The Province of Ontario released its latest budget last week. In it the subject of the Insurance Act and Affordable car insurance were addressed. There is considerable concern in the Ontario Trial Lawyers Association and among personal injury lawyers in general that proposed changes will further restrict patients’ rights. The government is proposing treatment centres and a ‘one size fits all’ approach to treatment of injuries. There seems to be little focus upon the practice of some insurers to deny claims and drive claimants to accept settlements far below acceptable levels. Nor, does it seem, is there a great deal of focus being placed on the practice of insures fighting relatively small claims with extraordinarily expensive experts and lawyers, forcing injured parties to match the expenses or bow out of the settlement process.
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Modernizing the Regulation of Insurance
The government is committed to a modern approach to insurance regulation that protects the public while promoting an innovative, competitive financial services industry.
The government is introducing amendments to the Insurance Act and the Corporations Act which, if passed, would give the Financial Services Regulatory Authority of Ontario (FSRA) prudential oversight of certain insurance companies incorporated in Ontario, including farm mutuals, reciprocals, publicly owned insurers and insurers created by legislation. In addition, all insurers licensed in Ontario would be required to be incorporated in a jurisdiction that meets international solvency standards.
To further enhance consumer protection, the government is introducing amendments to the Insurance Actwhich if passed, would provide FSRA with the authority to make rules requiring insurers to provide claims and repairâ€‘history information to motor vehicle dealers for disclosure to prospective used-vehicle purchasers.
In addition, to reduce regulatory burden and enhance consumer convenience, amendments to the Insurance Act are being proposed which, if passed, would clarify the use of electronic communication by insurers and consumers, including certain insurance applications, policies and forms.
Making Auto Insurance More Affordable
The government continues to make auto insurance more affordable for the province’s nearly 10 million drivers. Since 2013, Ontario has implemented a series of reforms aimed at reducing rates and better protecting consumers. Recent reforms have included:
Requiring insurers to offer a discount for the use of winter tires;
Creating a new dispute resolution system to help Ontario claimants get faster access to the benefits they need;
Strengthening consumer protection by requiring towing and storage costs after an accident to be more transparent;
Prohibiting premium increases for minor at-fault accidents; and
Lowering the maximum interest rate charged on monthly premium payments.
While these reforms have reduced rates, the Province recognized more needed to be done. In his April 2017 report, David Marshall, Ontario’s advisor on auto insurance, identified that structural reforms to the system are the only way to reduce rates in the long term and improve care for those injured in auto collisions. That is why on December 5, 2017, the government announced the Fair Auto Insurance Plan, which includes a series of transformative changes that will reduce auto insurance rates and help those who are hurt in auto collisions get the care they need. The plan includes:
Cracking down on fraud by launching the province’s first Serious Fraud Office, with an initial focus on auto insurance fraud;
Implementing standard treatment plans for common injuries such as sprains, strains and whiplash;
Ensuring that lawyers’ contingency fees are fair, reasonable and more transparent;
Directing FSCO to review risk factors used by insurers, including where a person lives, to ensure that drivers in certain parts of the province are not subject to unfair high rates;
Reducing disputes by establishing independent examination centres; and
Establishing an advisory panel to guide the enactment of reforms contained in the Fair Auto Insurance Plan.
Common Injuries from Auto Collisions
Minor injuries account for between 70 and 80 per cent of claims. David Marshall, Ontario’s advisor on auto insurance, reported that approximately 80 per cent of injuries from auto collisions involve whiplash or other soft tissue injures such as a sprained back, which can often be treated by standard and relatively simple procedures.
The government remains committed to transforming the auto insurance system to prioritize care for accident victims. Initial steps taken by the government include implementing standard treatment plans for the most common auto collision injuries and reducing disputes that can ultimately hurt victims instead of helping them. As a next step, the government will be investing in the development of Pathways of Care that will support catastrophically injured persons through the Ontario Neurotrauma Foundation (ONF). The ONF, in partnership with Spinal Cord Injury Ontario, will work with insurers, legal professionals and people with lived experience to develop standards of care that reflect scientific evidence, existing research and best practices, to support the government’s goal of an overarching system of care that supports all people injured in auto collisions.
These measures are part of the government’s transformation of the auto insurance system over time, aimed at bringing rates down and keeping them down in a sustained way, and ensuring that people who are hurt in auto collisions are able to receive the care they need, when they need it. The Province will continue to develop and implement measures to ensure the structural transformation of the auto insurance system that will result in less fraud, reduced rates, fewer disputes, and more timely and appropriate care for victims.