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.

Insurance News - Tuesday, December 17, 2013

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, December 17, 2013:

• Auto insurance profits to be rolled back in Nova Scotia as rate of return deemed too high by review board.
• Pennsylvania auto insurance bill would introduce collision coverage with no deductible.  State law currently requires a minimum deductible of $100.
• California has released draft regulations on licensing companies wanting to test self-driving cars.  Though not sure how Google has been legally able to log 500,000 miles on their self-driving cars. 
• In addition, Michigan will soon become the 4th U.S. state to allow and regulate the testing of self-driving cars.
• A Dutch bus company is testing technology that monitors whether a driver is becoming drowsy.