Insurance News – Tuesday, August 12, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, August 12, 2014:

  • BMW plans to be the first car manufacturer to install usage-based insurance telematics into cars.
  • A Globe article on how driverless cars will not only transform our cities but potentially displace a lot of workers driving trucks and taxis.
  • One thing that insurers will need to be worked out is how to insurer a driverless car since there will not longer be any actual drivers connected to that car.  So long age, sex and marital status since young males will be the same risk as older drivers.
  • An article about customer retention in the auto insurance sector.
  • CANATICS continues to grow.

Personal Injury Lawyer Launches a Constitutional Challenge Against Bill 15

Joseph Campisi, a Toronto area personal injury has launched a constitutional challenge to Bill 15, Fighting Fraud and Reducing Auto Insurance Rates Act, 2014.  The bill received Royal Assent in November 2014 and introduces a number of changes to the auto insurance system including:

  • moving SABS disputes to the Licence Appeal Tribunal
  • introduce  regulation to the towing and vehicle storage industries
  • authorize the province to reduce vehicle storage costs.

However the likely the trigger for the action is the provision in the bill that takes away the right of accident victims to take disputes regarding accident benefits to the courts instead of arbitration.  This provision was opposed by both plaintiff and defense lawyers, accident victims and health professional groups. Below is post on Joseph Campisi’s blog regarding his action.

Joseph Campisi, lawyer and advocate, is launching a constitutional challenge in the Ontario Superior Courts.  Mr. Campisi is seeking a declaration from the courts that parts of the legislation that were recently passed by the Liberal Government are discriminatory and unconstitutional and should be inoperative.
“The right to access the Superior Courts is a fundamental right for Canadians.  I am concerned that the recently proclaimed legislation will deny this right to individuals who have been severely disabled.” said applicant and noted Personal Injury Lawyer Joseph Campisi.  “Historically, the deck has been stacked against collision victims.  The recent amendments to the legislation have turned a bad situation into a worse one for these vulnerable individuals.  No longer will these individuals be allowed to have the assurance of impartiality and independence that is a cornerstone of our justice system when litigating a claim against their own insurance company.  I could not stand idly by and let this happen.”
In the fall, of 2014, the Ontario Government passed Bill 15 which is titled Fighting Fraud and Reducing Automobile Insurance Rates.  One of the legislative amendments changes how disputes between insurers and insured are settled.  Historically, disputes could be brought before the Superior Courts or before sophisticated arbitrators with expertise in interpreting insurance law.  Bill 15 has changed how disputes are resolved by giving the sole adjudicative power to individuals who will be appointed at the whim of the Liberal Government.  These are the same decision makers who have jurisdiction on matters ranging from film classification to upholstered and stuffed articles. Unlike historical appointments, individuals without any specialization or guaranteed independence or impartiality will be ruling on disputes that can run into the millions of dollars and will determine the quality of life that an automobile victim will face going forward.
“This application will challenge Bill 15 on the basis that it violates disabled persons’ Chapter s.15(1) right to be free from discrimination.  Bill 15 is also being challenged based on s.96 of the Constitution which relates to the public’s right to have access to the courts.  The way in which Bill 15 is drafted opens the door to political interference.  The government of the day can choose who will hear any dispute and if the government does not agree with the arbitrator’s decisions, the government can get rid of the adjudicator the next day.  When it comes to lobbying the government there is little doubt as to who has the deeper pockets- automobile insurers or accident victims.  Introducing such laws is undemocratic and detracts from the rule of law.  This legal challenge will fight for disabled individuals’ right to fair treatment and the public’s right to access the impartial court system.”

Insurance News – Monday, August 18, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, August 18, 2014:

  • It takes four times longer to recognize new things when multitasking.  So it’s not surprising the reaction time for a distracted driver is impaired.
  • With all the talk about the Google car, Mercedes Benz has a better driverless car solution…for now.
  • User-based insurance is set to continue to have strong growth and is on its way to become an essential part of insurance industry’s offerings.
  • If a driverless car gets in an accident, Who is liable?

Insurance News – Tuesday, March 3, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, March 3, 2015:

  • IBC CEO Don Forgeron is suggesting that Ontario look at Nova Scotia on how to do auto insurance reforms.
  • If 90% of auto accidents are due to human error, then who becomes liable when there are driverless cars on the road?
  • In fact a University of Michigan study suggests that driverless cars will not be a panacea for road deaths, and could even worsen road safety for other drivers during the long transition period.
  • Apple is being sued for poaching engineers to work on driverless car technology.
  • A U.S. senator is urging the Justice Department to investigate insurance companies and auto repairs done at their ‘preferred’ repair shops across the country, because of safety concerns.

Insurance News – Saturday, January 10, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Saturday, January 10, 2015:

  • A British insurer may be the first in the industry to offer driving lessons for drivers’ weaknesses based on telematics data.
  • Florida auto insurance anti-fraud reforms that become effective on January 1, 2013 has created a drop in the number of personal-injury protection claims filed and dollars sought.
  • GM and OnStar will be partnering with a U.S. insurer allowing new car owners to opt into a service that will track driving habits during a 90 day span.
  • Google may be moving into the U.S. auto insurance market with a shopping site for people to compare and buy policies, as it continues to shift its attention to the automotive industry.
  • A Towers Watson study suggests that claim supervisors spend too little time reviewing files of direct reports which is impacting on profitability.

Ridesharing Bill Proceeds Through Ontario Legislature

Bill 53, Protecting Passenger Safety Act, 2015 received second reading this past week and has been referred to the Standing Committee on Social Policy.

The bill was introduced to address transportation network companies such as Uber and Lyft which have been operating in Toronto since 2012.  The bill was introduced by Liberal John Fraser and considered a private member’s bill which rarely get passed.  However, there is broad support for the bill and the Conservatives introduced a similar private bill (Bill 51) in December.

Bill 53 if passed would amends the Highway Traffic Act with respect to the offences related to picking up a passenger for the purpose of transporting him or her for compensation without a required licence, permit or authorization in section 39.1 of the Act.  The licence or permit may fall under the Public Vehicles Act, an airport authority, the Department of Transport Act (Canada) or a municipal by-law.  The bill does not address insurance requirements.

The fine for these offences is increased to a maximum of $30,000. A person who picks up a passenger for the purpose of transporting him or her for compensation without a required licence, permit or authorization also receives three demerit points. 

If a police officer believes on reasonable and probable grounds that a person has committed this offence after having been convicted of the same offence within the preceding five years, the officer shall suspend the driver’s licence and impound his or her motor vehicle for 30 days.

Insurance News – Wednesday, June 18, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, June 18, 2014:

  • Ontario Court of Appeal finds insurer must indemnify and and defend woman who let her driver’s licence expire.
  • The WSIB has been relying more on surveillance to investigate questionable claims.
  • Government prepares regulations to enable large-scale testing of self-driving cars on Dutch roads.
  • Driverless cars are going to change just about everything.
  • Other than Ekos, why did none of the polls pick up on a Liberal majority?

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.

Competition Bureau Supports Ride-Sharing Services

The emergence of Uber and other ride-sharing services has created increased competition for the Canadian taxi industry.  This has created a source of friction for the industry because of what they see is an “uneven playing field.”  Taxi operators are required to follow regulatory rules while ride-sharing services largely operate unregulated.  The Canadian Competition Bureau recently weighed in on the subject.
The Competition Bureau recently released a study, Modernizing Regulation in The Canadian Taxi Industry, which concluded that the competition in the sector has benefited consumers.  However, there needs to be a balance between increased competition and the need for regulation.
The taxi industry has operated largely unchanged for decades.  Regulators have created rules to govern price, vehicle safety and insurance requirements.  But the regulatory rules often restrict entry into the sector by limiting the number of taxi licences.  The number of plates usually does not keep up with demand for services which creates artificial scarcity, but also higher prices, poor service and long wait times.
Ride-sharing companies have changed the landscape by offering consumers lower prices, variable pricing (higher fares when demand is high), shorter wait times, and convenience.  The software application used by ride-sharing companies provides automatic payment and the ability to track the number of vehicles available in the local area.  The software also allows consumers to rate drivers which creates an incentive to provide better service.  Low rated drivers receive fewer ride requests.
The innovations introduced by Uber and other similar service providers have benefited consumers.  There is a need for updated regulatory rules so that traditional taxi operators can respond to the competition.  But the one aspect not addressed by the Competition Bureau study is the insurance issue. 
In September 2015, Intact Financial announced plans to work with Uber to create products tailored for the ride-hailing service, after concerns emerged that person auto insurance policies may not cover drivers using their personal vehicles for commercial gain.   In the meantime, Uber claims it has adequateinsurance coverage and that every ride on the UberX platform is backed by $5 million of commercial auto insurance, which covers both bodily injuries and property damage stemming from a crash.  However, Alberta government said in July that it had determined the policies do not meet the requirements of the province’s Insurance Act.  It’s all very confusing.  

Ride-sharing services are here to stay.  Consumers will benefit but only if the regulatory rules and updated and the insurance issues are addressed.

Insurance News – Monday, July 27, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, July 27, 2015:

  • Google self-driving car accidents show why humans don’t belong behind the wheel.
  • Why the difference between self-driving and autonomous vehicles really matters.
  • New towing rules in the Town of Richmond Hill are working.
  • It’s almost August and the Ontario’s rate reduction promise will not be met.
  • City revenues may fall drastically when driverless cars provide fewer fines.
  • How Uber is ending the dirty dealings behind Toronto’s cab business.