tag:blogger.com,1999:blog-7710886155806685107.post7169975347815131196..comments2023-06-06T09:57:02.881-04:00Comments on Ontario Auto Insurance Topics: The Amount of Fraud in OntarioWillie Handlerhttp://www.blogger.com/profile/06750152514615962622noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-7710886155806685107.post-66892884744382300782012-08-01T11:56:10.339-04:002012-08-01T11:56:10.339-04:00W.H.- "I'm not sure anyone has concluded ...W.H.- "I'm not sure anyone has concluded that there has been $1.3 billion in fraud annually for the past 20 years. It was been a frequently quoted figure that has achieved "urban legend" status."<br /><br /><br />Jethro - Endless insurer insiders have quoted that fraud loss figure every year since 1992 - probably about 10,000 times by now. And it is still being quoted (just last week). Whether it is a fact that has "merit" or is an "urban legend" - it has been driving Ontario the auto insurance evolutionary changes since 1992. <br /><br /><br /><br />W.H.- "In 2012 it would be a different figure because Ontario auto insurance claims costs have dropped over the past 2 years." <br /><br />Jethro - So why is the press still quoting that same figure in the media but now attributing it to the provincial auditor instead of the insurance lobby - its original source?<br /><br /><br />W. H. - "It is possible that past reforms may have inadvertently opened the door to fraudsters."<br /><br />Jethro - Over the long haul of the "evolution of reforms" from Bill 164 till McGuinty's 2010 gutting of injury benefits - how is it possible that the fraud loss number remained static. And given the benefits kept being reduced - why didn't the claimed (urban legend) fraud loss figure drop? Clearly - there is no causal relationship between gutting injury benefits and that unalterable, meritorious, claimed fraud loss figure.<br /><br /><br />W. H. - "No insurance system has completedly eliminated fraud but there are things you can do to control it."<br /><br />Jethro - Yes, but the thing that the insurers keep doing and the experts keep recommending is to cut the "rich" benefits so the fraud will decrease. You have been advocating for that approach since Bill 164 and the public is still being told (by the provincial auditor no less) that the 2011 $1.3 billion fraud loss means we need to cut the "rich" benefits. You see no holes in this stance? Would new ideas from fresh eyes (a Public Inquiry) be helpful?<br /><br /><br />W. H. - "I'm not sure another review would be of much benefit and would only duplicate what the Task Force has done over the past 12 months."<br /><br />Jethro - Isn't that what the industry and its consultants recently said about the Standing Committee? Following that logic the Task Force is only replicating the same "tightening up" of the system that has gone on for twenty years. In other words - it is merely duplicating the last twenty years of failed recommnedations put forward to reduce that $1.3 billion figure. And now, after twenty years of dubious numbers bases on legend we read in the press that Ontario auto insurance remains "vexed". How could a Public Inquiry hurt? What precisely is the industry's objection?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-7710886155806685107.post-22923959212751271792012-08-01T09:37:53.630-04:002012-08-01T09:37:53.630-04:00I'm not sure anyone has concluded that there h...I'm not sure anyone has concluded that there has been $1.3 billion in fraud annually for the past 20 years. It was been a frequently quoted figure that has achieved "urban legend" status.<br /><br />The KPMG makes references to earlier attempts to measure fraud including the 2007 IRC Report and the 2001 CCAIF Report which produced different results. In the end KPMG suggested fraud in 2010 was in the range of $800 million and $1.6 billion. In 2012 it would be a different figure because Ontario auto insurance claims costs have dropped over the past 2 years. <br /><br />The size and proportion of fraud within the system is not static but changes in response to product changes. It is possible that past reforms may have inadvertently opened the door to fraudsters. so hopefully the government has learned through this exercise that if or when it introduces future reforms it needs to consider how those changes will impact on the behaviour of those who will try to exploit the auto insurance system. No insurance system has completedly eliminated fraud but there are things you can do to control it.<br /><br />As for a Public Inquiry, I'm not sure what you have in mind. I see the Auto Insurance Anti-Fraud Task Force as an inquiry with the objective of tightening up the system. I'm not sure another review would be of much benefit and would only duplicate what the Task Force has done over the past 12 months. What you should be looking for is a quick implementation of the Task Force recommendations.Willie Handlerhttps://www.blogger.com/profile/06750152514615962622noreply@blogger.comtag:blogger.com,1999:blog-7710886155806685107.post-46157313860405305382012-07-30T16:37:39.002-04:002012-07-30T16:37:39.002-04:00Let's say, for the sake of argument that the $...Let's say, for the sake of argument that the $1.3 billion fraud loss figure was/is accurate. In other words, let's accept that each and every year since 1992 the Ontario auto insurers have lost $1.3 billion to fraud. The legislation has been completely rewritten three or four times since 1992. The regulations and SABS have been tweaked and tinkered to death - so as to put ever more "tools in the insurers' "fraud-fighting toolbox". How can it be that nothing has changed this fraud loss figure? How can it be that all the "tools" have turned out to be completely useless? Some of the same people have been involved in designing, implementing and regulating this twenty year long war on Ontario auto insurance fraud. And still we are stuck with a $1.3 billion per year fraud loss - now maybe even $1.6 billion according to KMPG. If we need proof of the need for a fresh look at this endless war on auto insurance fraud - that the $11.3 billion fraud loss number has "merit" is that proof. If ever there was evidence that new eyes and new ideas are required - this is it. In short - if it is true that the Ontario auto insurance annual fraud loss hasn't changed since 1992 - we need a Public Inquiry to find out why - and to finally find a way out of this vexing mess. It is too easy, and glib, to blame "overly generous", "rich" benefits as the magnet causing the $1.3 billion per year fraud loss. Setting aside the debate as to whether in fact we do have "among the richest" injury benefits in all of NA - these benefits have risen and diminshed and risen and diminished again and again over the course of the last twenty years. It is plain to see that whether we have the richest benfits in N.A. or the worst in Canada - clearly they have no causal relationship to this perenial, unalterable $1.3 billion per year fraud loss figure. Do you think it is time to call for a full Public Inquiry. If not - why not?Anonymousnoreply@blogger.com