Insurance News - Wednesday, February 26, 201

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, February 26, 2014:

• Distracted driving fines in Ontario increase to $255 on March 18 - the highest in Canada.
• Potholes are eating away at municipal budgets just about everywhere.
• If your car is damaged from driving over a pothole in the City of Toronto, this is how to make a claim.
• Yet another attempt by Michigan at auto reforms. A new proposal would pair a mandatory two-year, 10 percent rate reduction with a cap on personal injury protection coverage.
• Older driver accident rates going down not up because cars are safer and seniors are healthier.
• Can the driver of an automatic car be charged with a DUI?

Insurance News - Saturday, February 22, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Saturday, February 22, 2014:

• Ontario's 15% rate rollback has started strong insurer interest in telematics as a mechanism to control claim costs and expenses.
• Louisiana is considering auto insurance reforms to address the "soft tissue industry" in New Orleans.  Sounds familiar.
• The most expensive U.S. cities for auto insurance are in states with no-fault car insurance laws.
• This is a good way to kill telematics: UK Insurers sending their own speeding tickets to policy holders with telematics.
• It appears that in the future my office will likely move to my car once it's able to drive itself so I can answer all those emails. 
• Another article on how vehicle-to-vehicle communication could revolutionize auto insurance.

Are Insurers Having Difficulty Keeping Claimants in the MIG?

I previously reported that based on HCAI data that it appears the minor injury definition was holding up.  However, that doesn't mean claimants are remaining in the Minor Injury Guideline (MIG).  I would like to continue to examine data related to minor injuries.

Again the information is based on first set of standard HCAI reports which were published by the IBC in December 2013.  The standard reports are published on an “accident half year” basis. In accident half year statistics, the experience of all claims with accident dates in the same accident half year is grouped together. The accident half years are defined as calendar half years, with January to June being the first half and July to December being the second half for each of the stated years.

The chart below provides some insight into what might be happening to MIG claims over time.  Although as many as 75% of claims are classified as strains and sprain and should fall under the minor injury definition, only a fraction of those claims receive MIG treatment only.  A majority of those claims actually receive treatment within the MIG and additional treatment outside the MIG.  One might conclude that the situation has been improving over time since each accident half year, fewer claims are receiving both MIG and non-MIG treatment.  However, the newer claims are likely still open and many of those in the MIG only category could move over time into the MIG and non-MIG category.

This doesn't necessarily mean that insurers are having a serious problem keeping claimants categorized as having minor injuries.  The MIG provides up to $2,200 in treatment but the SABS caps medical and rehabilitation expenses for minor injuries at $3,500.  So many of the claimants receiving both MIG and non-MIG treatment may topping up to the $3,500 cap.  In fact, the average amount paid per claimant in each accident half year never exceeds $3,500 for those receiving both MIG and non-MIG treatment.  You will have to make your own conclusion whether claimants are escaping the minor injury cap.  I would suggest that it might not be a problem.

Cunningham Report Recommends a New Tribunal to Deal With SABS Disputes

I assisted Justice Douglas Cunningham carry out his review of the Ontario auto insurance dispute resolution system (DRS).  His report was recently submitted to the government and included 28 recommendations which if implemented would remove the system from Financial Services Commission of Ontario (FSCO) and create a new government administrative tribunal.

A New Tribunal

Arbitrators would no longer be Ontario public servants but government appointees, similar to adjudicators on a number of other government tribunals.  The Insurance Bureau of Canada and a number of member companies proposed that the entire system be privatized.  Cunningham’s report did recommend some private sector involvement. He proposed that the tribunal establish tendered contracts with one or more private-sector dispute resolution service providers to address any future backlog.

A More Streamlined Process

Cunningham’s report envisions a radically streamlined and quick process.  The report recommends that an insured who submits an application to the proposed tribunal would have an arbitrator’s decision within 6 months if the dispute proceeds to arbitration.  The tribunal would have a registrar who would deal with jurisdictional issues at the time the application is received without a hearing. 

As well, doing away with many of the preliminary hearings that currently take place, Cunningham recommends that pre-arbitration meetings, neutral evaluation meetings (a step that hasn’t been used since 2008) and appeals to the Director’s delegate be eliminated. 

An End to Mediation

A significant change found in the report is the elimination of mandatory mediation as the first step in the dispute resolution process.  Instead, a settlement meeting would be scheduled with an arbitrator rather than a mediator.  This step would have elements of mediation as well as the current pre-arbitration meeting. 

The report also recommends doing away with telephone mediations.  Instead settlement meetings would have to take place in person or through video conferencing.

During a settlement meeting, the arbitrator might provide one or both parties with an opinion regarding the likely outcome of a future arbitration if the parties fail to reach a settlement.

Three Arbitration Streams

Justice Cunningham has called for three arbitration streams: paper reviews, expedited in-person hearings and full in-person hearings.  The determination would be made by an arbitrator and not be subject to appeal.  A paper review would take place cases where there are $10,000 or less of medical and rehabilitation benefits in dispute, or where the dispute involves a determination as to whether the claimant’s injuries meet the minor injury definition.  The tribunal would be expected to restrict the length of expert reports and briefs. 

Arbitration hearings would be conducted as an expedited in-person hearing in cases that do not qualify as either a paper review or full in-person hearing.  An expedited in-person hearing would last no longer than one day and the arbitrator would let parties know how much time would be allocated for them to present their cases.

Arbitration hearings would be conducted as full in-person hearings for disputes involving catastrophic impairment determinations, whether the claimant qualifies for 24-hour attendant care or income replacement benefit claims beyond 104 weeks.  The length of a full in-person hearing would be determined by the arbitrator. 

The arbitrator’s report should be no longer than five pages for an expedited hearing and ten pages for a full hearing.

Appeals of arbitration decisions should be heard by a single judge of the Ontario Superior Court of Justice on a question of law. 

New Penalties for Those Not Meeting Timelines

The report recommends a number of timelines that would be incorporated in legislation along with penalties for those that do not comply.  Parties who cannot commit to appear for settlement meetings or arbitrations within the timelines set out would not be eligible to claim their costs at arbitration.  If the tribunal is unable to schedule an arbitration within those same timelines, the tribunal would be expected to reduce the arbitration fees it collects from the parties.  Parties would also get financial relief if arbitration decisions are late being issued.

A Shift in Culture

Justice Cunningham made it clear he would like to see a change in culture within the DRS.  A number of recommendations are expected to accomplish that cultural change.

Every insurer would have to establish an internal company review process and be required to inform an insured how to access the process following a benefit denial.  However, insureds would not be required to use the internal company review process before submitting an application to the new tribunal.  Companies would be free to determine how their internal review process would to be structured, but must provide an insured with a written response within 30 days.

Justice Cunningham recommends that the settlement of future medical and rehabilitation benefits should be prohibited until two years after the date of the accident which is one year longer than the current prohibition. 

The government would be expected to create a sliding scale of fees.  Justice Cunningham proposes that incentives be introduced to encourage parties to settle early. 

Experts would be required to certify their duty to the tribunal and to provide fair, objective and non-partisan evidence.  Arbitrators would be expected to ignore evidence that was not fair, objective or non-partisan and, in those circumstances, the expert would not receive compensation for appearing as a witness.

What Happens Next

In January 2014, the government indicated that it will propose legislative amendments in the spring session based on recommendations of the Dispute Resolution System Review.  However, the legislation may not pass if a spring election takes place.  Once legislation finally passes, it will take some time to establish a new tribunal which means DRS users may be waiting some time before they benefit from possible changes.

Insurance News - Monday, February 17, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, February 17, 2014:

• Colorado ride-sharing bill is raising concerns that it will lead to higher auto insurance rates.
• Toyota issues recall for 1.9 million Prius cars over software glitch - so what are the implications for self-driving cars?
• It seems that Canadians are some of the most loyal insurance customer. 
• Co-operators is reporting that 2013 net income is down over the previous year because of Alberta and Ontario storms and the state of Ontario auto insurance.
• The Ontario legislature is backing in session on Monday but for how long? Get ready for a possible Ontario spring election as politicians return from long Christmas break.

HCAI Data Confirms Ontario's Minor Injury Definition is Holding Up

In December 2013, the IBC published the first set of standard HCAI reports. The document provides over 60 pages of aggregate data collected by HCAI going back to 2011 up to the first half of 2013.  HCAI was made mandatory on February 1, 2011. 

The standard reports are published on an “accident half year” basis. In accident half year statistics, the experience of all claims with accident dates in the same accident half year is grouped together. The accident half years are defined as calendar half years, with January to June being the first half and July to December being the second half for each of the stated years. 

The chart below breaks down the percentage of claimants receiving treatment per injury group. The data is further broken down by accident half year and the percentages are based on claims transactions between the accident date and June 30, 2013.

The data suggests that there doesn't appear to be any erosion of the minor injury definition.  For accidents during the first half of 2013, 75.4% of claimants receiving treatment have strains and sprains which fall under the minor injury definition.  The data suggests that the percentages have not varied greatly from one period to the next with the exception of strains and sprains and peripheral nerve injuries (many are likely WAD III).    

Insurance News - Tuesday, February 11, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, February 11, 2014:

• The Toronto Police Service are using a hearse as part of a distracted driving campaign.
• The Ontario Superior Court reduces contingency fee from 40% to 30% in medical malpractice case.
• After the California regulator pointed out that there may be holes in coverage, ride-sharing company starts offering new optional collision and uninsured or underinsured driver coverage.
• Nearly one-quarter of consumers would consider purchasing insurance from Google or Amazon.
• A Colorado state representative wants insurance fraud to be a felony.

Insurance News - Monday, February 10, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, February 10, 2014:

• Hearse being used in Toronto Police distracted driving campaign.
• Recent SABS changes criticized in Toronto Sun opinion piece - but how do you think the government will deliver its 15% rate reduction commitment?
• One year after Florida PIP reforms, regulator estimates auto insurance rates to fall an average of 13.2% due to a reduction in fraudulent claims.
• Insurance claims departments are probably two decades behind all the analytics that have been done on the pricing and underwriting side.
• User-based auto insurance to become one of the most common types of policy in the near future.

Insurance News - Saturday, February 8, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Saturday, February 8, 2014:

• Will the Ontario government's 15% rate reduction strategy speed up the growth of user-based auto insurance in Canada?
• One in six parents are committing auto insurance fraud by claiming to be the primary driver of a vehicle used mainly by their student daughter or son. 
• California regulator warns about gaps in ride-sharing insurance after a deadly accident shows the murky legal terrain in which these ride-sharing services operate.
• U.S. Senator presses technology firms and automakers to develop distracted driving solutions.
• Forget self-driving cars, Renault wants to put a flying drone on the roofs of cars to warn about traffic jams and other problems on the road ahead.

Insurance News - Wednesday, February 5, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, February 5, 2014:

• The technology going into a self-driving car is about $320,000.  Will I ever be able to afford one? Or will I be still driving when they become affordable?
• The Ontario Ministry of Transportation is introducing new tests for drivers who are 80 and over including cognitive tests effective April 21.
• WARNING: The Driver Ahead Of You Is Awful (This Message Brought To You By The U.S. Government).  The U.S. plans to propose standards for talking cars as technology companies are vying to build architecture for the "Internet of Cars."
•  If you think auto insurance is expensive in the GTA, average rate in Detroit is $10,732.  Some other U.S. cities are also higher than the GTA.
• Clients have a say in resolving insurance disputes at The Co-operators through Service Review Panels.  Do other insurers also have unique dispute resolution processes?