Ontario's Proposed Auto Insurance Reforms
The McGuinty government has announced a package of 41 reforms to automobile insurance in Ontario.
The proposed reforms, introduced by Finance Minister Dwight Duncan, are based on recommendations provided by the Superintendent of the Financial Services Commission of Ontario's Five-Year Automobile Insurance Review report, as well as feedback received from dozens of insurance industry, health care, legal and consumer experts and groups.
The reforms would streamline a number of processes for insurers and health care providers, create a less complex auto insurance system, and protect consumers while giving them more choice to buy coverage that best meets their protection needs and budgets.
The government's package of automobile insurance reforms includes the following proposals:
MEASURES TO PROTECT CONSUMERS
- Prohibit objectionable quoting practices including the use of credit scoring, delays in providing quotes, requiring written applications for quotes and certain screening techniques.
- Expand the definition of "catastrophic impairment" to include single-limb amputees.
- Consult with the medical community to amend the definition of "catastrophic impairment" and redefine the threshold for catastrophic brain injuries.
- Increase the efficiency and effectiveness of treatment for minor injuries (whiplash, sprains and strains). Under the proposed reforms, a new guideline would be developed to provide for a greater variety of care for minor injuries. The goal of this guideline would be to reflect current scientific and medical literature. It would be focused on treatment outcomes and provide health care providers with numerous milestones that could be used to measure progress.
- No element of a risk classification system would use past claims for which a driver is 25 per cent or less at-fault.
- Make mandatory the existing statutory appraisal process under section 128 of the Act on insurers for property damage claims if the consumer prefers this process over the courts.
- Amend Regulation 283/95 to make it more difficult for insurers to deflect claims and to ensure that claimants receive accident benefits while the issue of liability for a claim is resolved.
- Amend the Ontario Standard Auto Policy to provide a limited amount of additional coverage for vehicles with a Gross Vehicle Weight rating over 4,500 kg.
- The attendant care benefit would continue to compensate claimants for incurred expenses. However, to enhance consumer protection and transparency, the SABS would clarify that where an arbitrator has found that the insurer has been unreasonable in denying the attendant care benefit, payments should be made even if no expenses have been incurred.
- The health care professional associations and the insurance industry should jointly develop standards for the delivery of third party medical examinations as well as qualifications for assessors. FSCO would facilitate the process.
- FSCO would to continue to monitor fees and the availability of services in the auto insurance sector, in particular for seriously injured claimants.
- Insurance claims departments need to better focus on the needs of claimants with serious injuries. The Insurance Bureau of Canada, Insurance Institute of Ontario and the Ontario Insurance Adjusters Association could work together to train adjusters on the needs of claimants with serious injuries to reduce exposure to potential allegations of unfair and deceptive acts or practices.
- Conduct annual review of reimbursement rate for travel in a personal vehicle.
- Consumers, health care providers and insurers could work together to improve consumers' awareness and expectations around treatment and outcomes. Some of the savings from changes in the accident benefits system would be used to fund these educational efforts.
- The government would consider legislative amendments to reflect the unique status of public transit services operated by municipal authorities by excluding injuries from no-fault where no collision has occurred.
- Auto insurers should explore and take advantage of their existing ability to implement electronic commerce options under Ontario's Electronic Commerce Act, 2000.
- The government would consider harmonizing the reports required under sections 289, 289.1 and 417.1 of the Insurance Act.
MEASURES TO INCREASE CONSUMER CHOICE
- Provide consumers with more choice by reducing the minimum coverage for medical and rehabilitation benefits, attendant care, deductibles on court awarded compensation, and a direct compensation - property damage deductible. Consumers would have an option to increase any of these coverages.
- Reduce the cap for medical and rehabilitation benefits for non-catastrophic claims to $50,000. Introduce a $100,000 optional medical and rehabilitation benefit along with the existing $1 million optional benefit.
- Provide an option to reduce the tort deductibles to $20,000 (not-at-fault accident victims) and $10,000 (family members under the Family Law Act), provide that the deductibles do not apply in the case of fatalities; and do not revoke the definition of serious and permanent impairment set out in Regulation 461/96.
- Make housekeeping and home maintenance expenses and caregiver benefits optional. Reimbursement for housekeeping and home maintenance expenses and for replacement caregivers would reflect actual economic losses.
MEASURES TO STREAMLINE THE AUTO INSURANCE SYSTEM AND REDUCE TRANSACTION COSTS
- Assessment costs would be limited to $2,000 per assessment and the fee for completing forms including any assessment required to complete the form would be capped at $200. This would also be included as part of a person's medical and rehabilitation accident benefits, whether they opt for the basic level or additional coverage. Insurer examinations would also be limited to $2,000 per assessment and rebuttal examinations would be completely eliminated.
- As an interim measure, those who suffer minor injuries in car accidents would receive $3,500 worth of treatment and assessments. This would be included as part of a person's medical and rehabilitation accident benefits, whether they opt for the basic level or additional coverage. It would be focused on treatment outcomes and provide health care providers with numerous milestones that could be used to measure progress.
- Further consultations will be held with health care providers, insurers and consumers to establish the best approach to control medical and rehabilitation costs, while continuing to enhance medical care for people injured in accidents.
- The government will form a stakeholder advisory committee, made up of experts from various sectors of the automobile insurance industry, health care providers and legal professionals. Consumers will also be represented on the committee.
This committee will help advise the government on longer-term reforms, including improved outcome-based treatment protocols for minor injuries, as well as establish the best approach to control medical and rehabilitation costs while ensuring consumer choice of health care providers when obtaining treatments and assessments.
- Reduce the interest rate chargeable on overdue Statutory Accident Benefits Schedule (SABS) payments by insurers to one per cent per month compounded monthly (from two per cent per month compounded monthly).
- Review the SABS to identify provisions that: a) are overly complex and could be simplified without changing the intent of the Regulation, or b) are essentially ineffective and could be eliminated without changing the impact of the Regulation.
- Section 24 assessments expenses would be subject to the same maximum monetary and time limits that apply to medical and rehabilitation benefits under section 19 of the SABS.
- The time frame provided to adjusters to review assessment requests would be the same as the time frame that applies to treatment plans (10 business days) to allow for proper claims handling.
- Availability of in-home assessments would be limited to seriously injured claimants and would only be used to evaluate their need for attendant care services and home modifications.
- Restrict the ability to conduct catastrophic impairment assessments to practitioners with appropriate training and experience.
- Provide adjusters with some discretion in reviewing assessment and treatment requests and modify Ontario Regulation 7/00 to reflect proposed amendments to the SABS.
- Revoke section 42.1 of the SABS, which allows claimants to obtain an assessment from their health care provider to address issues raised in an insurer examination.
- Only occupational therapists and nurses who have been trained on the use of Form 1 would be permitted to assess auto accident victims for the attendant care benefit. This would apply to assessments conducted under both sections 24 and 42 of the SABS.
- Amend the SABS to provide for an appropriate cap on the cost of accounting reports to substantiate a claim for weekly benefits.
- The cost of future care cost reports would not be an expense recoverable under the SABS.
- When determining the merits of any future regulatory changes, consideration would be given to whether a change would increase complexity and regulatory burden. There should be a compelling reason for making a change that would add complexity to the accident benefit system.
- Contract a forms consultant to assist the Financial Services Commission of Ontario (FSCO) and stakeholders in simplifying the application process and revising forms that should first be tested on consumers.
- Provide best practice guidelines that would set out standards for communicating information on the fault determination process and how to challenge a determination.
- FSCO, Workplace Safety and Insurance Board and auto insurers would meet to discuss how to better harmonize the auto insurance and workplace insurance systems.
- Investigate options for enabling auto insurers to more effectively enforce existing provisions in the SABS and the Insurance Act that require deductions of all collateral sources of income benefits.
IMPLEMENTING THE REFORMS
The Minister of Finance intends to implement automobile insurance reforms as part of a regulations package that would become effective in summer 2010, and continue to explore further longer-term measures.