Insurance News - Monday, March 21, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, March 21, 2016:

• Nova Scotia will allow drivers to voluntarily pay back their insurer for minor damage and have the accident registered as not at-fault.
• Existing U.S. laws pose few barriers to adoption of autonomous vehicles so long as they allow humans to take control.
• Undercover investigators hired by Aviva capture alleged car insurance fraud on video.
• Uber to begin replacing drivers with 100,000 Mercedes-Benz S-Class self-driving cars starting in 2020.
• Google wants U.S. Congress to create new federal powers that would let the technology giant receive special, expedited permission to bring to market a self-driving car that has no steering wheel or pedals.

LAT Will Not Be Following All of the Cunningham Recommendations

The Licence Appeal Tribunal (LAT) begins accepting applications to resolve auto insurance disputes on April 1, 2016.  LAT has completed a first round of recruitment for adjudicators and case management staff.  Adjudicators are Order-in-Council appointments.  Training of adjudicators and staff is underway.

FSCO will continue to operate beyond April 1, 2016.  If mediation has been completed, but the arbitration process has not begun, a party can apply to LAT and begin the new process.  If the case already has been assigned an arbitration case number by FSCO, the case remains at FSCO.  Existing cases will not be transferred from FSCO to LAT.

Although the new system follows the recommendations put forth by Justice Cunningham in 2016, a number of recommendations have been modified: 

Justice Cunningham recommended that mandatory mediation (along with pre-arbitration hearings) be eliminated and that a settlement meeting be held before arbitration (Recommendations #4 and #13).  LAT has created a case conference prior to arbitration which follows the intent of settlement meetings proposed by Cunningham.

Justice Cunningham recommended that statutory timelines and sanctions regarding settlement meetings, arbitration hearings and the release of arbitration decisions be created (Recommendation #6).  However, no statutory timelines have been created and LAT will manage timeline requirements.  This is essentially the status quo.

Justice Cunningham recommended that the policy of no application fees for claimants at the settlement meeting stage be continued (Recommendation #7).  LAT has introduced a $100 application fee.

Justice Cunningham recommended that settlement meetings be conducted by video conferencing rather than by telephone in cases where it is not feasible for the parties to meet in person (Recommendation #14).  LAT is continuing the current practice and most case conferences will take place over the phone.

Justice Cunningham recommended an adjournment fee be charged to the party requesting an adjournment in the absence of exceptional circumstances (Recommendation #16).  No adjournment fee has been established.

Justice Cunningham recommended that the settlement of future medical and rehabilitation benefits be prohibited until two years after the date of the accident (Recommendation #17).  The SABS have not been amended and settlements will still be permitted one year after the date of the accident.

Justice Cunningham recommended that each insurer establish an internal review process (Recommendations #19, #20 and #21).  A company internal review process has not yet been established.

Justice Cunningham recommended criteria for streaming disputes to paper reviews, expedited in-person hearings and full in-person hearings (Recommendations #25, #26 and #27).  The criteria have not been adopted.  LAT adjudicators will exercise his or her discretion to determine the format of a hearing, which is the status quo.

Below is the full dispute resolution process: 

Insurance News - Wednesday, March 9, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, March 9, 2016:

• It was inevitable that a Google self-driving car would cause an at-fault accident.  A Google car got into a minor fender-bender struck a bus on a city street and Google admits fault.
• Fleets of coordinated, self-driving cars could bring an end to parking as we know it and help make our urban future cheaper, greener and much more pleasant.
• With driverless cars soon to be a reality, should humans be allowed to drive?
• Mississauga city councillors vote to halt Uber services while they debate a solution.
• This is an interesting article on how self-driving cars may be following similar path as elevators.

Insurance News - Monday, February 29, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, February 29, 2016:

• Bramalea-Gore-Malton MPP Jagmeet Singh wants industry profits used to drive down auto insurance rates.
• The U.S. National Highway Transportation and Safety Administration told Google that the artificial intelligence system that controls its self-driving car can be considered a driver under federal law.
• Uber has agreed to pay $28.5 million to about 25 million passengers to settle two San Francisco class actions over the way it advertises its services.
• Google is killing off the car-insurance comparison tool that it rolled out last year.
• Uber's popularity is prompting Canadian insurance companies to introduce coverage for drivers carrying paying passengers in their personal vehicles.

Electronic Proof...Still Not in Canada

Three years ago, I wrote an article about the status of electronic insurance cards.  Despite the fact that smartphones, tablets and other technological gadgets are now part of everyday life, providing proof of auto insurance coverage is like a nostalgic trip back to the days of our parents or grandparents.  In Canada,insurance companies and brokerages continue to mail, fax and e-mail copies of the standard pink insurance slips to policyholders upon renewal or policy changes.

Back in 2012, the Property Casualty Insurers Association of America (PCIAA) reported that 11 U.S. states had laws or regulations on the books that allow for electronic insurance cards to be used for both vehicle registration and when being pulled over by the police.  The PCIAA now reports that 43 U.S. states have enacted legislation which permits some form of electronic proof of insurance including electronic delivery and the use of an electronic image as evidence of coverage.  Clearly, electronic insurance cards are well accepted in the U.S.

Why is the U.S. and Canadian experience so different?

For one thing, not all Canadian jurisdictions use the standard 'pink slip.'   The public insurers in British Columbia, Manitoba and Saskatchewan have combined the insurance card with and the provincial motor vehicle registration card.  Quebec is a little different because private insurers sell physical damage coverage and must provide an insurance certificate.  There is no colour requirement and the document can be emailed, although electronic proof of insurance is still not permitted.

In Canada, there has been a perception that electronic delivery of insurance cards or electronic proof of insurance might be more at risk to fraud.  In fact, the paper insurance card is quite susceptible to fraud.  Police officers have no way to validate whether a pink slip provided by a driver is valid and unexpired, and therefore are inclined to just accept it.  

There are also concerns regarding privacy and liability.  When a driver hands over his or her mobile device to a police officer to show proof of insurance, can the officer access other information on the device?  What happens if the police officer drops and damages a mobile device while verifying insurance coverage?  Who Is liable for damages?

The U.S. experiences provide numerous examples of statutory or regulatory approaches to addressing these issues.  In Canada, many legal barriers to e-commerce have been eliminated.  Yet the insurance sector has clung to paper insurance cards. 

In Ontario, there is no legislative requirement that insurance cards be in paper form.   The Compulsory Automobile Insurance Act (sections 3 and 6) requires that a driver must always have an insurance card in their vehicle and must make it available to a police officer for inspection.  It does not stipulate what the card is to look like.  The Ontario Superintendent of Financial Services sets out the content, size and colour of the insurance card through a bulletin.  Consequently, the Superintendent has the authority to approve an electronic insurance card.  No statutory amendment is likely required.

It is inevitable that electronic proof of insurance will come to Canada. The technology exists.  It just seems that no one particularly wants to be the first to make the move.

Insurance News - Friday, February 12, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, February 12, 2016:

• Trial lawyers and victims group call for inquiry into the use of medical evidence by auto insurers in insurance claims.  Personally, I believe this is symptomatic of a much bigger problem.
• A startup at the Massachusetts Institute of Technology hopes to replace insurance agents with artificial intelligence and make buying auto insurance as easy as texting a photo of your license plate.
• Uber lost its bid to freeze a lawsuit bound for trial over California drivers’ demands to be treated as employees while the company appeals rulings that dramatically increased the stakes in the case.
• A recent Usage-Based Insurance (UBI) study forecasts that 380 million semi, highly or fully autonomous vehicles (AVs) will be on the road by 2030. In the decade preceding 2030, the penetration of active safety and autonomous vehicles will reduce the number of accidents by more than 30%, leading to a significant reduction in insurance premiums.
• Uber is piloting a new way to check the quality of its drivers — by monitoring their driving, speed and distractedness via their smartphones, using the devices’ geolocation information, accelerometers and gyrometers (which reveal whether a person is, for example, moving their phone around while driving) - essentially a telematics application.

Insurance News - Thursday, February 11, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, February 11, 2016:

• Developers of driverless cars promise fewer deaths and injuries from car accidents.That could also mean fewer cases for lawyers who handle auto injury litigation, but opinions differ on how much of a threat driverless cars pose to lawyers' livelihoods.
• The guy who solved Uber’s insurance problem has no insurance background.
• Google is disappointed to learn that driverless cars will need a driver in CaliforniaThe state's Department of Motor Vehicles wants someone behind the wheel in case something goes wrong.
• Meanwhile, the National Highway Transportation and Safety Administration told Google that the artificial intelligence system that controls its self-driving car can be considered a driver under federal law.
• Edmonton will become the first Canadian city to allow ride-sharing companies like Uber to legally operate after city council approves a ride-sharing bylaw.

Insurance News - Wednesday, January 27, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, January 27, 2016:

• Kathleen Wynne says pledge to cut auto insurance 15 per cent was a ‘stretch goal’ - classic govt speak!
• Ontario's finance minister is hard-pressed to explain why he continued to declare publicly that the government would meet an election pledge to cut auto insurance rates despite being aware that keeping the promise would be challenging.
• Canadians are wary of self-driving cars.  They would rather see technology make driving safer.
• Google's monthly report for its self-driving car project is in, and according to data recorded by onboard computers, the car's human drivers intervened 13 times between September 2014 and November 2015 to avoid an accident.
• Is State Farm preparing for the end of auto insurance?
• The biggest roadblock facing driverless cars is not government regulation but lawyers.
• Windsor wants to become test site for self-driving vehicles.

Insurance News - Tuesday, January 26, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, January 26, 2016:

• Town of Stratford has built connected infrastructure to attract self-driving cars for testing over the past decade.
• Uber's impact being felt as San Francisco's largest cab company Yellow Cab to file for bankruptcy.
• Why baby boomers embrace sensor-driven cars, but doubt self-driving cars.
• While claiming their self-driving cars have not caused an accident, Google also reports self-driving car mistakes: 272 failures and 13 near misses.
• Google wants to form more partnerships with automakers and suppliers in 2016 to accelerate work on self-driving cars.
• Obama boosts self-driving car development with $4 billion investment.

Ontario's Failed Rate Reduction Strategy

The promise to reduce auto insurance premiums by 15% is a failure.  

In August 2013 the Ontario government announced a two-year rate reduction strategy. What has ensued since that announcement has been a series of reforms to bring down the cost of insurance. Many of those reforms include no-fault accident benefit reductions.  

So how successful has the strategy been?  Last week FSCO posted the fourth quarter rate approvals for 2015. The FSCO post indicates that rates fell a minuscule 0.15% in the quarter. For the entire year, rates fell by just 1.0%.  Since August 2013, rates have only come down by 7.1%.  That's not even half of what the government has been trying to achieve.

Premier Kathleen Wynne now calls the 15% rate reduction strategy a "stretch goal".  That's as close as you're going to get a government to admit to failure.  

Another round of no-fault accident benefit cuts are to be introduced on June 1 of this year but don't expect them to bring down rates by a significant amount. The accident benefits portion of the Ontario in 2014 was only 33.5% of claim costs (see the chart below).  That would mean for a further 8% reduction in premiums, accident benefit costs would have to go down by about 24%.  Meanwhile, some of the accident benefit cuts will drift over to third party liability costs since not at-fault accident victims will be able to sue for benefits no longer available through no-fault.

It's time the government undertake a comprehensive review of the auto insurance system and resolve the systemic problems plaguing the system.  Half measures lead to "stretch goals" and chronically high insurance premiums.

Insurance News - Monday, January 11, 2016

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, January 11, 2016:

• Sidecar, the third-biggest U.S. ride-sharing service, has ceased operating as the company is squeezed out by better-known competitors Uber and Lyft.
• Plaintiff’s lawyers are encouraged at the prospects for big court awards from accidents self-driving cars. With no one behind the wheel, lawyers say they can go after almost anyone even remotely involved.
• General Motors and ride-sharing company Lyft are forming an unprecedented partnership that could help them beat their rivals to the self-driving future.
• The big data of bad driving, and how insurers plan to use technological to assess risk and set premiums.
• Aviva Insurance plans to support Uber drivers in Canada with special coverage, a move that could give comfort to users of the ride-sharing service, and one that will likely disrupt the taxi industry further.

Ontario Moves Forward with Regulating the Towing Industry

Ontario consumers and insurers have had many long-standing complaints about the practices of towing operators.  Back in 2012, the Auto Insurance Anti-FraudTask Force, created by the Minister of Finance, recommended a number of changes regarding the regulation of towing services.  Last year the Ontario Legislature passed Bill 15, a wide-ranging piece of legislation that will have a significant impact on the towing industry. 

Changes will be made to the Consumer Protection Act and its regulation, establishing tow and storage-specific consumer protection measures effective January 1, 2017. They will require tow and storage providers to:

• Get permission from a consumer or someone acting on their behalf before providing tow and storage services.
• Record the name and contact information of the consumer, along with the date and time of authorization.
• Disclose certain information to the in writing, such as the provider's business name, contact information and address where the vehicle will be towed.
• Accept credit card payments, in addition to cash, from consumers.
• Provide an itemized invoice, listing services provided, the cost for each service, and the total cost before demanding or receiving payment.
• Make available a current statement of rates at their place of business and on any existing website.
• Post other information, for example, the provider's name and telephone number on the side of a tow truck, at all business premises and on any website.
• Provide a consumer with access to the towed vehicle, at no charge, so that they may remove personal property from the vehicle.
• Prohibit tow and storage providers from recommending repair and storage facilities, legal service providers or health care service providers unless a consumer specifically asks, or the provider offers to make a recommendation and the consumer agrees.
• Disclose to a consumer whether the provider is getting a financial reward or incentive for providing a recommendation for towing a vehicle to a particular storage or repair shop.
• Establish minimum insurance coverage including general liability insurance of $2 million, customer vehicle insurance of $100,000 and $50,000 cargo insurance.
• Maintain authorization and disclosure records, invoices, copies of insurance policy, and current statement of rates for three years.                                         

There are some exemptions, such as, if services are provided under a prepaid agreement or membership in an association, such as the Canadian Automobile Association (CAA) where the consumer is not being charged for the specific service being provided.  These exemptions will also apply when the tow and storage services are provided when a vehicle is purchased or leased and the consumer is not charged for the specific service being provided.

The Repair and Storage Liens Act deals with the rights of repairers and storers to claim a lien against vehicles they repaired and/or stored.  Most of the changes to the Repair and Storage Liens Act will take effect on July 1, 2016 The new regulations are designed to eliminate overcharging for vehicle storage and make it easier for vehicle lien holders to find out that the vehicle is in storage in the first place. 

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Changes to the Repair and Storage Liens Act and its regulation will:

• Reduce the notice period from 60 days to 15 days for vehicles registered in Ontario. The new rules are expected to improve storage practices and remove associated costs from the auto insurance system.
• If the notice is not provided, a lien is limited to the unpaid amount owing for the period of 15 days from the day of receiving the vehicle.
• Provide guidance to courts in determining the "fair value" of repair or storage where no amount has been agreed upon. A list of discretionary factors (e.g., fixed costs, variable costs, direct costs, indirect costs, profit and any other relevant factors) is set out for consideration.

 Finally, the government is adding regulations under the Highway Traffic Act that will bring tow trucks under the Commercial Vehicle Operator's Registration (CVOR) system. Tow trucks and other towing vehicles will require a CVOR certificate.  The CVOR system is used to track the safety of truck and bus operators in Ontario.  This new regulation will come into effect on January 1, 2017.

Under CVOR, tow operators will be responsible for all the drivers and vehicles in their operation. These responsibilities include:

• Monitoring the conduct and safety performance of drivers.
• Resolving driver safety issues when they are identified.
• Keeping vehicles in good, safe condition at all times.
• Ensuring load security. 

Tow trucks will continue to be exempt from some requirements faced by other classes of vehicle under the CVOR system, such as hours of service limits, daily inspection, detailed recordkeeping requirements and entering truck inspection stations, until the government has concluded consultations with the towing industry and other stakeholders on an effective regulatory regime for tow trucks.

Happy New Year

Thank you for visiting my site throughout the year.

Willie Handler

Insurance News - Wednesday, December 30, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, December 30, 2015:

• City of Toronto won’t block Uber’s new $5 commuter service but it is doing a legal review.
• Another legal battle for Uber as the Seattle city council votes to treat Uber drivers as employees by giving them collective-bargaining rights.
• California sets rules for self-driving cars; must have steering wheel and licensed driver behind the wheel. Google is not happy.
• Google plans to make its self-driving cars unit, which will offer rides for hire to compete with Uber, a stand-alone business under the Alphabet Inc. corporate umbrella in 2016,
• The self-driving car, that cutting-edge creation that’s supposed to lead to a world without accidents, is achieving the exact opposite right now.  Because driverless cars obey the laws, humans don't so much.
• Google and Ford are about to announce they are forming a partnership to build self-driving cars.
• Wawanesa Insurance is asking policy holders if they are driving for Uber. And cancelling policies if the answer is yes.

Insurance News - Sunday, December 27, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Sunday, December 27, 2015:

• Studies suggest that insurance customers will walk away if purchasing insurance is slow, complicated and difficult.
• The $75,000 problem for self-driving cars is going away as the cost of LIDAR sensors drop.
• Self-driving cars can lure drivers into false sense of security and even lull them to sleep.
• If you want to know why Uber ignores regulators and not intimidated by law suits?  Because they are worth around $85 billion.
• Uber is testing out food delivery in Toronto.  
• Uber is also trying out commuter service to compete with the TTC.
• In Uber fight, taxi drivers on wrong side of history – and consumerism.

Government Posts Proposed Changes to DRS Regulations

The Ministry of Finance has posted proposed changes to Insurance Act regulations to provide for the transition the Automobile Insurance Dispute Resolution System from the Financial Services Commission of Ontario (FSCO) to the Ministry of the Attorney General's Licence Appeal Tribunal (LAT), and the wind down of disputes filed at FSCO. 

Proposed amendments include:

 • The last date for submitting applications for mediation, neutral evaluation, or the appointment of an arbitrator to FSCO will be March 31, 2016. 

 • An application for an appeal to the FSCO Director of Arbitrations will only be accepted where the application for the appointment of an arbitrator was received by March 31, 2016. 

 • As well, an applications for a variation or revocation to the FSCO Director of Arbitrations will only be accepted where the application for the appointment of an arbitrator was received by March 31, 2016. 

 • The Office of the Director of Arbitrations will continue to function until all notices of appeal and all applications for variation or revocation have been finally determined. 

 • Statutory Accident Benefits Schedule (SABS) provisions that apply to the dispute resolution process at FSCO will continue to apply, as they read on March 31, 2016, to all applications that were received by FSCO before the transition date but are not finally determined before that date. The SABS will also be amended, where necessary, to apply to applications filed at the LAT on or after April 1, 2016.

Competition Bureau Supports Ride-Sharing Services

The emergence of Uber and other ride-sharing services has created increased competition for the Canadian taxi industry.  This has created a source of friction for the industry because of what they see is an "uneven playing field."  Taxi operators are required to follow regulatory rules while ride-sharing services largely operate unregulated.  The Canadian Competition Bureau recently weighed in on the subject.

The Competition Bureau recently released a study, Modernizing Regulation in The Canadian Taxi Industry, which concluded that the competition in the sector has benefited consumers.  However, there needs to be a balance between increased competition and the need for regulation.

The taxi industry has operated largely unchanged for decades.  Regulators have created rules to govern price, vehicle safety and insurance requirements.  But the regulatory rules often restrict entry into the sector by limiting the number of taxi licences.  The number of plates usually does not keep up with demand for services which creates artificial scarcity, but also higher prices, poor service and long wait times.

Ride-sharing companies have changed the landscape by offering consumers lower prices, variable pricing (higher fares when demand is high), shorter wait times, and convenience.  The software application used by ride-sharing companies provides automatic payment and the ability to track the number of vehicles available in the local area.  The software also allows consumers to rate drivers which creates an incentive to provide better service.  Low rated drivers receive fewer ride requests.

The innovations introduced by Uber and other similar service providers have benefited consumers.  There is a need for updated regulatory rules so that traditional taxi operators can respond to the competition.  But the one aspect not addressed by the Competition Bureau study is the insurance issue. 

In September 2015, Intact Financial announced plans to work with Uber to create products tailored for the ride-hailing service, after concerns emerged that person auto insurance policies may not cover drivers using their personal vehicles for commercial gain.   In the meantime, Uber claims it has adequateinsurance coverage and that every ride on the UberX platform is backed by $5 million of commercial auto insurance, which covers both bodily injuries and property damage stemming from a crash.  However, Alberta government said in July that it had determined the policies do not meet the requirements of the province’s Insurance Act.  It's all very confusing.  

Ride-sharing services are here to stay.  Consumers will benefit but only if the regulatory rules and updated and the insurance issues are addressed.

Insurance News - Wednesday, December 2, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, December 2, 2015:

• There is a substantive risk associated with relying on insurer examination reports to deny serious claims which can be compounded by taking a matter to arbitration without having sufficient evidence to support a position.
• Why auto insurance rates are so high in the Greater Toronto Area.
• There is a down side to low gas prices - more vehicle traffic and more accidents.
• LAT releases update on transfer of auto insurance disputes from FSCO. LAT still planning on accepting disputes beginning April 1st.
• Consumers big winners in new law regulating towing operators.
• Ontario’s auto insurance overhaul needs to put consumers first according to a former New Jersey regulator.

Insurance News - Friday, November 20, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, November 20, 2015:

• Uber operations in Toronto spark possibility of strike in taxi industry.
• Ontario highway incident management the "missing piece" of auto insurance fraud reform.
• A fascinating article on how Uber manages the marketplace and why taxis are doomed.
• Evolution of transportation may change the auto insurance industry.
• The Florida Insurance Commissioner thinks it may be time to eliminate no-fault.
• Toronto Star reports there is a lot of confusion regarding the snow tire discount that becomes mandatory beginning January 1.

Insurance News - Tuesday, November 17, 2015:

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, November 17, 2015:

• Ontario Conservatives seek to regulate Uber, AirBnB and the sharing economy province-wide.
• Insurer cancelling policies of UberX drivers: “considered commercial use and is unacceptable for personal vehicles”.
• Uber says it needs self-driving cars to avoid ending up like the taxi industry.
• A decline in accident frequency due to safer vehicles and the adoption of autonomous vehicles could shrink the U.S. personal auto insurance sector by 60 percent within 25 years,
• Ready or not, Tesla Autopilot means self-driving cars are already on Canadian roads.
• Public consultation on Ontario tow truck regulations coming to a close.