- Bill 15 changes to prejudgement interest calculations will become effective on January 1, 2015.
- Many ride-sharing drivers are perplexed by the mixed messages that they receive and therefore opt for silence when it comes to informing their insurers. The situation is becoming problematic as ride-sharing programs expand and drivers are having accidents.
- As Uber collects a mountain of data from its ride-sharing app, it is very likely that the information will be used to expand into services, such as moving goods not just people.
- Once you get passed the rhetoric, what has become clear is that Uber has exposed flaws in taxi services in Canadian cities. Consumers look forward to reforms.
- California’s Department of Motor Vehicles will miss a year-end deadline to adopt a new set of rules for driverless cars and other cars of the future because there’s still no certainty that driverless vehicles are safe.
Tuesday, 30 December 2014
Insurance News - Tuesday, December 30, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, December 30, 2014:
Tuesday, 23 December 2014
Insurance News - Tuesday, December 23, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, December 23, 2014:
- Over $1 million in stolen vehicles recovered and 7 people charged as police investigation nabs international car theft ring operating in Toronto, York Region and Durham Region.
- It appears Uber may be telling its California drivers that personal rather than commercial auto insurance is sufficient leaving them uncovered and driving illegally.
- Google unveiled its first prototype of a fully-functional, driverless car which has actually been built on a patchwork of auto parts.
- Not a surprise that Google is also seeking an auto industry partner to develop its driverless car because it does not want to be a car maker.
- The Nova Scotia government has changed its position on a controversial lawsuit to clawback a settlement award for an catastrophic claim involving a young woman with a severe brain injury.
Saturday, 20 December 2014
Insurance News - Saturday, December 20, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Saturday, December 20, 2014:
- Smartphone applications and devices that record trip and vehicle data are set to infiltrate auto insurance at a rapid pace, bolstered by discounts of as much as 30 percent.
- A new Uber-like phone app lets stranded drivers summon the nearest tow truck. Is this a good or bad thing?
- It seems driverless cars do not do well in rain, snow and fog. Just like we humans.
- Given the size of the Ontario auto insurance market, recent auto insurance reforms (Bill 15) could impact on the entire Canadian P&C market.
- Not everyone is happy about Bill 15. Tow trucks organized a protest at Queen's Park regarding provisions in Bill 15 dealing with towing regulation.
- Uber's process for vetting potential drivers is receiving a lot of scrutiny.
Friday, 5 December 2014
Are Insurers Using Cost Control Tools Properly?
I noticed an interesting section at the end of a recent bulletin issued by FSCO regarding recent regulation changes that I reviewed in a recent post. Thrown in with the announcement of regulatory changes is a discussion on mileage expenses by health care providers.
The bulletin goes on to state that FSCO is aware that some health care providers are submitting mileage expenses to insurers to travel to an injured accident victim to provide services. Insurers are reminded that "authorized transportation expenses", as defined in the SABS, are intended to apply to expenses incurred by the insured person and not health care providers. Details of what can be claimed by insured persons are subject to the Superintendent’s Transportation Expense Guideline.
The bulletin also reminds insurers that hourly fees in the Superintendent's Professional Services Guideline include all administration costs, overhead, and related costs, fees, expenses, charges and surcharges. Insurers are not liable for any administration or other costs, overhead, fees, expenses, charges or surcharges that have the result of increasing the effective hourly rates, or the maximum fees payable for completing forms, beyond what is permitted under the Professional Services Guideline.
My guess is that these aren't just friendly reminders. More likely FSCO has become aware that health care providers are submitting for mileage and other expenses related to treatment of insureds, and insurers are paying them. While the industry is lobbying government to reduce costs in the system, insurers are paying for expenses that do not fall under the SABS.
Having worked for the government for many years I am fully aware of the amount of lobbying in which stakeholders partake. Insurance companies are not shrinking violets when it comes to lobbying efforts. There is a constant list of suggested changes presented to government officials to reduce the cost of auto insurance.
It was frustrating to work on endless changes to the system that will never be fully utilized. We now have a complex set of rules, many proposed by the insurance industry, that are not always being used. It is a system that is too complex for many to properly understand and use.
Yet the government keeps churning out more regulation and rule changes to drive down costs. But growing red tape and complexity likely have the opposite affect. Transactional costs keep going up for insurers, health care providers and legal representatives which ensures that the price of auto insurance in Ontario remains high.
As the service provider licensing system is rolled out and soon to be followed by a new minor injury protocol I wonder which direction costs will go - up or down.
The bulletin goes on to state that FSCO is aware that some health care providers are submitting mileage expenses to insurers to travel to an injured accident victim to provide services. Insurers are reminded that "authorized transportation expenses", as defined in the SABS, are intended to apply to expenses incurred by the insured person and not health care providers. Details of what can be claimed by insured persons are subject to the Superintendent’s Transportation Expense Guideline.
The bulletin also reminds insurers that hourly fees in the Superintendent's Professional Services Guideline include all administration costs, overhead, and related costs, fees, expenses, charges and surcharges. Insurers are not liable for any administration or other costs, overhead, fees, expenses, charges or surcharges that have the result of increasing the effective hourly rates, or the maximum fees payable for completing forms, beyond what is permitted under the Professional Services Guideline.
My guess is that these aren't just friendly reminders. More likely FSCO has become aware that health care providers are submitting for mileage and other expenses related to treatment of insureds, and insurers are paying them. While the industry is lobbying government to reduce costs in the system, insurers are paying for expenses that do not fall under the SABS.
Having worked for the government for many years I am fully aware of the amount of lobbying in which stakeholders partake. Insurance companies are not shrinking violets when it comes to lobbying efforts. There is a constant list of suggested changes presented to government officials to reduce the cost of auto insurance.
It was frustrating to work on endless changes to the system that will never be fully utilized. We now have a complex set of rules, many proposed by the insurance industry, that are not always being used. It is a system that is too complex for many to properly understand and use.
Yet the government keeps churning out more regulation and rule changes to drive down costs. But growing red tape and complexity likely have the opposite affect. Transactional costs keep going up for insurers, health care providers and legal representatives which ensures that the price of auto insurance in Ontario remains high.
As the service provider licensing system is rolled out and soon to be followed by a new minor injury protocol I wonder which direction costs will go - up or down.
Thursday, 4 December 2014
Insurance News - Thursday, December 4, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, December 4, 2014:
- The Supreme Court of Canada grants Zurich Insurance leave to appeal ruling over Ontario 'Dispute Between Insurer' regulation (O. Reg. 283/95) from last May.
- Project Whiplash has produced a 2-year conviction and $1.3 million in restitution for operating a staged collision ring in the GTA.
- On and after December 1, Ontario auto insurers cannot pay service providers directly if they do not have a FSCO licence.
- An undercover investigator hired by the city of Toronto reports that Uber poses ‘real and urgent’ safety problems.
- Google has taught its driverless cars to be aggressive, Google cars now nudge into traffic to compete with pushy drivers.
Tuesday, 2 December 2014
New Auto Insurance Regulations
In October the government posted a notice on their Regulatory Register inviting stakeholders who comment on proposed auto insurance regulation changes. The regulations have now been approved by the Ontario Cabinet. The regulations dealing with the licensing of service providers are effective December 1, 2014. The regulation amendment dealing with the interest on overdue payments is effective January 1, 2015.
Section 51 of the SABS (O. Reg. 34/10) has been amended (by O.Reg. 236/14) so that interest payments of 1 percent per month compounded monthly for overdue SABS payments only applies up to the date on which a mediation proceeding begins. Once the dispute reaches mediation the interest on overdue SABS payments is calculated at the prejudgment interest rate described in the Courts of Justice Act that is used for past pecuniary loss. The lower interest rate and is then payable until the date a settlement is reached or a decision is issued that finally disposes of the dispute.
Section 49.1 has been added (by O. Reg. 227/14) to the SABS (O. Reg. 34/10) to cover invoicing by unlicensed service providers. These providers must bill claimants using the Standard Invoice (OCF-21) and the claimant is to submit the invoice to their insurer. It is the responsibility of the insurer to provide HCAI with billing information from invoices submitted by claimants when they reimburse a claimant.
The Unfair or Deceptive Acts or Practices regulation (O. Reg. 7/00) has been amended (by O. Reg. 231/14). An unlicensed service provider may not advertise that they are a licensed provider. A licensed provider that has had their licence suspended or revoked may not continue to advertise that they are licensed.
The Administrative Penalties regulation (O. Reg. 408/12) has been amended (by O. Reg. 230/14) to deal with significant contraventions of the regulations that can involve or potentially lead to improper billing practices by service providers.
The Service Providers – Standards for Business Systems and Practices regulation (O. Reg. 90/14) is amended (by O. Reg. 228/14) to introduce a duty to report accurately to the Superintendent of Financial Services, in the periodic return established under section 288.4(5) of the Insurance Act, all information necessary to calculate any applicable fees established pursuant to section 121.1 of the Insurance Act.
The Service Providers – Listed Expenses regulation (O. Reg. 89/14) is amended (by O. Reg. 229/14) to allow licensed service providers to seek payment for outstanding accounts directly from claimants where a full and final settlement has been reached and signed between the insurer and the insured person that includes these amounts.
Section 51 of the SABS (O. Reg. 34/10) has been amended (by O.Reg. 236/14) so that interest payments of 1 percent per month compounded monthly for overdue SABS payments only applies up to the date on which a mediation proceeding begins. Once the dispute reaches mediation the interest on overdue SABS payments is calculated at the prejudgment interest rate described in the Courts of Justice Act that is used for past pecuniary loss. The lower interest rate and is then payable until the date a settlement is reached or a decision is issued that finally disposes of the dispute.
Section 49.1 has been added (by O. Reg. 227/14) to the SABS (O. Reg. 34/10) to cover invoicing by unlicensed service providers. These providers must bill claimants using the Standard Invoice (OCF-21) and the claimant is to submit the invoice to their insurer. It is the responsibility of the insurer to provide HCAI with billing information from invoices submitted by claimants when they reimburse a claimant.
The Unfair or Deceptive Acts or Practices regulation (O. Reg. 7/00) has been amended (by O. Reg. 231/14). An unlicensed service provider may not advertise that they are a licensed provider. A licensed provider that has had their licence suspended or revoked may not continue to advertise that they are licensed.
The Administrative Penalties regulation (O. Reg. 408/12) has been amended (by O. Reg. 230/14) to deal with significant contraventions of the regulations that can involve or potentially lead to improper billing practices by service providers.
The Service Providers – Standards for Business Systems and Practices regulation (O. Reg. 90/14) is amended (by O. Reg. 228/14) to introduce a duty to report accurately to the Superintendent of Financial Services, in the periodic return established under section 288.4(5) of the Insurance Act, all information necessary to calculate any applicable fees established pursuant to section 121.1 of the Insurance Act.
The Service Providers – Listed Expenses regulation (O. Reg. 89/14) is amended (by O. Reg. 229/14) to allow licensed service providers to seek payment for outstanding accounts directly from claimants where a full and final settlement has been reached and signed between the insurer and the insured person that includes these amounts.
Thursday, 27 November 2014
Insurance News - Thursday, November 27, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, November 27, 2014:
- John Tory joins the Competition Bureau in speaking out against Toronto’s move to file an injunction in court against Uber ride-sharing service.
- A Toronto undercover investigation concluded that there are “real and urgent” safety problems with Uber, including issues with insurance coverage, driver screening and vehicle inspections.
- Meanwhile in California, ride-sharing service drivers from companies such as Uber and Lyft will soon be able to buy an amendment to their auto insurance coverage that will provide them with protection from the moment that they sign on and are waiting for a call to pick up a rider,
- Experts claim driverless cars could add $1.3 Trillion to U.S. economy from reduced accidents and productivity gains.
- Of course driverless cars could also open up employers to steal the last of your free time.
- Fraud has caused ridiculously high auto insurance rates in Detroit which now threatens the city's economic recovery by making it expensive for residents to stay in the city and discouraging newcomers.
Saturday, 22 November 2014
Insurance News - Saturday, November 22, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Saturday, November 22, 2014:
- Bill 15, Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 passed this week with no changes. The bill when proclaimed will transfer accident benefit disputes to the Licence Appeal Tribunal, implement the oversight of the billing practices of health clinics, and introduce new rules governing tow truck operators and vehicle storage yard.
- The legal community was unable to convince the government to make changes to Bill 15 which means the new dispute resolution system will have no access to the courts and prejudgment interest will be reduced.
- This week the Ontario government released its Fall Economic Outlook and Fiscal Review (pages 71-72 deal with auto insurance).
- Driverless vehicles and smart cities can cut auto fatalities and CO2 emissions by 2025.
- Armed with analytics, predictive modeling and big data, insurers are moving to take on application fraud.
- Automakers adopt protocols to handle and protect consumer data in connected car era.
Thursday, 20 November 2014
It's Time That The Insurance Industry and Regulators Begin Accommodating Ride-Sharing Services
Uber, a San Francisco-based company estimated to be worth $17 billion (U.S.) is aiming to shake up the taxi business in Toronto.
Uber is reported to operate in more than 140 cities in 40 countries around the world, offering taxis, limos and car-sharing services, allowing customers to bypass traditional taxi companies and brokerages to request a ride using their smartphones.
When Uber first set up in Toronto in 2012, city of Toronto officials informed the company that it needed to get a brokerage licence. Uber disputed the request and has been insisting that it is not a taxi service, but rather a technology company, and therefore not subject to licensing requirements. The city has since hit Uber with 35 bylaw infractions and now the city is headed to court in an attempt to get an injunction to shut down the service.
Toronto Mayor-elect John Tory is correct. Uber and similar ride-sharing services aren't going anywhere. Consumers like these new services and that's why there are using them. Using a smartphone app, you will be told when the vehicle will arrive, who is the driver, the rating of the driver, the cost of the ride with tip and will allow you to pay for the ride without handling any cash. No need to be standing in the cold or wet on a street corner waving your arm frantically trying to get a passing cab to stop.
The current regulated taxi model is archaic and costly. The city limits the number of plate owners which has created wealth for plate owners who are often not the drivers. The dispatcher system is out of date when technology allows drivers and consumers to link up directly. However, there is a lot of money tied up in the current system. To make matters worse, the regulators appear to be very tied to the existing model.
The one thing that Uber is not short on is money. They will fight this court battle as they have in other jurisdictions. They typically come out on top. Regulators should be designing new regulatory models to accommodate new technologies not fight them. For example the Ontario Ministry of Transportation is working on a regulatory framework for driverless vehicles. The insurance regulator and the insurance industry needs to develop insurance products that reflect these new technologies whether it is driverless cars or ride-sharing services.
The insurance industry needs to recognize that ride-sharing is likely here to stay and properly underwrite these risks to protect drivers and their clients.
Uber is reported to operate in more than 140 cities in 40 countries around the world, offering taxis, limos and car-sharing services, allowing customers to bypass traditional taxi companies and brokerages to request a ride using their smartphones.
When Uber first set up in Toronto in 2012, city of Toronto officials informed the company that it needed to get a brokerage licence. Uber disputed the request and has been insisting that it is not a taxi service, but rather a technology company, and therefore not subject to licensing requirements. The city has since hit Uber with 35 bylaw infractions and now the city is headed to court in an attempt to get an injunction to shut down the service.
Toronto Mayor-elect John Tory is correct. Uber and similar ride-sharing services aren't going anywhere. Consumers like these new services and that's why there are using them. Using a smartphone app, you will be told when the vehicle will arrive, who is the driver, the rating of the driver, the cost of the ride with tip and will allow you to pay for the ride without handling any cash. No need to be standing in the cold or wet on a street corner waving your arm frantically trying to get a passing cab to stop.
The current regulated taxi model is archaic and costly. The city limits the number of plate owners which has created wealth for plate owners who are often not the drivers. The dispatcher system is out of date when technology allows drivers and consumers to link up directly. However, there is a lot of money tied up in the current system. To make matters worse, the regulators appear to be very tied to the existing model.
The one thing that Uber is not short on is money. They will fight this court battle as they have in other jurisdictions. They typically come out on top. Regulators should be designing new regulatory models to accommodate new technologies not fight them. For example the Ontario Ministry of Transportation is working on a regulatory framework for driverless vehicles. The insurance regulator and the insurance industry needs to develop insurance products that reflect these new technologies whether it is driverless cars or ride-sharing services.
The insurance industry needs to recognize that ride-sharing is likely here to stay and properly underwrite these risks to protect drivers and their clients.
Thursday, 13 November 2014
Insurance News - Thursday, November 13, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, November 13, 2014:
- Transcripts for public hearings on Bill 15, Fighting Fraud and Reducing Automobile Insurance Rates Act 2014 are now available online.
- Owning a car is expensive. So is ridesharing services like Uber cheaper than owning a car?
- Why do so many consumers seek out "cheap" auto insurance given the expense of their new cars or trucks — easily $30,000, $40,000 or even $50,000 or more for high-end models?
- Driverless car researchers develop plans to prevent hacking on the highway.
- Your car may be programmed to kill you and 9 more fun facts about driverless vehicles.
Tuesday, 11 November 2014
Insurance News - Tuesday, November 11, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, November 11, 2014:
- Bill 15, Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 passes second reading and has just one day of public hearings.
- Toronto man charged with selling fake auto insurance some drivers on the road without coverage
- Will we need a learner's permit for self-driving cars?
- Utilities, taxis, construction and mining, government and public sectors, emergency services, public transportation and local delivery services will all likely have telematics installed on their vehicles.
- Fatal California accident will test Lyft's $1 million auto insurance policy.
- B.C. Transportation Minister says plainclothes transit agents posing as potential customers will be deployed to ensure taxis and their drivers are operating by B.C.'s rules, which are enforced to ensure passenger safety.
Wednesday, 29 October 2014
Insurance News - Wednesday, October 29, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, October 29, 2014:
- Quebec is not being as aggressive as Ontario with regard to telematics since the take-up for auto usage-based insurance products has been lackluster to date.
- It's hard to imagine tomorrow’s transportation infrastructure to support driverless cars when haven't gotten around to fixing today’s infrastructure.
- In New York insurers and and trial lawyers agree the state’s no fault insurance law needs reforming but they don't agree on how. Sounds like Ontario.
- New Jersey has a bill that today is advancing in the Legislature that would establish a program to allow people to obtain endorsements on their driver’s licenses to operate and test driverless vehicles.
Tuesday, 28 October 2014
Insurance News - Tuesday, October 28, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, October 28, 2014:
- Japanese insurer is about to launch a smartphone service that warns drivers when their vehicles are approaching locations where traffic accidents frequently occur.
- Companies such as Google and Amazon may pose some of the biggest threats to insurers, as consumers increasingly trust technology behemoths to provide services such as insurance.
- A recent study concluded that Americans wasted $124 billion sitting in traffic in 2013 and traffic cost the average household $1,700 a year.
- Insurance Bureau of Canada warns UberX drivers about insurance coverage (or lack of it).
- The use of anti-fraud technology by insurers in North America is on the rise however, many companies are still struggling with the deployment of proactive predictive analytics tools because of resource constraints, according to a study.
Monday, 20 October 2014
Ontario's Rate Reduction Strategy Likely To Fall Short
This week FSCO released rate filings approved for third quarter of 2014. Nine insurers, representing 26.65% of the market based on premium volume, had rates approved in the third quarter of 2014. Approved rates decreased on average by 0.11% when applied across the total market.
In the backdrop is the Ontario government's commitment to reduce rates in the province by 15% before August 15, 2015. The chart below breaks down the quarterly rate approval changes following the announcement of the rate reduction strategy last year. The third quarter of 2013 has been included although many of the rate approvals for that quarter may have been filed well before the strategy was announced.
The accumulative rate reductions approved by FSCO during this period have been under 6%. With just 10 months remaining, the government is considerably short of its target with no real strategy to bring down rates another 9-10%.
In the backdrop is the Ontario government's commitment to reduce rates in the province by 15% before August 15, 2015. The chart below breaks down the quarterly rate approval changes following the announcement of the rate reduction strategy last year. The third quarter of 2013 has been included although many of the rate approvals for that quarter may have been filed well before the strategy was announced.
Quarter
|
Rate
Change
|
2013 – 3Q
|
-0.68%
|
2013 – 4Q
|
-3.98%
|
2014 – 1Q
|
-1.01%
|
2014 – 2Q
|
+0.22%
|
2014 – 3Q
|
-0.11%
|
Bill 15, the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 will likely be passed by the legislature within the next 10 months. The Bill contains provisions to transform Ontario's auto insurance dispute resolution system into a more robust system. Other provisions would regulate the towing and vehicle storage industries through measures that tackle questionable practices. The bill would amend provisions in the Repair and Storage Liens Act and give the province authority to change the current 60-day period that a vehicle can be stored after an accident, accruing charges, without notice to the owner. The government has also served notice through the Regulatory Register that it will reduce the rate of interest on overdue SABS payments.
However, all of these initiatives as well as the proposed legislation to regulate the towing industry and the expected introduction of a new minor injury protocol could not possible bring down rates a further 9% in less that a year.
However, all of these initiatives as well as the proposed legislation to regulate the towing industry and the expected introduction of a new minor injury protocol could not possible bring down rates a further 9% in less that a year.
Friday, 17 October 2014
Insurance News - Friday, October 17, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, October 17, 2014:
- Studies show voice activated smartphones, dashboard infotainment systems can distract drivers.
- No surprise here that OPP statistics indicate that speeding and distracted drivers are the leading causes for road fatalities.
- An interesting article on how connectivity is enabling a new paradigm for auto mobility.
- Volvos will soon have a 360 degree accident avoidance systems in its cars that will plot 'escape routes' to avoid crashes.
- A Wall Street Journal article on how driverless cars with change retirement.
- The Ontario government is behind on its rate reduction commitment but still insists it will deliver.
Wednesday, 15 October 2014
Update On Fraud
It has been nearly two years since Ontario's Auto Insurance Anti-Fraud Task Force delivered its final report to the Liberal government. The task force's final report was the result of a 16-month review and contained 38 recommendations dealing with fraud prevention, fraud detection, investigation and enforcement, as well as regulatory responsibilities.
Following the release of task force report, it seems as if every auto insurance announcement released by the Ontario government has mentioned fraud. This is a strong indication that the government is very aware of the impact of fraud. To its credit, the government and the industry began implementing task force recommendations as soon as the report hit the streets. Despite all the work undertaken to implement the task force recommendations there still remain recommended action that are outstanding.
MORE POWER TO FSCO
The Financial Services Commission of Ontario (FSCO) and the insurance industry have created educational material in different media that instruct consumers at critical moments - such as when they learn to drive, select an insurer, collide with another vehicle or make an insurance claim - on how to avoid, detect and report improper activity. Insurance Bureau of Canada (IBC) and FSCO are active on social media, providing consumers with valuable tips and information.
It is now easier to report suspected fraud. Both IBC and FSCO operate fraud hotlines that consumers can use to provide anonymous tips of suspicious activity.
The government amended Ontario's Insurance Act in 2013 to enhance FSCO's powers. The Superintendent is now able to investigate anyone who was previously in the business of insurance; licensed service providers; or anyone else the superintendent considers may be engaged in unfair or deceptive acts or practices. This would include examining records, books and other information held by a licensed service provider.
A number of regulatory changes also became effective in 2013 specifically to combat fraud. The government has amended the Statutory Accident Benefits Schedule (SABS) so that claimants play a more active role in helping to detect and prevent fraud. As well, the list of unfair or deceptive acts or practices has been expanded.
Insurers now have the ability to examine a claimant under oath, where this is necessary to determine which insurer should be responsible for coverage, without prejudice to the right for an examination under oath with respect to questionable claims.
Finally, the government has broadened the terms of reference for the required review by the superintendent of Part VI of the Insurance Act to reflect the additional powers and responsibilities assigned to FSCO. In addition, the amended Insurance Act provision now requires the review to be conducted at least every three years.
A WORK IN PROGRESS
Although there has been considerable progress made in developing tools and mechanisms to combat fraud, there are still outstanding task force recommendations. The previous government's minority status and the recent election have contributed to delays in implementing a number of recommendations. Now that the Liberals have returned to power with a majority, it is expected that adoption of the remaining task force recommendations will accelerate.
A positive sign was the introduction of Bill 15, Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 shortly after the spring election.
Should Bill 15 be passed by the legislature - and there is no reason to believe it will not be - it will implement a number of outstanding task force recommendations.
Included are provisions to transform Ontario's auto insurance dispute resolution system into a more robust system. Responsibility would be transferred to the Licence Appeal Tribunal under the Minister of the Attorney General.
Other provisions would regulate the towing and vehicle storage industries through measures that tackle questionable practices. The bill would amend provisions in the Repair and Storage Liens Act and give the province authority to change the current 60-day period that a vehicle can be stored after an accident, accruing charges, without notice to the owner.
In 2013, the insurance industry established CANATICS, or Canadian National Insurance Crime Services, a not-for-profit organization focused on using state-of-the-art analytical tools to identify potentially suspicious claims in insurance industry pooled data, to facilitate further investigation by individual insurers. CANATICS recently added a 10th insurer as a member and now has access to data from 75% of the market based on direct written premiums in Ontario. CANATICS is expected to begin operations in 2015.
Health Claims for Auto Insurance (HCAI) has developed the Professional Credential Tracker to assist regulated health professionals in preventing their identities from being misused by health care facilities. HCAI continues to look at additional anti-fraud tools.
FSCO is well on its way to licensing health clinics that treat and assess auto insurance claimants and to sanction clinics that are not following FSCO's business-practice standards. FSCO has a wide range of sanctions at its disposal, including the ability to limit or curtail a facility's access to HCAI. The licensing system is expected to be operational in December 2014.
There are a number of other ongoing initiatives identified by the task force that the insurance industry is eager to see completed. FSCO continues to lead the work on developing treatment protocols for minor injuries that are based on scientific evidence. Meanwhile, the Ministry of Transportation is still working on its Electronic Collision System project.
MORE WORK TO BE DONE
Although it is anticipated that Bill 15 will pass, there are still a number of legislative and regulatory changes recommended by the task force that the government has not acted on. There still has been no legislation introduced to protect individuals who report suspected fraud from reprisals and retribution. The government has also not amended the regulation to permit insurers to collect a cancellation fee from claimants who fail to attend a medical examination without a good reason, and to suspend income replacement benefits when there is compelling evidence the claimant has submitted a fraudulent claim for medical or rehabilitation accident benefits.
There were also a number of recommendations that dealt with information sharing that have yet to be developed. There is a need for protocols for active information sharing about suspicious cases among the investigative divisions of FSCO, the Workplace Safety and Insurance Board, the Law Society of Upper Canada and the Ontario Health Insurance Plan. In addition, protocols are needed to permit FSCO investigators to exchange information with investigators from relevant federal entities (such as the Canada Revenue Agency). The insurance industry is still waiting for these regulatory bodies and agencies to begin work out these issues.
The task force report contained several recommendations directed at introducing greater transparency with respect to independent assessments that have not been implemented. This includes requiring insurers to disclose publicly how they choose and assess the performance of independent medical examiners they refer consumers to see. Health regulatory colleges are also expected to work together to develop professional standards, guidelines and best practices to improve the quality of independent assessments of auto insurance claimants conducted by their members.
The fight against fraud is far from over but progress has been made. Under prevention, consumer awareness has been enhanced and a new licensing system for service providers will soon be operational. The industry will be in a better position to detect fraud when CANATICS is fully operational next year. FSCO's powers have been expanded to allow for more effective fraud investigation and enforcement. All this would not have been possible without the co-operation of government, the insurance industry, police services and service providers.
Following the release of task force report, it seems as if every auto insurance announcement released by the Ontario government has mentioned fraud. This is a strong indication that the government is very aware of the impact of fraud. To its credit, the government and the industry began implementing task force recommendations as soon as the report hit the streets. Despite all the work undertaken to implement the task force recommendations there still remain recommended action that are outstanding.
MORE POWER TO FSCO
The Financial Services Commission of Ontario (FSCO) and the insurance industry have created educational material in different media that instruct consumers at critical moments - such as when they learn to drive, select an insurer, collide with another vehicle or make an insurance claim - on how to avoid, detect and report improper activity. Insurance Bureau of Canada (IBC) and FSCO are active on social media, providing consumers with valuable tips and information.
It is now easier to report suspected fraud. Both IBC and FSCO operate fraud hotlines that consumers can use to provide anonymous tips of suspicious activity.
The government amended Ontario's Insurance Act in 2013 to enhance FSCO's powers. The Superintendent is now able to investigate anyone who was previously in the business of insurance; licensed service providers; or anyone else the superintendent considers may be engaged in unfair or deceptive acts or practices. This would include examining records, books and other information held by a licensed service provider.
A number of regulatory changes also became effective in 2013 specifically to combat fraud. The government has amended the Statutory Accident Benefits Schedule (SABS) so that claimants play a more active role in helping to detect and prevent fraud. As well, the list of unfair or deceptive acts or practices has been expanded.
Insurers now have the ability to examine a claimant under oath, where this is necessary to determine which insurer should be responsible for coverage, without prejudice to the right for an examination under oath with respect to questionable claims.
Finally, the government has broadened the terms of reference for the required review by the superintendent of Part VI of the Insurance Act to reflect the additional powers and responsibilities assigned to FSCO. In addition, the amended Insurance Act provision now requires the review to be conducted at least every three years.
A WORK IN PROGRESS
Although there has been considerable progress made in developing tools and mechanisms to combat fraud, there are still outstanding task force recommendations. The previous government's minority status and the recent election have contributed to delays in implementing a number of recommendations. Now that the Liberals have returned to power with a majority, it is expected that adoption of the remaining task force recommendations will accelerate.
A positive sign was the introduction of Bill 15, Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 shortly after the spring election.
Should Bill 15 be passed by the legislature - and there is no reason to believe it will not be - it will implement a number of outstanding task force recommendations.
Included are provisions to transform Ontario's auto insurance dispute resolution system into a more robust system. Responsibility would be transferred to the Licence Appeal Tribunal under the Minister of the Attorney General.
Other provisions would regulate the towing and vehicle storage industries through measures that tackle questionable practices. The bill would amend provisions in the Repair and Storage Liens Act and give the province authority to change the current 60-day period that a vehicle can be stored after an accident, accruing charges, without notice to the owner.
In 2013, the insurance industry established CANATICS, or Canadian National Insurance Crime Services, a not-for-profit organization focused on using state-of-the-art analytical tools to identify potentially suspicious claims in insurance industry pooled data, to facilitate further investigation by individual insurers. CANATICS recently added a 10th insurer as a member and now has access to data from 75% of the market based on direct written premiums in Ontario. CANATICS is expected to begin operations in 2015.
Health Claims for Auto Insurance (HCAI) has developed the Professional Credential Tracker to assist regulated health professionals in preventing their identities from being misused by health care facilities. HCAI continues to look at additional anti-fraud tools.
FSCO is well on its way to licensing health clinics that treat and assess auto insurance claimants and to sanction clinics that are not following FSCO's business-practice standards. FSCO has a wide range of sanctions at its disposal, including the ability to limit or curtail a facility's access to HCAI. The licensing system is expected to be operational in December 2014.
There are a number of other ongoing initiatives identified by the task force that the insurance industry is eager to see completed. FSCO continues to lead the work on developing treatment protocols for minor injuries that are based on scientific evidence. Meanwhile, the Ministry of Transportation is still working on its Electronic Collision System project.
MORE WORK TO BE DONE
Although it is anticipated that Bill 15 will pass, there are still a number of legislative and regulatory changes recommended by the task force that the government has not acted on. There still has been no legislation introduced to protect individuals who report suspected fraud from reprisals and retribution. The government has also not amended the regulation to permit insurers to collect a cancellation fee from claimants who fail to attend a medical examination without a good reason, and to suspend income replacement benefits when there is compelling evidence the claimant has submitted a fraudulent claim for medical or rehabilitation accident benefits.
There were also a number of recommendations that dealt with information sharing that have yet to be developed. There is a need for protocols for active information sharing about suspicious cases among the investigative divisions of FSCO, the Workplace Safety and Insurance Board, the Law Society of Upper Canada and the Ontario Health Insurance Plan. In addition, protocols are needed to permit FSCO investigators to exchange information with investigators from relevant federal entities (such as the Canada Revenue Agency). The insurance industry is still waiting for these regulatory bodies and agencies to begin work out these issues.
The task force report contained several recommendations directed at introducing greater transparency with respect to independent assessments that have not been implemented. This includes requiring insurers to disclose publicly how they choose and assess the performance of independent medical examiners they refer consumers to see. Health regulatory colleges are also expected to work together to develop professional standards, guidelines and best practices to improve the quality of independent assessments of auto insurance claimants conducted by their members.
The fight against fraud is far from over but progress has been made. Under prevention, consumer awareness has been enhanced and a new licensing system for service providers will soon be operational. The industry will be in a better position to detect fraud when CANATICS is fully operational next year. FSCO's powers have been expanded to allow for more effective fraud investigation and enforcement. All this would not have been possible without the co-operation of government, the insurance industry, police services and service providers.
Monday, 6 October 2014
Insurance News - Monday, October 6, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, October 6, 2014:
- How do you determine the appropriate premium fro a driverless car?
- Here is a list of America's most ticketed cars.
- Volvo is the only car company on the planet to make a commitment to develop and build cars that result in zero deaths or serious injuries by 2020. But the deadline appears to more marketing than a real goal.
- Some experts think new car technology may not lower insurance rate.
- Ontario health minister orders inspection and investigation reports on private clinics made public.
Thursday, 2 October 2014
Ontario Ministry of Finance Has Provided Notice On Intent To Introduce New Rules For Service Providers
The Ministry of Finance is proposing to amend O. Reg. 7/00 to make it an unfair or deceptive act or practice (UDAP) for a person who provides or offers to provide goods or services for the benefit of a person who claims statutory accident benefits to communicate any false, misleading or deceptive information regarding their business or billing practices, services provided, or any other matter related to licensing.
This UDAP is intended to apply to both licensed and unlicensed service providers. An unlicensed service provider may not advertise that they are a licensed provider. A licensed provider that has had their licence suspended or revoked may not continue to advertise that they are licensed. This amendment would ensure that consumers can identify licence holders and avoid confusion about what licence holder status means. This will also discourage inaccurate claims about what a licence signifies.
In addition, the Ministry is proposing regulatory amendment to allow the Superintendent to apply variable administrative monetary penalties (AMP) to deal with significant contraventions of the regulations that can involve or potentially lead to improper billing practices. The service provider would have the opportunity for a hearing before the Financial Services Tribunal on the proposed AMP.
The Ministry is also proposing to amend O. Reg. 90/14 (Service Providers – Standards for Business Systems and Practices) to introduce a duty to report accurately to the Superintendent of Financial Services, in the periodic return established under section 288.4(5) of the Insurance Act, all information necessary to calculate any applicable fees established pursuant to section 121.1 of the Insurance Act.
The Ministry is proposing to amend O. Reg. 89/14 (Service Providers – Listed Expenses) to prohibit licensed service providers from invoicing claimants directly - they will receive direct payment from insurers. The proposed amendment will allow licensed service providers to seek payment for outstanding accounts directly from claimants in prescribed situations (where a full and final settlement has been reached and signed between the insurer and the insured person that includes these amounts).
Finally the Ministry is also proposing to amend O, Reg. 34/10 (SABS) to require claimants who go to unlicensed service providers to obtain specified billing information from their service provider and submit this information to their insurer when seeking reimbursement.
The SABS would also be amended to require insurers to provide HCAI the billing information when they reimburse a claimant for a "listed expense". These amendments will ensure the continuity of robust and more complete data collection by HCAI. It will avoid possible loss of data that may otherwise occur when claimants are invoiced directly by service providers who are not licensed to be paid directly through the central processing agency.
The Ontario government's Regulatory Registry is inviting stakeholders and interested parties to provide comments on these proposed regulations (that have yet to be made public). The deadline for comments is November 6, 2014.
Ontario's Regulatory Registry provides information on new proposed regulatory initiatives that could affect Ontario businesses and recently approved regulations that affect business. Regulations are approved by the provincial Cabinet.
Once a regulation is approved, a plain language summary of the regulation is posted on the Registry website, with a link to the regulation posted on the Government of Ontario's e-Laws website.
This UDAP is intended to apply to both licensed and unlicensed service providers. An unlicensed service provider may not advertise that they are a licensed provider. A licensed provider that has had their licence suspended or revoked may not continue to advertise that they are licensed. This amendment would ensure that consumers can identify licence holders and avoid confusion about what licence holder status means. This will also discourage inaccurate claims about what a licence signifies.
In addition, the Ministry is proposing regulatory amendment to allow the Superintendent to apply variable administrative monetary penalties (AMP) to deal with significant contraventions of the regulations that can involve or potentially lead to improper billing practices. The service provider would have the opportunity for a hearing before the Financial Services Tribunal on the proposed AMP.
The Ministry is also proposing to amend O. Reg. 90/14 (Service Providers – Standards for Business Systems and Practices) to introduce a duty to report accurately to the Superintendent of Financial Services, in the periodic return established under section 288.4(5) of the Insurance Act, all information necessary to calculate any applicable fees established pursuant to section 121.1 of the Insurance Act.
The Ministry is proposing to amend O. Reg. 89/14 (Service Providers – Listed Expenses) to prohibit licensed service providers from invoicing claimants directly - they will receive direct payment from insurers. The proposed amendment will allow licensed service providers to seek payment for outstanding accounts directly from claimants in prescribed situations (where a full and final settlement has been reached and signed between the insurer and the insured person that includes these amounts).
Finally the Ministry is also proposing to amend O, Reg. 34/10 (SABS) to require claimants who go to unlicensed service providers to obtain specified billing information from their service provider and submit this information to their insurer when seeking reimbursement.
The SABS would also be amended to require insurers to provide HCAI the billing information when they reimburse a claimant for a "listed expense". These amendments will ensure the continuity of robust and more complete data collection by HCAI. It will avoid possible loss of data that may otherwise occur when claimants are invoiced directly by service providers who are not licensed to be paid directly through the central processing agency.
The Ontario government's Regulatory Registry is inviting stakeholders and interested parties to provide comments on these proposed regulations (that have yet to be made public). The deadline for comments is November 6, 2014.
Ontario's Regulatory Registry provides information on new proposed regulatory initiatives that could affect Ontario businesses and recently approved regulations that affect business. Regulations are approved by the provincial Cabinet.
Once a regulation is approved, a plain language summary of the regulation is posted on the Registry website, with a link to the regulation posted on the Government of Ontario's e-Laws website.
Insurance News - Thursday, October 2, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, October 2, 2014:
- Death, drones and driverless cars: how Google wants to control our lives.
- Here's how technology is being used to fight insurance fraud.
- Google is Uber's biggest investor. See where this is headed.
- New Minimum Capital Test Guidelines for P&C insurers coming in 2015.
- FSCO has received service provider licensing applications from 2,712 healthcare facilities. FSCO also maintains a public registry of licensed service providers.
- OSFI warns of lower underwriting profits if Ontario auto insurance rates are reduced by 15%.
Wednesday, 1 October 2014
Ontario Ministry of Finance Has Provided Notice On Intent To Change The Interest Rate On Disputed SABS Claims
The Ministry of Finance is proposing to amend the SABS (O. Reg. 34/10) so that when there is a dispute in respect of an insured person's entitlement to, or amount of statutory accident benefits, interest on overdue SABS payments is calculated at the prejudgment interest rate described in the Courts of Justice Act that is used for past pecuniary loss, and is payable from the date on which a mediation proceeding is commenced and ends on the date a settlement is reached or a decision is issued that finally disposes of the dispute.
The Ontario government's Regulatory Registry is inviting stakeholders and interested parties to provide comments on these proposed regulations (that have yet to be made public). The deadline for comments is November 6, 2014.
Ontario's Regulatory Registry provides information on new proposed regulatory initiatives that could affect Ontario businesses and recently approved regulations that affect business. Regulations are approved by the provincial Cabinet.
Once a regulation is approved, a plain language summary of the regulation is posted on the Registry website, with a link to the regulation posted on the Government of Ontario's e-Laws website.
The Ontario government's Regulatory Registry is inviting stakeholders and interested parties to provide comments on these proposed regulations (that have yet to be made public). The deadline for comments is November 6, 2014.
Ontario's Regulatory Registry provides information on new proposed regulatory initiatives that could affect Ontario businesses and recently approved regulations that affect business. Regulations are approved by the provincial Cabinet.
Once a regulation is approved, a plain language summary of the regulation is posted on the Registry website, with a link to the regulation posted on the Government of Ontario's e-Laws website.
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