McGuinty government delivers next step on auto insurance reform

Archived Release

McGuinty government delivers next step on auto insurance reform

Ministry of Finance

Cost-saving measures will make it possible for insurance companies to pass on average 10 per cent rate reductions to Ontario motorists TORONTO, Jan. 9 - The McGuinty government is moving forward on its agenda to bring real, positive change to auto insurance in Ontario, with the announcement of a package of reforms that will reduce costs and allow savings to be passed on to Ontario motorists. "We acted swiftly to address rising auto rates by freezing rates for 90 days at levels approved on or before October 23, 2003," said Finance Minister Greg Sorbara. "In consultation with consumer and stakeholder groups, we have developed cost-saving measures so that insurance companies can pass on average 10 per cent rate reductions to consumers upon renewal." Cost reduction initiatives include: - The establishment of maximum fees that Designated Assessment Centres (DACs) can charge to insurance companies. DACs assess accident victims when there is a dispute between insurers and accident victims about the extent of injuries and treatment plans. - New regulations that provide reasonable measures to help contain costs. - Strengthening Pre-approved Framework Guidelines (PAFs) to ensure timely and effective treatment of whiplash injuries. These PAFs detail the extent and length of care needed for the treatment of certain soft tissue injuries. In addition, after listening to stakeholder groups, including accident victims groups, the government will be increasing the maximum hourly rate for health care providers who treat the most seriously injured. Insurance companies are required to re-file their private passenger vehicle rates by January 23 for review by the Superintendent of the Financial Services Commission of Ontario. Insurance companies must reflect cost savings in these new rates. In addition, the Minister has asked his Parliamentary Assistant, Mike Colle, to bring forward measures that will better protect and inform consumers. "Mike has done an outstanding job consulting with stakeholders and ensuring we have reforms that will lead to rate reductions for Ontario motorists," said Minister Sorbara. "I know that he will bring the same energy and dedication to increasing consumer protection measures and I look forward to his recommendations." "Our reforms must look to the long-term as well as the short-term," said Sorbara. "We will continue to work towards additional steps that lower rates, cut insurance costs and increase consumer protection and education, within a competitive marketplace." Superintendent's Bulletins and Guidelines on auto insurance can be found at www.ontarioinsurance.com Disponible en fran├žais For more information visit www.gov.on.ca/finFor further information: Contact: Diane Flanagan, Minister's Office, (416) 212-0634; Boni Fox Gray, Ministry of Finance, (416) 212-2155