may even suggest that the $5 in gas consumed to travel to the claimant qualifies as an economic loss under the definition. For now we have to rely on the courts to follow the original intent of the provision. 

Insurance News - Tuesday, July 16, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, July 16, 2013:

• Anatomy of a Florida staged accident ring where fraudster are after just $10,000 in medical benefits, not much different in Ontario.
• A PwC survey suggests that the following are the top international insurance risks: regulations, investment performance, macro-economic trends, business practices and natural catastrophes.
• Globe Commentary: Why insurance brokers routinely lose my business.
• This is one sordid auto insurance fraud case: Crooked doctor always used his injured hand to unhook my bra, mistress tells federal prosecutors.
• The downside of Big Data, U.S. data brokers are selling car locations for $10 online. 
• Jackson, Mississippi has a ‘Pothole Robin Hood’ who steals asphalt from city to fix pothole.  I think we can all share his frustration.
• If you think Toronto's July 8 storm was bad, South Carolina received 9" of rain on Saturday. The flood waters were so strong they washed cars off roads.

2nd Quarter Auto Insurance Rate Filing Approvals Drop By 0.09%

FSCO reports that rate filings approved during the second quarter of 2013 declined on average by 0.09%, based on the entire market. However, you can't really read too much into these figures since only about 25% of the market had new rates approved during the quarter and the majority of those involved no rate increase or decrease at all but rather re-adjusting their rates.  Only 5 companies had rate changes approved representing just 4.5% of the market.

With the government commitment to reduce rates by 15% in the backdrop, insurers have not been filing for rate changes but instead waiting to see how the rate rollback will play out.

The FSCO quarterly rate change announcement can be found here.

Insurance News - Monday, July 15, 2013

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

• New auto insurance verification in Mississippi to be rolled out in 2014 to reduce number of uninsured which estimated to be at 28%.  Fines expected to collect $150 million.
• A video of a clinical and forensic psychologist explaining how adjusters can identify, avoid and diffuse potentially violent situations in the field.
• In Columbia, South Carolina wants to get tough on drunk drivers and will pay tipsters $100 for reporting someone driving drunk.
• Hard to believe how low some people can stoop but here is a story about children being endangered in a string of staged accidents.
• Baseline Telematics and Saskatchewan Government Insurance are piloting world's first motorcycle usage-based insurance program.

Insurance News - Thursday, July 11, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, July 11, 2013:

• A Nova Scotia driver found guilty of killing teens while impaired by drugs may be the first conviction of its kind in Canada.
• Rate evasion takes place in states with high auto insurance premiums like New York, New Jersey and Florida where drivers buy insurance in another state.  It's also considered insurance fraud.
• Rhode Island insurers are lobbying the governor to veto a bill that would permits auto repair shops to deem a car repairable or a total loss.  They are concerned about the impact on rates.
• Earlier this week Hamilton police pulled over an 11-year-old driver who was out doing errands for his neighbour.  Police have since charged a 68-year-old female with permitting an unlicensed driver to drive a vehicle and having no insurance. 
• Here is the story behind the $200,000 Ferrari that was abandoned in Monday's flood.  It is owned by a lawyer who was in a hurry to get to a hearing in Ottawa.  He actually made it out of town.

Insurance News - Tuesday, July 9, 2013

Most of the news has focused on the Toronto storm yesterday but here some of the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, July 9, 2013:

• A self-driving Mercedes arrives in Canada this fall but lawmakers would prefer that drivers keep their hands on the wheel.
• Weed-stinking driver nabbed over the weekend doing 225 km per hour in Mississauga. Most weekends there are quite a number of these charges laid.  In one weekend in April there were 45 stunt driving and speeding charges in Ontario. 
• That was quite the storm yesterday and put a strain on homeowners, commuters and city personnel.  The most unusual would have to be Doug Ford spotted directing traffic at the corner of Dixon and Islington.  How is that for constituency work? 

•  Finally there was a $300,000 Ferrari abandoned on Lower Simcoe in a flooded underpass.  You don't see a floating Ferrari every day.

Insurance News - Saturday, July 6, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Saturday, July 6, 2013:

• South Dakota has some of the youngest drivers in North America so they now have a law bars drivers from ages 14 to 16 from using cell phones. 
• How is this for a big tort award?  Jury awards $43 million to a Vermont woman paralyzed in car crash.
• New Brunswick has merged financial regulators.  The new Financial and Consumer Services Commission will be responsible for securities, insurance, pensions, consumer affairs, co-operatives, credit unions, caisses populaires and trust companies.
• California offers a no-frills auto policy to low-income drivers. Those policies just got cheaper as rates fall in that state.  The no-frill policies start at $226.
• FSCO's final 2013 Statement of Priorities is now available online.  A list of auto insurance related priorities can be found here.
• Also last week FSCO launched an auto insurance fraud hotline (1-855-5TIP-NOW ) and a new fraud web portal.
• The Consumerization Of Risk Management: Using technology to allow drivers to reduce their own risk.
• Talk about big sinkholes.  A sinkhole in Ohio was so large it swallowed entire car and the driver needs ladder to climb out. 
• A new way to heal broken bones: 3D-printed casts. I wonder what impact they will have on claims in the long run.
• A Chinese man has to be King of the Scammers. He was involved in 334 staged accidents to scam insurers, that's one every three days for three years.

FSCO Releases Final Statement Of Priorities For 2013

Section 11 of the FSCO Act requires FSCO to deliver to the Minister of Finance and publish in The Ontario Gazette by June 30th of each year, a statement setting out the proposed priorities of the Commission for the fiscal year in connection with the administration of this Act and all other Acts that confer powers on or assign duties to the Commission or the Superintendent.

FSCO has released a final Statement of Priorities for 2013 which varies slightly from the draft released in April of this year. The changes largely reflect initiatves included in the provincial budget which passed last month.  Here is a summary of the auto insurance initiatives:

Design and implement an information technology Enterprise Development Program

• FSCO will develop a web-based information technology system offering integrated services to stakeholders by giving them one-window access for all of their dealings with FSCO.

Work with the Ministry of Finance to implement a cost and rate reduction strategy for auto insurance 

• FSCO will work with the Ministry of Finance on the implementation of legislative amendments from the 2013 Budget that commit to an average auto insurance rate reduction of 15 percent within a period of time to be determined by regulation, and provide the Superintendent with authority to require insurers to re-file their rates for approval.

Respond to the recommendations of the Auto Insurance Anti-Fraud Task Force

• FSCO is addressing several recommendations. It is working with stakeholders to develop a consumer engagement and education strategy, developing an anti-fraud hotline, and will continue to work with the Ministry of Finance to implement recommendations from the Task Force, as directed by the government.

Respond to Auditor General’s 2011 Value-for- Money follow-up audit

• The 2012 Ontario Budget included two initiatives that address the auditor’s recommendations.
• In 2013, FSCO will begin the next five-year review of the auto insurance system which will include a review of cost containment strategies and benefit levels in other provinces.
• FSCO considers several factors, including ROE, in reviewing the reasonableness of auto insurance rates filed by insurers.
• FSCO is expanding its auto insurance attestation.

 Enhance auto insurance information and analysis

• FSCO will conduct a closed claims study on third-party liability bodily injury claims in Ontario.
• FSCO will review the data available through the Health Claims for Auto Insurance (HCAI) system.

Review and implement requirements for usage based auto insurance

• FSCO is examining key regulatory issues and working with the auto insurance sector to ensure consumers are fairly treated when implementing voluntary usage-based auto insurance rating programs.

Work with Ministry of Finance on statutory and system reviews

• FSCO will lead a mandated five-year review of the auto insurance system and a three-year review of the auto insurance risk classification and rate determination regulations.
  

Develop Minor Injury Treatment Protocol 

• FSCO has retained medical and scientific experts to develop an evidence-based Minor Injury Treatment Protocol.

Work with the Ministry of Finance to develop and implement changes to the definition of Catastrophic Impairment

Work with the Ministry of Finance to complete a review of insurance company solvency regulation leading to recommendations for changes to the Insurance Act

Develop proposals to modernize disciplinary hearings for insurance agents and adjusters

• FSCO will consult on proposals to create a model that aligns with the modern disciplinary, licensing, and enforcement processes and standards used in the other sectors FSCO regulates.

Implement fraud awareness stakeholder engagement strategy

• FSCO will expand its fraud awareness social media outreach across all its regulated sectors.
• FSCO will partner with law enforcement, the Ministry of Finance, the Ministry of Consumer Services, and industry associations in joint fraud awareness activities.

Work with other auto insurance rate regulators on common rate filing issues and requirements

Insurance News - Tuesday, July 2, 2013

We are in the dog days of summer still I bring you the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, July 2, 2013:

• The Florida Supreme Court rules new 'examination under oath' provision does not apply to cases before the new laws took effect as Florida continues to struggle with implementing auto insurance reforms.
• Distracted walking is the new public safety problem as injuries soar for pedestrians on phones.
• Alberta to see huge write off of water-logged vehicles but hopefully those vehicles don't find end up being bought by an unsuspecting consumer.
• Wireless vehicle networks such as the one being piloted in Ann Arbor, Michigan could make driving safer and more efficient but the cost of deployment will be significant.