Insurance News - Monday, March 24, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, March 24, 2014:

• Foreshadowing a clash between auto makers and a prominent auto insurance company, a bill is being debated in California aimed at loosening car manufacturers' grip on data generated by vehicles.
• To ensure safety and reliability self-driving cars are going to have to consume and process enormous amounts of information.
• If cars could drive themselves, how many would we actually need? Will self-driving cars revolutionize car ownership?
• Drivers for ride-sharing services are being accused of fraud.  Following an accident some are claiming their car was being used for personal use.
• About 3,400 people die each year in frontal crashes with no airbag deployment in their vehicle according to U.S. data.

Insurance News - Tuesday, March 18, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, March 18, 2014:

• The Ontario Court of Appeal has ruled against insurer over limitation period in OPCF 44R. The insurer is likely to appeal to the Supreme Court of Canada.
• 80% of Canadians support a ban on texting while driving but then how many will actually comply with such a law?
• Uber, the popular U.S. ride-sharing service, has arranged for insurance to cover the gap exposed late last year when a 6-year-old girl was killed by an Uber driver.
• This Long Island con artist staging accidents may be an all-time low for insurance fraud.
• A U.S. insurer has introduced a smartphone app to allow an insurance rep to carry out a video appraisal using a client's smartphone's camera to assess damage remotely.
• This is certainly a privacy concern, auto insurance plug-ins may soon track motorists' locations, not just driving habits.

Insurance News - Monday, March 17, 2014

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

• The government introduced a road safety bill (Bill 173) that if passed will toughen up distracted driving penalties by increasing fines to a maximum of $1,000 along with 3 demerit points.  Penalties for "dooring" a cyclist increase and drivers will need to stay at least a meter away from cyclists.
• FSCO has approved The Co-operators’ usage-based car insurance plan which will be launched this April.
• The Toronto Star believes the Ontario government is doing the right thing by testing self-driving cars.
• Driverless technology and the issue of liability: Who’s responsible?
• Parents invent device to track teenage son's driving and now they are marketing the device.
• B.C. woman could lose her auto insurance coverage after racking up over $5,000 in unpaid bridge tolls.

Insurance News - Thursday, March 13, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, March 13, 2014:

• Is the demand for regulation of insurer examinations gaining any traction?  And who should be responsible the Ministry of Health or the Ministry of Finance?
• However, usage-based insurance and telematics are definitely getting more traction in Ontario.
• Telematics technology plays a key role in thwarting a fraudulent auto insurance claim.
• This ride-sharing smart minivan may be the future of self-driving cars.
• California pushes to finish rules for driverless cars by the end of this year to stay ahead of the rapidly developing technology.

Insurance News - Tuesday, March 11, 2014

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

• Not everyone is convinced that dispute resolution reforms will make a difference if no culture change takes place.
• Opinion: The Liberals are hijacking the NDP's auto insurance strategy.
• The myth about being good at multi-tasking is creating a serious road safety problem in the form of distracted driving.
• In the U.S., auto injury medical costs continue to rise faster than inflation despite a decrease in injury severity.
• Some time in the future insurers will be using drones to do the job of a mobile adjuster.

Insurance News - Monday, March 10, 2014

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

• A lot of media coverage on how the Ontario government has introduced Bill 171 to address fraud and high auto insurance premiums.
• Meanwhile, it is reported that Florida auto insurance reforms are working though the Hillsborough clinic licensing ordinance has run into numerous legal problems.
• South Carolina and Rhode Island will be the 31st and 32nd U.S. states to allow electronic proof of auto insurance. Still not available in Canada.
• Traffic congestion is growing three times as fast as US economy, with situation worst in Los Angeles. My guess is that the problem is just as bad in Toronto.
• To coincide with Fraud Prevention Month, a Toronto-area rehab clinic that pleaded guilty to UDAP charges in November has now been fined $75,000.
• Drivers have hit family members in three separate incidents at the same intersection in North York.  It also happens to be where FSCO is located.

Will the February 1st SABS Changes Reduces Claim Costs?

On February 1st, three amendment to the SABS became effective. These changes were met with criticism by some stakeholders because the Ontario government chose not to consult on the amendments before introducing them.  The reaction of stakeholders was predictable with respect to these particular changes, which may have been a factor in moving ahead without consulting.  The other contributing factor is the government's rate reduction strategy.  Following an initial round of rate filings, FSCO was able to only squeeze an average of about 5% rate reductions.  The next 10% are likely to be much more difficult to find.

The February 1st, SABS amendments are:

• those seeking an exemption from the $3,500 minor injury cap based on a pre-existing condition must provide medical documentation that precedes the accident;
• those providing attendant care services can only be paid up to any income loss incurred; and
• the section 35 election can only be used once by a claimant.

These amendments are part of a strategy to tighten up the system so that perhaps some savings trickle down and contribute to the promised 15% rate reduction.

Will there be any savings and, if there are, will they be significant enough to have an impact?

In a previous post, I had noted that the minor injury cap appears to be holding.  Those claims attempting to escape the cap either have a psychological component or pre-existing condition.  In the absence of arbitration decisions regarding the scope of the minor injury definition, there is still cost uncertainty regarding the current product.  Because of the number minor injury claims, the cost impact of a decision regarding the definition could be significant one way or the other.  Therefore, this amendment could lead to insurers re-evaluating their claim costs over time and lower premiums.

The attendant care amendment may not produce any real savings.  Let's say a claimant is eligible to claim  a monthly attendant care benefit of $2,000.  A family member has quit their job to provide the care and has been submitting invoices totaling $2,000.  If that family member was only earning $250 per week at their job, that person would only be able to invoice up to $1,000 per month under the SABS amendment.  The family is still eligible for another $1,000 per month and will more than likely use it purchase care either from a company or another family member or friend.  I suspect this change will produce no savings.

As for the third amendment, I don't have access to data that would indicate how many elections take place after an initial election is made.  Prior to 2010, there were claimants who would elect to receive the caregiver benefit and later elect to receive income replacement benefit or non-earner benefit when they no longer qualified as a caregiver.  However, since the caregiver benefit is now optional coverage except for those with catastrophic injuries, this scenario is likely quite rare.  The savings would have to be negligible.

Ontario Government Introduces Legislation to Begin Implementing the Cunningham Report

On March 4, 2014, the Ontario government introduced Bill 171 for first reading, which, if passed, would begin the process of implementing the recommendations made by Justice Cunningham in his review of the auto insurance dispute resolution system.

The Bill would amend the Insurance Act to change how disputes relating to statutory accident benefits will be resolved. Currently these disputes are dealt with by the director of arbitrations appointed under section 6 and arbitrators and mediators provided for under sections 8 and 9. Those sections are to be repealed and regulations will deal with proceedings going to the Tribunal [Cunningham Recommendations #4, 13, 24].   Regulation making authority would be added to the Insurance Act to cover the introductions of time limits and limitation periods. [Recommendation #6]

New section 280 provides that disputes will be dealt with by the Licence Appeal Tribunal under the Licence Appeal Tribunal Act, 1999. [Recommendation #1]  The new section 280 also prohibits taking SABS disputes to the courts except for appeals of arbitration decisions. [Recommendations #9, 28]

 The protection of benefits after a dispute is resolved, currently in section 287, is continued under the new section 281. 

 Under the new section 282, the Lieutenant Governor in Council will be able to assess insurers for the costs of the Licence Appeal Tribunal relating to these disputes. That power is similar to the assessment power under section 25 of the Financial Services Commission of Ontario Act, 1997. 

The new section 283 authorizes regulations for various transitional matters, ie, disputes that arise before the transition date.  Regulations may provide for the continuation of director of arbitrations and existing arbitrators and mediators during transition. 

The Bill only sets out a framework for a new dispute resolution system with nuts and bolts to be set out in regulations.

Insurance News - Saturday, March 1, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Saturday, March 1, 2014:

• Who owns all that data your car generates?
• New York "creates" highway texting zones at existing rest stops and service areas but will that stop drivers from texting?  After all, drivers who need to use their phone should already be stopping at these locations.
• Now a California court has ruled that hand-held cell phone law are only meant to apply to drivers making a call.  So it's fine to hold phone to use map.
• It's not just insurers who will be hurt by the introduction of self-driving cars. Everyone who makes money off of car accidents is going to feel it.
• Insurers are denying claims and cancelling policies of vehicle owners that are using their vehicles as part of a ridesharing service.

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?

Insurance News - Friday, January 31, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, January 31, 2014:

• Regulators, courts and city halls are struggling to define Uber. Is it a taxi company or a technology platform?
• Ridesharing taxi services stuck in insurance limbo.
• Can insurance discounts for installing text-blocking devices lead to fewer distracted drivers?
• New U.S. laws to be considered around the use and security of Big Data from automobiles.
• The first serious accident caused by an algorithm will be a major challenge to the fully driverless future.
• California consumer watchdog wants regulator to ban insurers from using driver's occupation and education in setting rates.

Insurance News - Tuesday, January 28, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, January 28, 2014:

• Ontario-based insurers paid more than $25 million in claims for vehicles damaged in the December ice storms.
• Is the state of Ontario auto causing foreign property and casualty insurers to reconsider their business strategy in Canada?
• FSCO has released a revised MIG and OCF-18 to reflect SABS changes that become effective on February 1st.
• In Florida Personal Injury Protection coverage is projected to drop an average of 13.2% from a year ago because of anti-fraud reforms.  However, the overall reduction is only 1.2% because “no-fault” accounts for a small portion of auto coverage.
• With a spring provincial election still a strong possibility, a Forum poll from the weekend shows Conservatives at 36%, Liberals at 33% and the NDP at 26% as polling numbers show the race is even tighter.

FSCO Has Released a Revised MIG and OCF-18

FSCO has releasing a revised Minor Injury Guideline (MIG) and Treatment and Assessment Plan (OCF-18) that become effective February 1, 2014.

 

The revised MIG and OCF-18 reflect the recent change made to the SABS in which a pre-existing condition must have been documented by a health practitioner prior to the accident.  The change is reflected in Section 4 of the MIG which deals with impairments that do not fall under the guideline.  As for the OCF-18, changes have been made to the introductory Note box on page 1 and to the second question in Part 4.

 

Revised MIG is here.

Revised OCF-18 is here.

SABS amendment to section 38 (3) (c) (i) is found here.

Insurance News - Friday, January 24, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, January 24, 2014:

• Will insurers begin to use social media posts (eg., Facebook) to evaluate risky lifestyles when calculating premiums? 
• Car theft victims are also using social media to track down stolen cars.
• Last year, more Torontonians were killed by cars (63) than by homicide (56). So why aren't we doing anything about it?
• Crash test indicate that tiny vehicles have major safety disadvantages.  Only the Chevrolet Spark had acceptable test ratings. 
• FSCO is in the process of launching their Arbitration eCalendar, which is expected to will streamline the arbitration booking process.

Insurance News - Monday, January 20, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, January 20, 2014:

• The Automobile Association of America is urging insurers offering telematics to adopt its new “Consumer Rights for Car Data,” which the company says will protect drivers.
• An investigation has found that car history reports from CarFax and CarProof may lack key data.
• A Kentucky bill would eliminated the need to carry proof of insurance and allow police to check if driver is insured through a state database using a computer in the officer’s cruiser.  No need to carry a paper or electronic insurance card.
• New survey reveals that teens who feel their parents are good drivers are half as likely to have been in an accident.
• Tech meets red tape reality of working with government: When it comes to automated cars, technology companies and auto manufacturers are moving much faster than government regulators.

Ontario Moving Closer to a New Treatment Protocol for Minor Injuries

On a recent snowy morning, a group of auto insurance stakeholders got together at Lakeridge Health in Oshawa for an all-day information session on some of the research findings of the Minor Injury Treatment Protocol Project (MITPP).  This was the first public presentation (although it was by invitation only) of the research team's work.

The MITPP originated in FSCO's Report on the Five Year Review of Automobile Insurance which recommended that examining the feasibility of expanding the PAF Guidelines to provide a more extensive continuum of care and to include the treatment and assessment of other soft tissue injuries (Recommendation #23).  Following an open competitive Request for Proposal process, a two-year contract was awarded to team of researchers led by Dr. Pierre Côté from the University of Ontario Institute of Technology and the Canadian Memorial Chiropractic College in the spring of 2012.

The project team will be delivering a report to the Superintendent later this year that provides:

• Recommendations regarding a treatment protocol for minor injuries and
• Recommendations regarding a clinical predictive rules to screen for patients who may be a risk of developing chronic pain.

There have been significant progress made by the project team and to date have completed the following tasks:

• The project team has developed a methodology for developing a new tasks including a process for identifying relevant studies for consideration.
• The project team has updated the research carried out by the World Health Organization's Neck Pain Task Force (NPTF) study which was released in February 2008.
• The project team has also now finished reviewing research on the treatment of neck pain.

There are some significant tasks that still need to be completed before the final report is submitted to the Superintendent.  Those tasks include:

• The project team will need to complete the review of research on the treatment of other minor injuries, not related to neck pain (for example, headaches, low back pain, injuries to extremities, temporomandibular disorders, minor brain traumatic brain injuries).
• Make recommendations regarding a treatment protocol for minor injuries.
• Make recommendations regarding a clinical predictive rules to screen for patients who may be a risk of developing chronic pain.

The project team developed some rigorous standards which were used to decide whether to consider a study for the project.  Their literature search produced over 100,000 papers.  Only published studies that underwent peer review and followed appropriate research protocols were considered.  For example, opinion papers and unpublished documents were not included.  A team of graduate students reviewed the papers to determine if they met the standards.   Many studies were inadmissible because of small sample sizes or possible bias.  In the end fewer than 200 papers made the cut.

The day was filled by research associates presenting on topics related to the treatment of neck pain.  Unfortunately, I cannot report on any of the findings.  The information is being embargoed until it is published as a series of papers in a scientific journal later this year.  A similar approach was taken by the NPTF which published its finding in a special supplement of Spine Journal on April 28, 2008.

The final report of the MITPP will be considered by the government later this year.  Implementation will not only require the release of a new Minor Injury Guideline by FSCO but will likely require regulation changes and an extensive education campaign directed at health care providers, insurance adjusters and the public.

Insurance News - Saturday, January 18, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Saturday, January 18, 2014:

• Acquisitions in the Canadian insurance market continue with Desjardins Group set to acquire State Farm Canada businesses.  How much has Ontario auto contributed to State Farm's exit from Canada.  Will other foreign-based insurers follow?
• FSCO reports auto insurance rate approvals declined by 3.98% for entire market in the 4th quarter of 2013 4.75% for all of 2013. The rate change covers 66.55% of Ontario auto insurance market.
• The Ontario Divisional Court has denied a judicial review application in Federico v. State Farm. The case involved a dispute over the interest rate charged for late payments under the transitional provisions on the SABS (34/10).
• CANATICS has now chosen an analytics service provider to help expose hidden patterns of fraudulent behaviour.
• Ford, State Farm and University of Michigan are teaming up to unveil automated Fusion Hybrid research and test car to be used to make progress on future automated driving and other advanced technologies.
• The New York Department of Financial Services is inviting usage-based auto insurance filings. The state sees telematics as a means to combat distracted driving.
  
  
  
  
  
  
   

Ontario Auto Insurance Rates Beginning to Come Down Slowly

The first full quarter (4th quarter of 2013) of rate approvals following the government's announced rate reduction strategy have now been released by FSCO.  The regulator has been able to squeeze 3.98% in rate reductions from 66.55% of the market.  That's an average of 5.98% per insurer of those that filed in the quarter.  That is better than the 3rd quarter results in which only a 0.65% reduction was achieved.  Combined 98.95% of the market has refiled their rates and as the government reports, approved rates are down 4.66%.

The government is committed to bring down rates by 15% over a two-year period which likely makes no one happy - neither consumers or insurers.  Considering that it can take up to a year until new approved rates appear on renewals (depending when a driver's policy renews), consumers could wait up to 3 years to see the full 15%.

The question that remains is how successful will the government be in bringing down rates to the targeted level?  The regulator squeezed less that 5% out of rates so far and that was the easy part.  Those numbers reflect company projection of future benefit costs, investment returns, overhead costs and a profit margin.  Perhaps with interest rates set to increase there will be some wiggle room to lower rates further.  As well, if the benefit costs continue to remain stable as they have for over 3 years, insurers may adjust their reserves which might allow rates to come down.  The severe winter in Ontario means claims have likely been higher so I doubt there is much room there anymore.  Overhead costs don't change much so all that is left is a smaller profit margin.  Perhaps this is part of the motivation for State Farm to get out of Canada.  After all, they haven't been profitable in Canada in a number of years. 

The insurance industry is holding out for further changes to the auto insurance system which might change the cost structure enough to bring down rates further. The government has announced a few initiative which they hope with achieve that:

• The province will propose legislative amendments in the spring session based on recommendations of the Dispute Resolution System Review
• The province is consulting on the development of a province-wide system to oversee the towing industry and reviewing vehicle storage and collision repair practices
• Work is progressing on enabling health service provider licensing so that only licensed providers can get paid directly by insurers.

 The final 10% is going to be a challenge for the industry and the government.
 

Insurance News - Tuesday, January 14, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, January 14, 2014:

• That unemployed adult child living in mom's basement may be a dependent under the SABS (State Farm v. Bunyan, 2013 ONSC 6670).
• Ontario may introduce draft legislation cracking down on rogue tow truck drivers as early as this summer.
• Politicians and lawmakers need to catch up with auto technology and consumer demand.
• Several U.S. states are allowing undocumented immigrants to get driver's licences, so will they buy insurance too?
• The next data privacy battle may be waged inside your car.
• Angry voters can mean radical change in Ontario elections (possibly this spring).

Insurance News - Thursday, January 9, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, January 9, 2014:

• Granite Health Solutions has become the first IME provider to be awarded with a 3-year CARF accreditation.  I've been suggesting that accreditation may address some of the poor quality IME work out there.
• US commercial truck drivers will need proof of medical certification from a medical examiner. The requirement will not apply to drivers with Canadian licenses. 
• A French company is coming to the U.S. to market a driverless, electric, open-air shuttle vehicle that seats eight that can do 30 mph.
• Studies are suggesting that Los Angeles' new Light Rail Line is reducing driving.  Meanwhile Toronto municipal politicians continue to dither.
• Google's self-driving cars have logged 300,000 accident-free miles but mostly on highways. Will they be as safe in city traffic? Will they actually save 30,000 lives?

Insurance News - Tuesday, January 7, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, January 7, 2014:

• FSCO has issued a RFP for arbitration services to address the arbitration backlog that has developed following the elimination of the mediation backlog.  ADR Chambers is currently handling arbitration cases and the new contract will replace current contract with ADR Chambers.
• MTO is consulting on a pilot project to safety test self-driving cars. The pilot involves licensing test vehicles for developers that meet certain criteria and is similar to pilots in California, Florida, Nevada and Michigan - all jurisdictions are looking to attract technology and auto manufacturers to invest in their jurisdiction.
• Advice on getting cash after a crash from the at-fault driver to cover a car’s decreased value after an accident.  Though I don't believe insurers will cover diminished value law suits.
• Florida is the 30th state to allow electronic proof of auto insurance.
• More predictions regarding self-driving cars, sales are expected to hit 11.8 million by 2035 and almost all cars will be self-driving by 2050.

Insurance News - Friday, January 3, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, January 3, 2014:

• Quebec insurer Industrial Alliance wants to introduce a telematics program for young Ontario drivers with the ability to lower their auto insurance rates based on usage.
• Are civil liability cases involving drunk driving putting an end to personal responsibility?
• The OPP is reporting a significant drop in impaired driving charges and suspensions during their Festive R.I.D.E. campaign.
• Study shows teens may begin their driving habits with great caution, but as months behind the wheel pass, they begin to multi-task at higher frequency rates – dialing cell phones, eating, and talking to passengers, etc. – and therefore greatly raise their risk of crashes and/or near-crash incidents.
• Nevada is introducing new road safety measure. The Nevada Department of Motor Vehicles will begin taking applications for and issuing driver authorization cards to Nevada residents who cannot meet citizenship requirements for a standard driver’s license or identification card.

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:

• The NAIC reports that New Jersey had the highest auto insurance rates in 2011 with average premium of $1,302.  FSCO reports that the average premium in Ontario in 2012 was $1,551.
• OSFI releases new draft Minimum Capital Test guideline for property and casualty insurers.
• Manitoba Public Insurance says its fraud investigations saved ratepayers $8 million last year.
• Michigan becomes the 4th state to approve self-driving car research on public roads after California, Nevada and Florida. 
• New Hampshire increases speed limit on interstate highway to 70 mph.

Happy Holidays!

A happy and safe holidays to all my followers and their families.

Insurance News - Monday, December 23, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, December 23, 2013:

• The Ontario government is consulting with representatives from the towing, municipal, insurance, policing, legal, leasing and financing sectors to look at options for towing industry oversight. 
• The Ontario government has announced that it has now taken action to address 18 of the 38 recommendations made by Ontario's Auto Insurance Anti-Fraud Task Force.
• This is why the 2000 Honda Civic SiR two-door gets stolen more often than any other vehicle in Canada.
• The New York Department of Financial Services has approved a telematics program that allows policyholders to install a free device in their cars that prevents teens from texting or calling while driving.
• Robots, self-driving cars—what's Google doing?

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.

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.