Resuming the debate adjourned on March 25, 2014, on the motion for second reading of the following bill:
Bill 171, An Act respecting
insurance system reforms and repair and storage liens / Projet de loi
171, Loi concernant les réformes du système d’assurance et le privilège
des réparateurs et des entreposeurs.
The Acting Speaker (Mrs. Julia Munro): The member for Dufferin–Caledon.
Ms. Sylvia Jones:
As was pointed out, the last time we debated Bill 171, the Fighting
Fraud and Reducing Automobile Insurance Rates Act, was March 25. I’m
just going to sort of carry on from that—almost finished.
Although, before I do, I want to
talk about how many government bills are currently up and awaiting
debate, because I think it calls into question the priorities—if there
are any—of the Liberal government.
Right now, today, we have 28
active government bills sitting on the docket, all of which can be
called, as we all know, by the government House leader at any given
point. The fact that we’ve got 28 of them—my dad used to say, “If you
have too many priorities, you don’t have any priorities.” I do question
whether we need to have a little more focus, a little more direction on
where this government wants to go in terms of debate on legislation that
needs to be passed.
Bill 171, Fighting Fraud and
Reducing Automobile Insurance Rates Act, is a fascinating piece of
legislation, but is it the priority of this government? I’ll leave it at
that.
The Acting Speaker (Mrs. Julia Munro): Comments and questions? The minister for seniors.
Hon. Mario Sergio: She wasn’t up. I will cede, Madam Speaker.
The Acting Speaker (Mrs. Julia Munro): All right. The member for London–Fanshawe.
Ms. Teresa J. Armstrong: That was very gracious of the minister for seniors. I appreciate that very much.
I want to just add a couple of
minutes to the comment the member has made. She’s right; when you have
too many priorities, you don’t have any at all. There should be some
focus on where this government is going. I point to the budget, and it
will be interesting, when the budget comes to the House, to find out
where their priorities are for the people of Ontario, for the people of
the province, and how they’re going to improve things for the people of
Ontario.
We’re going to be speaking about
Bill 171. This bill was brought forward by the Minister of Finance with
respect to addressing the issue of the high cost of insurance. We had
brought that to light, that people could not afford the cost of
insurance the way things were going in this province. We asked this
government to look at a 15% decrease. We also see that they’ve sent this
bill to the table, Bill 171, and it’s supposed to address that fraud
issue, because that was something that was very much discussed in
committee. I know we’re going to have debates today and I know that will
come up, and how this bill is effectively working on that topic to help
fraud and so, in that case, reduce auto rates. But we do have our
doubts that that specific fraud piece in this bill is going to
specifically address the premiums section that people pay for their auto
and home insurance.
The Acting Speaker (Mrs. Julia Munro): Further comments?
Hon. Mario Sergio:
Now I’ll take my two minutes. I know the member from Dufferin–Caledon
has spoken at quite some length on this particular bill and indeed it is
one of the many bills that we do need to pass in the House. This is an
important one and it has been talked about already for quite some time.
As we all know in the House, last
year, as we recall, the House passed legislation that would bring some
relief to our drivers in Ontario, and for good reason. As you know,
insurance rates are what they are, but we have come a long way, and
since last year we have already seen a shift in premiums, in insurance
rates. We see insurance companies advertising their lower premiums
already. We would be telling our consumers to check around instead of
taking a blank response from their present insurance company. Rates are
coming down. If the present bill, Bill 171, were to be approved, it
would move closer to becoming a reality. I think this is what we all
want: to bring some relief to our taxpayers.
What would the bill do? It’s
fighting fraud. We all know that there is a problem with that. Also,
there is one problem with the storage of automobiles. They’re sitting
too long and therefore charging too much.
We have already spoken about this
particular bill in the House many times—both sides of the House. We have
the responsibility to pass every bill that, hopefully, is introduced,
but this one here is one of those that I think is important. I think we
should do it, and I hope that we can do it as quickly as possible.
The Acting Speaker (Mrs. Julia Munro): Further comments?
Mr. John O’Toole:
I was here the last day that the member from Dufferin–Caledon was
speaking. In her 20 minutes, she did summarize a number of the concerns
that we have on this bill.
Responding here to the promised
15% rate reduction—is completely a false advertising issue, in my
opinion. The issue of fraud has been dealt with in special reports. The
health care and assessment issues, the towing issues, the auto repair
and fraud within that, the victims, and the whole group of people
insured under the facilities provision are not thoroughly dealt with in
this Bill 171. And our critic on the file, Jeff Yurek from
Elgin–Middlesex–London, has consulted widely and has come up with some
very significant supportive amendments. All of us would like to see
reform to auto insurance to be a mandatory affordable product. As such,
it should go to committee and receive the proper input, just so it
doesn’t become another football in the arena of making political and
electoral promises, really is what I see.
They promised it in response to a
request, in fact, by the NDP—the coalition agreement that they had with
the last budget. That’s where this came from. I can tell you right now, I
have very little confidence that this will actually happen. My sense
is, if you look at the issues and how they’re dealing with it, they’re
actually giving rate rebates to the bad drivers in Ontario right now.
The good drivers, like myself—I actually had a slight increase, and I’m
paying a high rate of insurance. So the evidence isn’t there to support
anything they’ve said.
I support the member from
Dufferin-Caledon for putting her statements on the record. This bill
certainly has to go to committee, and I think our finance critic and
others will be commenting more thoroughly on this in just a few minutes.
The Acting Speaker (Mrs. Julia Munro): The member from Kenora–Rainy River.
Ms. Sarah Campbell:
Thank you, Speaker. As the previous speaker just said, he has very
little confidence that this bill will actually go forward, that it will
be passed and that—I’ll paraphrase a little bit, but he seems concerned
that we’ll continue to go on this little merry-go-round.
It’s true that the rate of auto
insurance in the province of Ontario has been a big issue over the past
many years but especially over the past couple of years, as my party has
prioritized seeing some significant movement for the people of this
province. In Kenora–Rainy River—I’m going to speak to this a little bit
later—we don’t often have the luxury of public transportation, and so
that means, as with many rural areas of this province, we have to rely
on our vehicles to get us from point A to point B.
My concern is that this bill
actually will pass. I don’t want to see it pass in its current form,
because in its current form the only thing that it does to help people
across this province is to have a flashy title: Fighting Fraud and
Reducing Automobile Insurance Rates. But if you look at the content of
the bill, there’s actually very little in there. It doesn’t seem to do
anything in the way of helping individuals in this province reduce their
rates, but it does seem to do a whole lot to help auto insurance
companies to bring down their costs and maximize their profits.
I do welcome hearing more debate
on this. I welcome seeing some substantive changes in committee, should
it make it to committee, and we’ll continue this discussion a little
later on this afternoon.
The Acting Speaker (Mrs. Julia Munro): The member for Dufferin–Caledon has two minutes to respond.
Ms. Sylvia Jones:
To the member from London–Fanshawe, the minister responsible for
seniors, the members from Durham and Kenora–Rainy River, thank you for
your comments.
Bill 171 is an issue.
However—there’s always a “however,” Speaker—I was at a home show all
weekend—Friday night, Saturday and Sunday—manning my booth. And you know
what is truly an issue for the residents in Dufferin–Caledon? Do you
know what, without almost any exceptions, people were talking about?
Mr. Paul Miller: On a point of order, Madam Speaker.
The Acting Speaker (Mrs. Julia Munro): Not during the two-minute—
Mr. Paul Miller: Well, we don’t have a quorum, Speaker.
The Acting Speaker (Mrs. Julia Munro): I’m going to ask the Clerk to check.
The Clerk-at-the-Table (Ms. Tonia Grannum): A quorum is not present, Speaker.
The Acting Speaker ordered the bells rung.
The Clerk-at-the-Table (Ms. Tonia Grannum): A quorum is present.
The Acting Speaker (Mrs. Julia Munro): The member for Dufferin–Caledon, you have a few moments to wrap up.
Ms. Sylvia Jones:
Thank you, Speaker. As I was saying, certainly auto insurance is a
concern for the people in Dufferin–Caledon, but almost without
exception, what people were raising with me during the home
show—operated by the Lions Club—was energy costs. We’ve gone through an
incredible winter. Quite frankly, it didn’t matter what kind of power
you were using, you were going through huge increases. Many of the
questions and many of the concerns were basically, “Why is this
happening? Tell me why it’s all happening with so many of them across
the sectors?” Which, of course, led to some very interesting
conversations about cause and effect, the Green Energy Act, subsidies
for wind and solar power, and what that has actually done to energy
rates in Ontario. Those, of course, were the constituents who were lucky
enough to be receiving their Ontario hydro bills. There were a number
of them who were asking for my assistance—believe it or not—to get a
bill from Hydro One so they could pay it.
In terms of Bill 171, I would be
pleased to have this referred to committee for further debate and
amendments, but at some point we have to get—
The Acting Speaker (Mrs. Julia Munro): Thank you.
Ms. Dipika Damerla: —I’d like to point out that the member opposite wasn’t speaking to the bill.
The Acting Speaker (Mrs. Julia Munro): I listened carefully to the—
Interjections.
The Acting Speaker (Mrs. Julia Munro): Further debate?
Mr. Paul Miller: On a point of order?
The Acting Speaker (Mrs. Julia Munro): Yes, a point of order.
Mr. Paul Miller:
I’d just like to point out that the member, in my humble opinion, was
addressing around the bill, and that member who complained wasn’t here.
That member wasn’t even here.
Interjections.
The Acting Speaker (Mrs. Julia Munro): Order.
The member from London West will take the floor.
Ms. Peggy Sattler:
I am pleased to rise today on behalf of my constituents in London West
to speak to Bill 171, the Fighting Fraud and Reducing Automobile
Insurance Rates Act. From its title this bill certainly sounds like
something that would be important to the people I represent, because
they have been waiting a long time for a reduction in auto insurance
rates. In fact, I think many of my constituents would be glad even if
the bill was called “the fighting fraud and not increasing auto
insurance rates act,” because at a time when people were led to believe
that rates would go down, what they’ve been seeing instead are increases
in rates.
Even people with no history of
accidents or tickets are seeing their rates increase, with no recourse
or explanation from insurance companies. One constituent, a single
mother of two who has never been in an accident, saw her bill increase
by 10%. She just wrote to me this month asking why big insurance
companies are allowed to get away with hiking up rates by exorbitant
amounts without providing any legitimate reasons for doing so.
Many other constituents in London
West have contacted me to ask when the 15% reduction in auto insurance
that was promised by the Liberal government will come into effect. My
colleagues and I on this side of the House know that families in our
communities are struggling to make ends meet, which is why we insisted
that the government include a 15% rate reduction in last year’s budget.
But, as I mentioned, not only are my constituents not seeing those
promised rate reductions; they are seeing their rates increase. As we
all know, rate increases, whether it’s auto insurance, hydro or gas,
have a disproportionate impact on people with low incomes and on seniors
and others with fixed incomes. In the case of auto insurance, people
who drive don’t have a choice of whether or not to buy insurance. The
government, quite sensibly, requires anyone who drives to be insured,
which means that the government has an obligation to regulate the
industry and make sure that rates are fair and that regulations reflect
an appropriate balance between industry needs and protection of the
rights of consumers.
The other part of the title of
this bill, “Fighting Fraud,” is also something that is important to the
people of London West and to all Ontarians. Fighting fraud is definitely
something we can all agree on. We know that the costs of fraud end up
being directly passed on to the consumer and are used to justify premium
increases, so it appears from its title that Bill 171 is designed to
rid the system of fraud, which will reduce costs for insurance
companies, which can then be used to lower insurance rates.
Unfortunately, the only thing this
bill really does is reduce costs for insurance companies. It is another
gift for huge insurance companies at the expense of auto insurance
policyholders and accident victims. It will do nothing to fight fraud
and nothing to reduce insurance rates.
I want to begin my remarks on Bill
171 with an overview of what the legislation includes and then move on
to why this bill is problematic for my colleagues and I in the NDP
caucus.
First, I want to outline the parts
of the bill that my colleagues and I have very little trouble with.
These aspects deal with the licensing of insurance agents and adjusters
and clarification of repair and storage liens.
Adding a level of accountability
for insurance agents and adjusters is completely understandable and
acceptable. Our caucus has not received any complaints or concerns about
this aspect of the bill. More oversight is always a good thing,
especially when we are dealing with a product that the government has
made mandatory for Ontarians.
In terms of the provisions of the
bill dealing with repair and storage liens, we know that there were
issues surrounding the towing and storage of vehicles after accidents
had taken place. This bill deals with that in a non-contentious way. The
bill will reduce the amount of time a vehicle can be stored and
accruing charges from 60 days to a shorter time frame.
As a caucus, we have no problems with either of these aspects of the bill.
The two key parts of the bill that we find troublesome, however, have to do with dispute resolution and prejudgment interest.
In terms of dispute resolution,
currently, accident victims have the right to go to court or to
arbitration if they believe they have been wrongfully denied benefits by
their insurance company. However, under the proposed legislation, the
right to sue will be taken away entirely. Subsection 280(3) of this bill
precludes the ability for someone to bring an action against their
insurance company to court, which we regard as a fundamental abrogation
of the rights of the people in Ontario. As one of my constituents who
wrote to me about this bill said, “Bill 171 proposes to deny accident
victims due process and the right to appeal in motor vehicle benefit
disputes with their insurance company. Removing a person’s fundamental
right to sue is a breach of one’s fundamental rights to justice, which
clearly ought to supersede any legislative intent.” This concern about
access to justice for victims is shared by every member of my caucus.
Denying accident victims access to the courts represents what we see as
one of the most glaring deficiencies of this legislation as currently
proposed.
Under Bill 171, instead of going
to court, claimants who feel that they have been denied benefits must
advance their claims to the Licence Appeal Tribunal in the Ministry of
the Attorney General. Instead of providing recourse to an independent
judicial system that safeguards the fundamental rights of citizens,
people who have been injured must take their claims to a tribunal.
Reading the speeches from the
members on the other side of the House, I’ve heard that there is a view
that moving the dispute resolution process to the Licence Appeal
Tribunal was a recommendation of Justice Cunningham in his comprehensive
report. However, as pointed out by my colleague the member from
Bramalea–Gore–Malton, Justice Cunningham indicated only that there
should be a separation between FSCO as an adjudicator and FSCO as a
regulator. It’s important to keep in mind that arbitrators at FSCO are
already independent; not only that, they are salaried, with stable jobs
and lots of experience dealing with complicated issues.
The Licence Appeal Tribunal, by
comparison, deals with liquor licence violations and driving-related
offences, not complex issues like liability. The tribunal may be
appropriate to handle some of the disputes in the system, but tribunal
members are simply less qualified and experienced than FSCO arbitrators,
and moving the dispute resolution process to this venue makes little
sense. It may actually harm vulnerable accident victims who are seeking
redress from insurance companies.
To be clear, Justice Cunningham
never suggested that the dispute resolution process be moved to the
Licence Appeal Tribunal. As a caucus, New Democrats have significant
concerns about the impact this will have on Ontarians.
Further, as a researcher who
believes that policy should be based on evidence, I want to draw MPPs’
attention to the fact that there is absolutely no evidence to suggest
that moving the dispute resolution process in FSCO to the Licence Appeal
Tribunal will contribute to reducing costs. In fact, it is even
possible that moving the process to the Licence Appeal Tribunal may
actually add costs to the system and be to the financial detriment of
the province.
What is clear is that these
changes, removing access to the courts and replacing independent
judicial review with a tribunal, do not have anything to do with
fighting fraud. They are mostly about making it easier for insurance
companies to wrongfully deny benefits and delay settlements and will
make it harder for injured Ontarians to collect what they are rightfully
owed. The changes add further complexity and costs to an already
complex and costly process. Previously, if an accident victim was denied
benefits and was injured because of someone else’s fault, they could
seek redress from the court system on both counts. Now an accident
victim who wants to dispute benefits will have to take his or her case
to the new arbitration system while also pursuing their legal suit in
court. They will have to pay a lawyer to bring in two entirely different
cases in two entirely different systems, one in the courts against the
person responsible and one in the arbitration system against the
insurance company that wrongfully denied benefits.
Moving beyond this, a significant
disadvantage of this proposed system is that if the accident victim is
successful in proving that the insurance company should have paid the
claimed benefits, the insurance company only has to pay a tiny fraction
of the legal costs, unlike in the court system. In effect, this bill
places the financial burden of extra legal costs on the victim, who is
already in a vulnerable situation. We know that our complex auto
insurance system makes it extremely difficult for people to access the
benefits that they are reasonably entitled to, and this proposed change
will only exacerbate this issue. It may lead people to just give up
because they cannot afford the fight. It is hard to understand how this
serves to protect the interests of Ontarians, especially the most
vulnerable members of our population.
The other flaw in this legislation
is the provision that deals with prejudgment interest. Bill 171 will
change a 30-year-old rule that has been very important to people who
have suffered injuries in Ontario. Prejudgment interest on pain and
suffering is and always was intended to compensate an innocent victim
when the negligent person’s insurance company delays paying damages.
Simply put, it ensures timely payment to victims for pain and suffering
damages by insurance companies.
As we know, current legislation
says that insurance companies are required to pay 5% interest on
whatever is owed for pain and suffering. For example, if a person has a
serious injury and is owed $50,000 for pain and suffering and the
insurance company delays payment for three years, the insurance company
will pay about $7,500 in interest. The reason the interest rate is set
at 5% is to encourage insurance companies to settle quickly and not to
drag their heels and delay the issue over many years.
The interest rate serves to
protect the injured party from long delays in collecting what they are
entitled to. Bill 171 changes this policy, a policy that protects the
interests of the people of this province. It makes it easier for
insurance companies to increase their profits by lowering the interest
rate to 1.3% and allowing it to be modified quarterly. This provides a
further disincentive for insurance companies to settle claims. Instead
of paying out settlements to avoid a 5% interest penalty, insurers can
hold on to this money and invest it at a profit, knowing that they will
only have to pay the low rate of a 1.3% penalty when they finally
settle.
How this policy will serve to
protect the interests of everyday Ontarians is not at all clear. We
already know that insurance companies can make money by delaying the
claim process. This new legislation will mean that they can benefit even
further on the backs of victims. Again, it is hard to understand how
this has anything to do with either fighting fraud or reducing auto
insurance rates, because all of the evidence suggests that this change
is nothing more than another gift to Ontario’s already profitable
insurance sector.
As I’ve been explaining, this
legislation, as it is currently proposed, will do more harm than good
for the people of my community in London as well as across the province.
This is what happens when legislation is rushed through. Within just
two weeks of the release of Justice Cunningham’s report, Bill 171
suddenly appeared in this House as a way to address some of the issues
presented in the report. The government’s rush to introduce legislation
means that there was no consultation with the public. Perhaps more
concerning, there was no consultation with experts in the field. I think
that we would all agree that the best and most effective policies are
evidence-based. It’s clear that this legislation lacks proof or evidence
that the steps taken in this bill will reduce costs.
On this point, quoting from
correspondence with another one of my constituents in London West, “the
current amendments were not introduced with consultation or
consideration of the accident victims in Ontario.” Again, I think the
problems that my colleagues and I in the NDP caucus who have spoken to
this bill—these concerns about Bill 171 arise because of the lack of
consultation or evidence upon which this proposed legislation is based.
I would also like to highlight the
fact that the legislated 15% reduction in auto insurance premiums—or
maybe I should say expected reduction, because we have seen little
action on this promise. These rate reductions have led to auto insurance
companies raising concerns about the impact of the reductions on their
profits. This bill may simply reflect the industry’s push to protect
their profits and in fact get some of their profits back. The bill is
mostly about cost containment.
I think we need to put some of the
responsibility for cutting of costs on the auto insurance companies and
not just on the people of Ontario. The changes that were made in 2010,
which essentially capped the amount of money that insurance companies
had to pay out, represented a huge $2-billion windfall for insurers. At
the time, the government said that this would lead to a reduction in
rates, but we haven’t seen that. Not only have these cost savings not
been passed on to consumers, but it seems that the insurance companies
are not doing their part to cut fat and increase efficiency in the
system. We should be looking at insurance companies to lead the way in
cutting costs, instead of exacerbating an already negative situation for
innocent victims in Ontario. This proposed legislation does nothing to
address the lack of efficiencies in the system, and I think that that’s
something we need to carefully consider in the future.
In conclusion, I welcome further
explanation from the government on how this legislation actually has
anything to do with fighting fraud or reducing auto insurance rates,
because it’s not at all clear that this bill will do either of those
things. As I’ve stated earlier, the many constituents who have been
contacting my office to express concerns about Bill 171, about
increasing auto insurance rates and about the lack of follow-through on
the part of government to implement the 15% reduction promised in the
last budget, do not believe that this legislation is requesting to
address their concerns.
Vulnerable members of our
community will be hit the hardest by the provisions of this bill. It
will take away a person’s right to due process and access to legal
redress, which is a significant concern for our caucus. Beyond the lack
of evidence that moving the dispute resolution process to the Licence
Appeal Tribunal will reduce costs in the system, I want to make sure
that all members here understand the negative impact that lowering the
interest rate will have on pain and suffering for the people of this
province. The proposed legislation will in fact incentivize insurance
companies to delay settling claims and make it easier for insurers to
make a profit by delaying victims their rightfully owed settlements.
For my constituents in London
West, this bill offers little relief to the high costs of auto
insurance, which is what New Democrats will continue to push for.
I thank you for the opportunity to
participate in this debate and look forward to hearing the comments of
other members on Bill 171.
The Acting Speaker (Mrs. Julia Munro): Comment and questions?
Mrs. Amrit Mangat:
I’m pleased to stand and debate Bill 171, Fighting Fraud and Reducing
Automobile Insurance Rates Act. Automobile insurance fraud is an issue
that I have been aware of for some time. I regularly hear from my
constituents that they are sick and tired of the fraud within the auto
insurance industry. Auto fraud is the most dreadful beast that must be
tackled first and foremost. This is what the bill is addressing. This
bill would improve consumer protection, reduce cost and uncertainty, and
strengthen Ontario’s auto insurance system.
I heard from the member the
Kenora–Rainy River and the member from London West. They said that this
bill would not address the issue of fraud, and the member from
Kenora–Rainy River said that it has a flashy title, nothing more than
that. The record of the respective governments tells the whole story. It
is our government that has kept the auto insurance rates below the
inflation rate. When the PCs were in power, the rates went up 45%, and
when the NDP were in power, rates went up 27%. The NDP ran on the
platform that they would make it a public asset, but they failed to
deliver it. But this bill will definitely address the issue of fraud. If
this bill is passed, this would further reduce cost, fight fraud and
protect consumers.
The members from Durham and
Dufferin–Caledon said that this should go to committee as soon as
possible—and I echo their comments—so that we can hear the public and we
can hear the—
The Acting Speaker (Mrs. Julia Munro): Thank you. The member for Nipissing.
Mr. Victor Fedeli: Thank you, Speaker. I appreciate the opportunity to talk about this bill once again.
You have to look at what has
happened throughout some of the history in this whole auto insurance
sector, especially in the last couple of years. State Farm, who once
held 11% of the insurance sector in Canada, has gone from Canada. There
is no State Farm. Those TV commercials that we see for State Farm every
day and every night: You can’t get it here. They left. In the reason
they left Canada, they cited the Ontario auto insurance market as their
reason why they’ve left Ontario. You also watch TV and you see Flo from
Progressive. Speaker, you need to know that there is no Flo here either;
you can’t have that insurance here in Ontario. This file has been
unbelievably mismanaged over the last 10 years.
This whole bill that they’re
talking about: We’re eager to get it into committee so we can fix this.
It has unintended consequences. Insurers today—those few that have
actually stayed in Ontario—are ridding their books of even the most
moderate-risk drivers. They’re just cleaning house and sticking with
those drivers so they can try to move on in Ontario.
This bill does nothing more than
allow the Liberals to continue to scramble and try to keep the promise
that they made to the NDP when they bargained for their support during
the last budget.
The Acting Speaker (Mrs. Julia Munro): Further comments?
Ms. Teresa J. Armstrong:
I’m glad to contribute to this debate after hearing the comments, or
the contributions, that were made by the member from London West.
I have also received, as we all
have, phone calls about insurance premiums. Those are one of the biggest
costs, sometimes, in a household, depending on how many vehicles you
have and how many drivers you have. People just can’t afford those kinds
of increases that have been happening time and time again.
When we presented the fact that
this government—in 2010, the insurance companies changed the coverage
under accident benefits and reduced those coverages, and you can see
that that action resulted in insurance companies having $2 billion in
profits. So it does make sense that consumers, who pay these insurance
premiums, should see the benefit of that change. That was what we had
talked about here in the Legislature, but the proposal that this
government has decided to address that current issue with, with regard
to people affording to pay their insurance rates, is Bill 171.
Their answer to it is, “Fraud is
the bogeyman in the insurance industry that’s causing all these rates.”
Fraud is certainly a part of why rates increase, but this bill doesn’t
address the whole situation. Making accident victims that are injured go
through a two-tier legal system does not help the victims; it only
helps the insurance companies to continue to make more profit. When are
we going to see that relief in premiums? From this bill? I don’t think
it’s going to happen through that.
I’m really interested, when it
does go to committee, to listen to some of the suggestions about how
improve this bill. I think that having the two-tier system disadvantages
accident victims from actually exercising their right to make sure they
do get payments for their injuries.
The Acting Speaker (Mrs. Julia Munro): The member for Scarborough–Agincourt.
Ms. Soo Wong: Thank you, Madam Speaker. I’m pleased to be a part of the discussion today on Bill 171.
I just heard very distinctly from
the member from London West—her comments about the rush to bring the
bill to the Legislature and the lack of consultation. Let me put this on
record: Those of us who have sat on the Standing Committee on Finance
and Economic Affairs have travelled across the province—let’s go on
record as it is—to talk about auto insurance and auto insurance fraud.
Numerous witnesses came before the committee across Ontario—not just
here at the Legislature; across Ontario—to talk about fraud and auto
insurance fraud. Madam Speaker, to say that it was rushed to bring the
bill before the House is not correct. I want that to be on record.
I listened intently to what the
member said about some of the comments, that the third party does
support—and I listened attentively. This second reading debate is very
informative. I welcome those comments so that we can improve the bill
when we go back to the committee for further enhancement of the bill.
But to say the bill was brought to this House in such a rush is not
accurate.
I also listened attentively to my
colleague the member from Mississauga–Brampton South, who has spoken
passionately to this issue for a number of years that I’ve been here as a
member. The member from the third party, from Bramalea–Gore–Malton,
also expressed concern about fraud.
Let’s go on record. Let’s hear the debate. I fully agree. Some conversation—
The Acting Speaker (Mrs. Julia Munro): Thank you. The member from London West has two minutes to respond.
Ms. Peggy Sattler:
I want to thank the members from Mississauga–Brampton South, Nipissing,
London–Fanshawe and Scarborough–Agincourt for their comments. There
were several interesting things that were said during those comments. In
particular, the member from Mississauga–Brampton South said that her
constituents are sick and tired of fraud in the auto insurance industry.
I think this strikes a chord with a lot of Ontarians. A lot of
Ontarians agree that we need to do something to get rid of fraud.
The problem is, Bill 171 is not
the solution. There is nothing in Bill 171 that appropriately addresses
the fraud that exists within the system. Instead, as my colleague the
member from London–Fanshawe pointed out, it creates a cumbersome process
for dispute resolution that requires victims to go through the court
and a tribunal. It disadvantages accident victims from exercising their
rights within our legal system.
The member from
Scarborough–Agincourt disputed the fact that there was a lack of
consultation, but there was no consultation with accident victims about
how the provisions in Bill 171 would affect them, their access to
justice and their ability to pursue their rights through the system and
ensure that they are able to collect the benefits for which they are
intended.
I also appreciate the member from
Nipissing, who talked about the unintended consequences of the bill,
which is what our caucus has been emphasizing: that the bill shuts out
legal recourse for victims of accidents.
The Acting Speaker (Mrs. Julia Munro):
Pursuant to standing order 47(c), I am now required to interrupt the
proceedings and announce that there have been more than six and a half
hours of debate on the motion for second reading of this bill. This
debate will therefore be deemed adjourned unless the government House
leader specifies otherwise.
Hon. John Gerretsen: Although a lot has been said on this bill, we would still like the debate to continue.
The Acting Speaker (Mrs. Julia Munro): Further debate?
Mr. Rick Nicholls:
It’s my honour and privilege to in fact rise today to debate Bill 171,
the Fighting Fraud and Reducing Automobile Insurance Rates Act, this
bill that I will be supporting, and I suspect many of my colleagues will
be supporting as well.
Reducing automobile insurance
rates is something that the Ontario PC Party takes very seriously. Our
critic, the member for Elgin–Middlesex–London, has had laser-like focus
on auto insurance reform over the past few years and has done a terrific
job putting forward solid ideas that would improve auto insurance here
in Ontario.
This all comes back to the
promise made last year by Wynne’s Liberal policy development team, the
NDP. They promised to cut auto insurance rates by 15%. That was the plan
and it sounded nice. You could fit the policy on a bumper sticker or,
to update that analogy, you could even tweet their whole plan on auto
insurance reform. There’s something else out there: “Call so and so; 15
minutes will save you 15%.” Well, as we all know, the NDP dutifully
propped up the government that we have before us today, the same ones
that stand up and criticize with a straight face each and every day in
the House—and auto insurance rates all across Ontario were immediately
cut by 15%.
Auto insurance rates did not
decrease by 15% across the province. In a lot of places and for a lot of
drivers, they didn’t decrease at all. In many cases, in my riding of
Chatham–Kent–Essex, rates quickly increased. Last summer, my
constituency offices in Chatham and Leamington received numerous calls
from irate drivers who could not believe that their insurance rates were
actually increasing. Some of them even remarked that they felt like
they had been misled by the government and the NDP on this issue.
This is what happens when you
oversimplify a problem and over-promise on its solution. People get
frustrated and lose faith in their political institutions. This is, in
fact, the problem with the bumper-sticker policy approach of the third
party. Auto insurance is an incredibly complex file, and meaningful
changes will have to be carefully thought out, not oversimplified in a
position that could fit into a tweet. There was no plan, only a wish to
cut auto insurance rates by 15%, as if by magic.
Thankfully, Bill 171 contains
some meaningful auto insurance reform that will hopefully benefit all
Ontarians. In the past, I have met with various auto insurance
stakeholders to discuss the many ways that we can begin to tackle the
problem of soaring premiums. Cracking down on fraud is something that is
brought up by almost every single group, and it’s something that we
need to take action on now. In fact, the bus stop just outside, at
College and University, had an ad up from the Insurance Bureau of Canada
that says, “Stop auto insurance fraud.” We’re reminded of that all the
time.
I’m glad that the government is
taking some meaningful first steps to tackle this key element of auto
insurance reform. I’m hopeful that it can undo some of the damage that
was caused by the reckless and irresponsible approach to auto insurance
reform that we saw last year.
Two worrisome trends that we in
the Ontario PC Party keep a close eye on are the decrease in the
availability of insurance and the fact that bad drivers have so far
gotten the biggest reductions in their premiums. Last year, State Farm
Canada sold its entire property and casualty business in Canada to
Desjardins Group. Moody’s Investors Service noted that 65% of State Farm
Canada’s business is concentrated in the Ontario auto insurance market,
which it described as “a competitive and higher-risk market.”
Speaker, we all know what their
motto was: “Like a good neighbour, State Farm is” here—well, was here.
It’s worrisome that such a large company would decide to pack up and
leave this province.
The following quote from a Globe
and Mail article written last July predicted this potential negative
consequence: “Without the right cost reduction measures, the decrease in
premiums would be a challenge for insurers to implement, and could
curtail the availability of coverage in the province.”
And now we are starting to see
examples of the fallout in many of our ridings. We are starting to hear
from numerous constituents, in a variety of ridings, that drivers with a
few blemishes on their record are being dropped by their insurance
carriers. These carriers are refusing to renew their policy when the
current policy expires. That’s tragic, Speaker.
In New Jersey, they encountered
some similar issues when the state made a promise to cut rates by 15%
back in 1998. Many companies left the state at that time, which made it
difficult for New Jersey drivers to get insurance. While the rates did
come down by 15% over two years, the lack of available insurance led to a
27% spike in premiums in 2000, just two years later.
That’s not what we want to see
here in our province. We have started to see some of the warning signs
of a similar trend. By taking the necessary steps now, we can hopefully
avoid a spike in the rates a couple of years down the line. We need to
ensure that all Ontarians are able to have accessible and affordable
auto insurance.
The second negative consequence
of the unilateral cuts to insurance rates without the corresponding cost
savings is that bad drivers are getting the biggest discounts on their
premiums. In the most recent filings in January, we saw that the biggest
winners were those drivers insured by non-standard insurers. These are
companies that insure the worst drivers, including those with multiple
accidents and drinking-and-driving convictions. Most insurance companies
avoid these clients, but certain insurers fill that niche. These
non-standard companies and their corresponding rate reductions are as
follows: Perth Insurance, 15%; Pafco Insurance, 14.5%; and finally,
Echelon General Insurers, 8.7%. We don’t need to see good drivers pay
the price so bad drivers can get a big break on their auto insurance.
I’m sure that no member in this House wants this to be the case.
Unfortunately, this is what we’re seeing today, thanks in large part to
the actions taken by the government and their farm team, the NDP, last
year.
That said, Bill 171 provides us
with an opportunity to debate the matter in general and to start to
tackle the issue. This bill is a step in the right direction, and it
will hopefully undo the damage of past policy decisions on this file.
Really and truthfully, this bill
is a small step forward. There are a few significant cost savings that
will be achieved in this piece of legislation, but are there enough to
make this bill worthy of support? It’s questionable. Overall, the bill
is supported by the insurance industry and relevant stakeholders because
they consider it to be a step in the right direction. There are,
however, some concerns that we can hopefully sort out in committee,
which I will mention later in my remarks.
One issue that the bill seeks to
reform is prejudgment interest charges. “Prejudgment interest charges”
refers to the interest charges on expenses incurred during the period of
a dispute. Currently, the interest on pain-and-suffering amounts is
simply locked in at 5%. If passed, Bill 171 would tie this interest rate
to the market rate. Interest rates for out-of-pocket expenses incurred
during a court proceeding are already tied to market rates, so this is
simply a streamlining of practices. We, the PC Party, actually support
this proposed change.
Bill 171 also acknowledges the
problem of fraud and its effects on the insurance industry and the rates
that drivers end up paying. It addresses fraud in a couple of ways;
first, by looking at the health clinics that provide services for auto
accident victims. The bill proposes issuing licences for these health
care providers. This is meant to deal with the fraudulent practices of
certain health clinics, mostly within the GTA, that tend to overbill
insurers or bill for unperformed services—not a good idea.
The issue of health clinics was
addressed in the anti-fraud task force report released in November 2012.
The PC Party has, in fact, called on the government to act on
recommendations in this report. To date, the Liberals have only
addressed four of the 38 recommendations. This bill would implement four
more, if passed. While this proposed change would help combat instances
of fraudulent health practices related to auto insurance claims, we
feel there may be a better approach to dealing with this issue.
Implementing this particular change would require additional bureaucracy
as well as inspectors. These costs would fall to the Financial Services
Commission of Ontario—FSCO—which by the way is industry-funded, meaning
that any additional costs would ultimately be shouldered by—that’s
right, Speaker—premium payers.
The anti-fraud task force report
also outlined another solution which we feel would have less negative
consequences for drivers across the province. Our critic echoed the
findings of this report and has called for the use of what we call
designated managers, who must be regulated health professionals. Having a
designated manager would be a requirement in order for clinics to bill
insurers through Health Claims for Auto Insurance, or HCAI—pronounced
“H-Kay”—for short. This electronic billing system could be used widely
in our province. HCAI is already in place, and health clinics seeking to
bill insurers already have to register with this system. We would not
be reinventing the wheel; rather, we would simply have better
utilization of the technology that is already in place.
HCAI is able to track invoices
from health clinics, and because of this, it is able to flag abnormal
billing patterns that indicate potentially fraudulent practices. The
advantage of using such a method is that there would be a severe penalty
for committing acts of fraud. Because they must use the electronic
system to bill insurers, fraudulent clinics could be cut off of it.
Finally, having a regulated
health professional responsible for the billing practices of each clinic
creates a disincentive for committing acts of fraud. Someone’s health
professional licence could be on the line, so they would have to think
long and hard about committing fraud.
Our proposed amendments would,
in fact, be a very responsible use of resources that are already in
place to increase accountability in the health care sector when it comes
to auto claims. I personally feel that this is the right way to go, and
I hope that the minister is open to these friendly amendments.
Another subject that this bill
seeks to address is repair and storage liens. This part of the act
requires body shops and tow truck operators to give notice of vehicles
in their possession to the owners of the vehicles in a reasonable time
frame. In particular, the bill covers instances where the storer has
reason to believe that the vehicle they are holding was received from a
person other than the owner of the vehicle. This would help to provide
fair value for drivers when it comes to storage and repair costs. This
can be thought of as a consumer protection amendment, and it is one that
we most definitely support.
One of the most meaningful
sections of the bill deals with reforming the dispute resolution system.
This goes back to a promise that the Liberals made back in the 2011
budget to review the system that is available to insurance claimants.
Currently, FSCO, the Financial Services Commission of Ontario,
administers the process. If a claimant is denied certain coverage as
prescribed by their statutory accident benefits by an insurer, they can
initiate a dispute. These benefits must be purchased by drivers, by law.
There are currently three injury
classifications under the statutory no-fault coverage on auto
insurance. These include minor injuries such as sprains or soft tissue
injuries, non-catastrophic injuries, and catastrophic injuries, which
include things like paralysis or loss of limbs. Most disputes are about
whether or not someone’s injuries are classified as minor or
non-catastrophic. This is a bit of a grey area, so it leads to many
disputes between claimants and insurers.
If someone tries to dispute a
decision made by their insurer, they must first go through a mediation
session with a FSCO-employed mediator. As members have mentioned, the
Auditor General noted in 2011 that the mediation phase was a severe
bottleneck that caused a significant delay in the overall process. At
that time, there were 30,000 cases in the backlog. Now, that number has
since been decreased to roughly 16,000, but this sizable backlog
continues to delay settlements being reached and adds additional costs
to the system. All parties can agree that the current practice leaves a
lot to be desired.
Bill 171 seeks to move the
entire dispute resolution system to the Ministry of the Attorney
General’s Licence Appeal Tribunal, which is already in place. This would
simply move administrative costs, not reduce them. It would now be
funded by tax dollars and not come out of auto insurance fees. If you
happen to pay taxes and insurance fees, you’re just paying from
somewhere else.
Lastly, this bill does not get
to the heart of the matter when it comes to the long wait times of
disputes. The issue is why so many of these cases end up as disputes in
the first place. The PC Party has in fact recommended using existing
medical assessment guidelines to have truly independent third party
assessments. This would have a number of benefits. It would make injury
classifications more black and white. By removing the grey area that is
currently found in the injury guidelines, we will and could very
possibly eliminate the need for many of these disputes.
Madam Speaker, we’ve also had
some strong feedback from lawyers representing both insurers and
claimants regarding Bill 171’s prohibition of using the court system
when a dispute involves a no-fault claim. Today, Ontario has a hybrid
insurance system that accommodates both tort claims, such as negligence
and pain and suffering, as well as no-fault claims, such as accident
benefits or home care. When disputes are not resolved in mediation, the
current practice is for the plaintiff and defendant to decide whether or
not to pursue the matter either in court or through an arbitrator. If
the bill passes as it is, those faced with cases that involve both a
tort and no-fault component would have to appear in court and in front
of a tribunal separately. This is inefficient and costly, and, most
importantly, it does not make sense from the claimant’s point of view.
As I had previously mentioned,
lawyers representing both sides of this issue have problems with that
particular section of the bill. I’m sure they will reiterate these
concerns in committee, where I hope we can in fact strengthen Bill 171.
In summary, this is a bill that
the Liberals are clearly fast-tracking through the House in an effort to
get a win on auto insurance before the budget is released and a
potential election.
With the fact that good weather
is fast approaching, I’m actually looking forward to contacting my
insurance broker, Ross Insurance back in Chatham, to get my little
sports car back on the road and enjoy this great weather. By the way,
the insurance rates aren’t so bad, either.
But, again, despite the
convenient timing of this particular bill, there are some good elements
in the bill, and this is one that I and my caucus will be supporting at
second reading.
The Acting Speaker (Mrs. Julia Munro): Comments and questions?
Mr. Paul Miller:
I was listening intently to the member’s presentation. It never ceases
to amaze me around this building when parties get up, and they’ll
criticize and tear a thing apart, and then they’ll say, “But we’ll be
supporting it.” You’ve got to wonder.
The real problem here is this:
Fraud is a big part of this. There’s no doubt about it. You’ve got your
chop shops. You’ve got your fake medical claims and stuff—all these
things. Certainly, that plays a part. But with all due respect, there’s a
good percentage of people in this province who drive without any
insurance at all. That’s the guy who hits you, and then they have no
insurance. But our government, in its infinite wisdom—and the police
only act under the legislation—they don’t do anything to these people.
They don’t lose their licence for not being insured—they might get a
little fine—they don’t suspend them. They don’t do enough to go after
the people who are driving illegally in the province. That happens all
the time; they don’t enforce it.
The problem in this province is
that the police don’t have the resources to stop every car that they
think may be insured or may not. They might pull you over if you don’t
have your updated sticker, but they haven’t got the time, the energy or
the resources to patrol it. That’s another huge thing.
The member mentioned this
insurance company leaving Ontario. They probably left Ontario because
they were only making a 75% profit instead of a 150% profit. That’s why
they left. If you look back in the history of Ontario, maybe the odd
little one, but no insurance companies have ever gone under. No banks
have gone under in Ontario.
Someone is making a lot of money
somewhere, and all of a sudden they’re not making enough, so they
decide to leave and put pressure on people and on the government by
going back to the States or wherever they come from. If that’s the way
they operate, go ahead.
The Acting Speaker (Mrs. Julia Munro): Further comments and questions?
Ms. Dipika Damerla:
I’d like to begin by addressing some of the comments by the member from
Hamilton East–Stoney Creek. He sounded a little disappointed that no
insurance companies or banks have gone under in Ontario. I think that’s a
good thing. It’s a good thing that no bank and no insurance company has
gone under. I’m a little confused as to why he sounded disappointed.
The other thing I wanted to
speak on: I’ve heard a lot of members say that they support the bill,
but they are suggesting that insurance rates are not reducing. I’m just
going to say this: If members think that an insurance company is
actually going to send a renewal notice saying, “Your insurance just
went down 15%,” that’s not the way the market works. But if you shop
around, you will most likely get a reduction in your insurance.
When my constituents call me and
say they’re facing an increase, what I tell them is to shop around. I
have found many instances where my constituents have called me back and
said—
Interjections.
Ms. Dipika Damerla: There have been many instances where my constituents have called me back and said—
Interjection.
Ms. Dipika Damerla:
They first call to say that their insurance rates have gone up. I
counsel them to shop around, and there have been cases where they have
called back and said, “Yes, insurance rates have gone down.” So you have
to shop around.
On the issue of some of those
anti-fraud provisions, as the member from Hamilton East–Stoney Creek
himself acknowledged, fraud is an issue, so this bill is a good start in
trying to fight that fraud.
In the meantime, I also want to
say that there are close to 50 insurance companies in Ontario that filed
reductions last Christmas, and I believe on April 1, another bunch of
insurance companies filed for rate reductions. We’ll see what happens.
If I can leave you with one thought: Shop around if you want your insurance rates—
The Acting Speaker (Mrs. Julia Munro): Thank you. Further comments?
Mr. Robert Bailey: It’s a pleasure to be here today and speak to this bill for a couple of moments.
I think the member from Chatham–Kent–Essex did a pretty good job of summation and a good analysis of the bill.
I’d like to give a
shout-out—we’re advertising insurance companies. I’d like to mention my
insurance company back home: Cam-Ron Insurance. I’ve been with them all
my life. My father was—
Mr. Paul Miller: That’s advertising.
Mr. Robert Bailey: He used them before me. Anyway, they’re a long-time insurance broker back in Sarnia–Lambton doing an excellent job.
As far as the bill here, as our
member from Chatham–Kent–Essex said, we in the Tory caucus intend to
support it at second reading. We want to get it to committee and improve
the bill. Bills always can be improved at committee. I had two private
members’ bills myself that went to committee. They were in pretty good
shape to start with, but we had improvements when it got to committee.
They’ve been passed into legislation, I’m proud to say, along with—my
colleague from Hamilton East–Stoney Creek actually was a cohort with our
bill, One Call. That’s an example of working together in this
Legislature. We worked together and we got that bill through—
Interjection: You just call one number.
Mr. Robert Bailey: Yes, One Call. That’s what the insurance business uses: one number. So they just had one call to make.
Maybe, John, when the Attorney
General leaves, that’s something you could do. You could start up an
insurance business and have a one-call system and we could all call you;
right? Everybody would know you.
Interjection.
Mr. Robert Bailey:
You don’t want to be called when you retire. He says, “Don’t call me.
I’ve had enough calls over the years. Don’t call me anymore.”
It’s going to be an interesting
debate here this afternoon. I look forward to hearing from the rest of
the members from all over the province. Everyone brings a different
perspective to these debates, so I look forward to this debate. There
are a lot of serious issues around insurance. As the member from
Hamilton East–Stoney Creek said, I have family in law enforcement, and
people do drive without insurance. So anything we can do to discourage
that, all the better.
The Acting Speaker (Mrs. Julia Munro): Further comments?
Ms. Peggy Sattler:
I want to thank the member from Chatham–Kent–Essex for his comments. I
listened intently. I see that there is a certain degree of consensus
around the need to fight fraud and the priority that all of our
constituents place on reducing auto insurance rates. We’re all getting
those phone calls from constituents who are not only not seeing their
rates go down, but are actually seeing their rates increase.
As legislators, we have an
obligation to do more than advise our constituents to shop around. We
have to ensure that there is an appropriate regulatory framework in
place to govern how rates are set and how victims of accidents have
recourse to justice if insurance companies are denying their benefits,
if they are unable to get insurance, and if they are a victim in an
accident.
So our concern on behalf of the
NDP caucus is that this legislation goes nowhere near far enough to
address those two concerns: fighting fraud and reducing premiums. We see
that there are some modest initiatives that will take some baby steps
toward reducing fraud, but the legislation, in fact, has a very negative
impact on accident victims. It creates, now, a two-tier system, where
people who want to seek recourse for insurance companies’ decisions now
have to go to a Licence Appeal Tribunal to argue their claim and they
would have to go to the court to argue a no-fault suit. So it
disadvantages accident victims in this province.
The Acting Speaker (Mrs. Julia Munro): The member for Chatham–Kent–Essex has two minutes to respond.
Mr. Rick Nicholls:
I’d like to thank the members from Hamilton East–Stoney Creek,
Mississauga East–Cooksville, Sarnia–Lambton and, of course, London West.
Thank you so much for your input with regard to our point of view on
Bill 171.
It was mentioned in some of the
debriefs that it’s a bad scenario when people who are unable to get
insurance continue to drive without that insurance. I have some serious
concerns about what can happen, especially when, as was pointed out by
the member from Hamilton East–Stoney Creek, it’s usually those bad
drivers that hit you.
The comment was made earlier about State Farm: Why did they leave? I’m sure they have their reasons, although—
Interjection.
Mr. Rick Nicholls:
Well, they sold off a portion of their business to Desjardins. I still
love their motto, “You’re in good hands with State Farm.” I guess now
this government has taken over that motto. I’m hearing someone else over
there saying that you’re in good hands.
Interjection: You’re in safe hands.
Mr. Rick Nicholls: Oh, you’re saying “safe hands” now.
I look at the opportunities, and
it’s been mentioned in this House, to shop around. The former Attorney
General and now minister without portfolio had commented that perhaps he
and I could do a commercial for Grey Power or something of that nature.
Of course, the NDP could do a commercial for that other insurance
company that says, “15 minutes will save you 15%.”
But we seriously need to protect victims and ensure that they get the proper financial reimbursement that is coming to them.
The Acting Speaker (Mrs. Julia Munro): Further debate?
Ms. Sarah Campbell:
As has been the focus of the debate this afternoon and throughout the
duration of this bill, high auto insurance rates are a concern right
across this province, whether it’s people down south or people all
across the north, especially in Kenora–Rainy River. The NDP has really
prioritized this issue as a party. In fact, we incorporated it in our
2013 budget asks where we asked for a 15% reduction in auto insurance
rates.
Now, the Liberals wouldn’t come
all the way. They wouldn’t commit to implementing the 15% savings in one
year. They’ve kind of drawn that out. What we’ve actually heard from
people, what I’ve heard from people who have contacted my constituency
offices, is that they’ve actually seen their rates increase. Now we’re
seeing bills like this, where it’s virtually devoid of any cost-reducing
measures for consumers. It does have some measures in place, as has
been mentioned many times, to reduce costs on the part of auto insurance
companies, but all consumers basically get is the flashy title of
Fighting Fraud and Reducing Automobile Insurance Rates Act.
In Kenora–Rainy River, as I
said, affordable auto insurance rates are a top priority. In 2013, I
sent out a budget survey where 90% of my constituents said that lower
insurance premiums are a high or an extremely high priority. In
Kenora–Rainy River, as I mentioned earlier today, public transportation
is virtually non-existent and people really do rely on their vehicles to
get from point A to point B to access things like groceries, work and
health care.
In fact, this past Friday, I
participated in the provincial day of action against high hydro rates.
Transit in the north, which in the north of course means road
maintenance and affordable auto insurance rates, was a key theme. For
people living in a place like Red Lake, where the protest was held,
again, on hydro, it’s very difficult to talk about any of the issues
facing northerners without transit coming up, especially in the case of a
place like Red Lake, which is 175 kilometres north of the TransCanada,
where the only real accessible way in or out of the community is by
road, because often a $600 flight in and out of the community is just
not practical for a lot of people. We don’t have the luxury of public
transit.
With the necessity of having a
vehicle, that means vehicle payments, it means vehicle maintenance and
of course it means gasoline, which is high enough in urban places that
are along the TransCanada, like Dryden. It’s even more expensive when
you go to more remote communities like Red Lake, Sioux Lookout and in
the far north.
It also means auto insurance,
which is mandated by the province. Because having auto insurance is
required by law, I believe, as legislators, we have a duty and an
obligation to make it affordable. There needs to be a balance between
the consumer’s ability to access this mandatory service at a fair and
reasonable cost and the company’s ability to cover its costs. There
needs to be that fairness, there needs to be that balance. Presently,
the scale has tipped away from this needed balance in favour of
insurance companies. Many of us recall the changes that were made by
this government in 2010 which resulted in increased premiums and slashed
accident benefits, where the accident benefits were essentially halved.
I saw this firsthand because at
the end of August 2010, I was involved in a head-on collision just
outside my house. I’ve mentioned this before. I required and my partner
required some significant non-OHIP-insured health care services, and at
that time, there was a lot of emphasis placed by our health care
providers on when exactly this accident occurred. It was very obvious to
us that the type of accident benefits we would be entitled to—in fact,
we were entitled to, because I believe we had the collision on August
26, 2010, versus if we had been involved in this collision on September
1, 2010.
Since that time, my constituency
offices and the constituency offices of my predecessor have been
flooded by people who are upset to see their benefits decreased and
their premiums increased despite having no changes to their driving
record. Then, of course, we later found out that these changes that were
made in 2010 by this present government actually saved the auto
insurance industry $2 billion.
Now, at a time when we in the
NDP have made it abundantly clear that these savings have not
materialized, that they have not been passed down to consumers, the
Liberals have come forward with this bill that again only reflects the
needs of the auto insurance industry.
We should really take a look at
some of the measures that are included in this bill, and two that I want
to focus on in particular. The first is that by denying accident
victims access to the courts and replacing them with a tribunal, it
removes fundamental rights as citizens. It increases appeals costs for
consumers because under the new tribunal system, if an accident victim
is successful in proving that the insurance company should have paid the
claim benefit, the insurance company is forced to pay only a tiny
fraction of the legal cost. This is a significant change from the court
system and it really places the burden on the individuals who are
already injured, even if they have a very strong case.
Interjections.
Ms. Sarah Campbell:
I would have expected a little more from members on the government
side. There are a lot of riff-raff—a lot of discussion is going on on
that side. This is a very serious issue for my constituents, and I would
hope that they would pay attention.
The other thing is that if the
accident victim is injured and it is someone else’s fault, the victim
now has to pay a lawyer to bring forward two entirely different cases in
two entirely different systems: one in the court against the person who
injured them, and this new arbitration against their insurance company,
who denied them the benefits. Now, the accident victim will have huge
extra legal costs and two different legal proceedings. None of these
changes have anything to do with fighting fraud, but they have
everything to do with making it easier for insurance companies to
wrongfully deny benefits, delay settlements and make it harder for
people to collect what they are rightfully owed.
The second point I want to
address is that of pre-judgment interest. This bill would change a
30-year-old rule that has been very important to those who have suffered
injuries in Ontario. Prejudgment interest on pain and suffering damages
is intended to compensate an innocent victim when the negligent
person’s insurance company delays paying those damages. It basically
ensures timely payment for pain and suffering.
Currently, insurance companies
are required to pay 5% interest on whatever a person is owed for pain
and suffering. If a serious injury occurs and a person is owed $50,000
for pain and suffering and the insurance company delays paying for three
years, they have to pay $7,500 in interest. That may not be a lot, but
it’s an incentive for the insurance company to deliver, to make these
payments. By making these changes included in this bill, if these
provisions are passed and the pre-judgment interest rate is reduced to
1.3%, then the insurance companies stand to earn a 2.7% profit on the
money of a person who is rightfully owed this money, for every year that
they put off settling.
These amendments were introduced
under the guise of fighting fraud and reducing automobile insurance
rates and they’re presented as money-saving initiatives for insurers,
but, clearly, the change in the interest rate has nothing to do with
fighting fraud. In reality, this change is nothing more than another
gift to Ontario’s already profitable insurance sector, on top of the
recent substantial cuts that have already netted insurance companies
billions of dollars in profit.
In summary, there’s a lot that
needs to be done to restore the balance between a consumer’s ability to
access this mandatory service at a fair and reasonable cost and the
company’s ability to cover its cost—I want to stress that. It needs to
be fair. No one is suggesting that insurance companies should be taking a
loss, but it needs to be fair on both sides.
Aside from the flashy title of
this bill, the bill completely misses the mark in restoring fairness to
the auto insurance system and it clearly doesn’t make this essential
service affordable. I also question how effective it will be in cracking
down on fraud as there is an obvious disconnect between the measures
contained in this bill and eliminating auto insurance fraud.
I do think that we should maybe
send this to committee. It will be an interesting experiment to see if
it can be transformed into something meaningful. It will be interesting
to see how much leeway the committee actually has to reform this bill,
but, that being said, I look forward to making those changes.
The Acting Speaker (Mrs. Julia Munro): Comments and questions?
Ms. Mitzie Hunter:
I’m pleased to rise to speak regarding Bill 171, Fighting Fraud and
Reducing Automobile Insurance Rates Act, 2014. We agree, as a
government, to reduce auto insurance by 15%, and that is averaged over
two years. We are well on our way toward achieving that goal; almost 5%
has been reduced already since August 2013. Now we’re taking steps to go
even further by fighting fraud as well as reducing the overall costs of
insurance. This is in order for it to directly benefit our Ontario
drivers.
I know that this is very
important to my community of Scarborough–Guildwood. Just this past
weekend, I had an opportunity to speak with a father who was at a
community centre with his two daughters. What he raised with me was the
very high cost of insurance. I had an opportunity to share with him all
that our government is doing to reduce the cost of insurance and to
ensure that that is benefiting our drivers in Ontario. Of course, like
my colleague who spoke before me, I advised that he contact his
insurance company and ensure that he negotiates a better rate, because
indeed rates are coming down, as we can see already with the 5%
reduction that has been achieved since August.
But today, the legislation is
speaking to how we can further transform the system in terms of the
dispute resolution contacts and ensuring that disputes are settled
faster, and also in terms of licensing and really professionalizing
those that are providing health services to the system and ensuring that
payments are received directly, that they get paid directly by the
insurance company, should they be licensed, as well as the time that
vehicles are impounded. That is also a way to reduce the costs.
The Acting Speaker (Mrs. Julia Munro): Thank you. Further comments? The member for Kitchener–Conestoga.
Interjections.
Mr. Michael Harris: Thank you, Madam Speaker. It’s nice to see that the folks across the aisle are riled up about something today.
I did have a good chance to
listen to the member from Kenora–Rainy River. I only have two minutes
now, but I will be speaking to this later on this afternoon. She
mentioned how she was in a car accident. I, too, unfortunately had a
little fender-bender this past winter; the winter just seems to never
end here. I was struck from behind on the QEW coming into Queen’s Park
one day. I figured I’d take this minute and 30 seconds just to share my
personal experience.
It was a bit of an unfortunate
morning. The lady behind me—we were all moving or getting out of the way
to avoid an accident. I know she’s all right. Her vehicle, of course,
needed some repair, as did mine. But I want to thank my local insurance
broker, Josslin Insurance—great guys. Just a quick phone call, seamless;
they get you into the local body shop. Of course, I deal with Wendell
Motors in Kitchener-Waterloo. Kevin Buckwald, he just takes care of me
and it’s seamless. So you know what? I’ve got to thank the insurance
brokers in my community.
Of course, Kitchener–Waterloo is
known for a significant insurance industry that employs thousands and
thousands of people in our region, but more importantly, the commitment
to our community—Manulife are obviously major contributors to our
community, but also those insurance brokers who play a very key, key
role in our community and provide an essential service to folks and are
that conduit between policyholders and their insurance companies when
mishaps like the member from Kenora–Rainy River had, as I did, this past
winter—I’m happy to say that things are well.
But we do have a plan. I’m
looking forward to outlining that plan that has been brought forward by
my colleague from Elgin-Middlesex—Jeff Yurek; I guess I’ll just say it.
I’ll share that with you in a matter of minutes.
The Acting Speaker (Mrs. Julia Munro): The member for London–Fanshawe.
Ms. Teresa J. Armstrong:
Thank you to my colleague from Kenora–Rainy River for her debate notes.
They were very informative, and I especially enjoyed listening to her
examples in her riding.
Up north, as she mentioned
before, people rely on transportation and it’s not an option to take
public transit. They are forced to drive their vehicles, because they
need to get to work, they need to get to doctors’ appointments or visit
family or whatever the case may be. So they’ve got to pay what the
insurance companies say.
Despite the fact that this
bill—I mean, we’re talking about the dispute resolution system and how
it has changed to two-tier. We on this side don’t feel that that is a
just way of dealing with the fraud issue, on an overview of how it’s
presented. But one thing that I do appreciate this bill does talk about
is licensing medical rehabilitation facilities. That’s something that I
think was long overdue, because if you look at the reasons why insurance
companies back in 2010 claimed that their costs were skyrocketing for
running a business, it was because of accident benefits. Then they
chopped those benefits down by half.
It would have been prudent at
that time, if that was the reason, if they would have linked that to
perhaps licensing the medical and rehab industry, because that’s where
things were coming through. People were staging accidents and saying
they had whiplash or a sore back, and then they were getting
prescriptions and medical treatment that they weren’t really necessarily
entitled to and suing on that basis, and that contributed to the fact
that that particular sector of the insurance industry was contributing
to that fraud. So at least that’s in there.
I’m really interested to see,
when this goes to committee, how those things will be picked over, and
we’ll get some really good feedback for the consultations that we’ll be
doing.
The Acting Speaker (Mrs. Julia Munro): The member for Vaughan.
Mr. Steven Del Duca:
It’s a pleasure, as always, for me to have the chance to stand and rise
and speak to this particular bill, Bill 171, if memory serves me
correctly. I am very proud to serve as parliamentary assistant to the
Minister of Finance, and I believe I spoke to this bill at the beginning
of second reading.
This is something that’s very
important for our government as we continue to move very proactively
with respect to our auto insurance rate reduction strategy—a strategy
that, as other members have referenced on this side of the House, has
been providing a great deal of progress for the people of Ontario. As
those watching at home and those in the chamber would know, we promised
in budget 2013 that we would, over the course of two years, be able to
bring auto insurance rates down—on average, across the province—a total
of 15%.
We have been working very
closely with all of the different, very complicating, complicated and
complex aspects of the auto insurance industry. We have taken into
account the findings of the Auto Insurance Anti-Fraud Task Force, and we
have taken some very concrete steps.
The good news, as I said a
second ago, is that the steps that we have taken are actually providing
those results. It was referenced by the member from
Scarborough–Guildwood just a moment ago that we have now seen—over the
course of, relatively speaking, a small number of months—a 5% decrease,
on average across Ontario, in auto insurance rates. That is directly as a
result of the fact that our government has taken the initiative to make
sure that we continue to deliver these kinds of positive results.
I think it is important that,
while opposition parties, particularly members of the third party—and I
was happy to hear the member from Kenora–Rainy River say that she would
like this bill to get passed at second reading and get to committee.
That’s heartening and encouraging to hear. I think that it is important
for people watching at home to recognize that while other political
parties spend an awful lot of time talking about what they believe is
important, there is only one party, one government, in this chamber that
is actually delivering the results as promised, and that’s the Ontario
Liberal government. I look forward to continuing to work on this
initiative.
The Acting Speaker (Mrs. Julia Munro): The member has two minutes to respond.
Ms. Sarah Campbell:
As I mentioned, affordable auto insurance rates are really a huge issue
across this province. More needs to be done to strike a balance and
make it affordable for people.
As I mentioned, people living in
Kenora–Rainy River really don’t have the luxury of public
transportation. There are some very real and significant costs that are
associated with driving our own vehicles, and people—in Kenora–Rainy
River, especially—can’t help but get resentful towards this government
for not helping to ease their financial squeeze.
It’s comments like those that
are made by the member from Mississauga East–Cooksville, where she kind
of glibly counsels her constituents to just shop around, that really get
people going in northwestern Ontario. We can shop around as much as we
want, and we can find the best price, but you know what? That best price
still isn’t enough to make it affordable for people to get from point A
to point B.
This is coming from a member who
has the luxury of public transportation. Let me tell you, it really is a
luxury, because there are people who, especially in the winter months,
are completely stuck in their communities. There are concerns in places
like Red Lake: How are we going to get the groceries to the community if
we don’t have access through our roads?
It’s also a little frustrating
and a little rich for that same member to be making those comments, that
people can just shop around. This is coming from the government that
has prioritized expanding what people in Kenora–Rainy River see as
already excellent public transportation in the GTA. We don’t have public
transportation. To look at possibly going to the province cap in hand,
saying that we’re going to raise your taxes so you can fund transit down
here, when we don’t have that transit up here, is very, very
frustrating.
The Acting Speaker (Mrs. Julia Munro): Further debate?
Ms. Laurie Scott:
I’m happy to rise today to speak on Bill 171, which we’ve been debating
this afternoon, the Fighting Fraud and Reducing Automobile Insurance
Rates Act. We’ve had a lot of discourse back and forth—certainly
urban/rural differences that we just heard. The member from northern
Ontario has expressed some issues that are certainly different than in
urban Ontario. This bill does have some positive aspects—definitely
areas that need to be improved, which is supported by the reservations
of some medical and rehabilitation professionals.
The Progressive Conservatives
certainly understand that the purpose of the bill is to attempt to keep
the Liberals’ promise that they made last year, from their budget, to
keep the NDP happy, that said that they would reduce auto insurance by a
15% premium reduction. I haven’t seen the reduction myself, but, you
know, they say it’s working. Again, I don’t know if many of the drivers
out there would say that it is working, that they’ve seen a 15%
reduction in their insurance premiums, but it certainly left it—a
decision, like that of so many other businesses, the inability to reduce
auto insurance rates.
One of the main insurance
companies, as mentioned before, has decided to leave Canada. So there
are over one million people out of work in Ontario, we’ve lost 300,000
well-paying manufacturing jobs in the past 10 years, and in the auto
insurance, we’ve all heard about the loss of State Farm Insurance in
Canada, which I was alluding to before. That held a significant 11% of
the auto insurance market, and I’m sure you would all recognize their
jingle: “Like a good neighbour, State Farm is there.” I won’t sing it,
to save all the eardrums in the building. All I know for sure is that
all of my neighbours are suffering from high insurance rates—I hear it
all the time—and State Farm is no longer there because they can’t afford
to run their business in Ontario.
This is, unfortunately, just
another notch in the Liberals’ belt, another business, another company
that’s left, and jobs that have been lost in the province of Ontario.
Among many problems, this company leaving our province means that there
is one less company for Ontarians to choose from when buying auto
insurance. It would mean paying higher rates than they currently are.
As the member from Caledon said,
certainly the number one thing we hear about from all of our
constituents is the hydro bills, struggling to pay their hydro bills,
the increase in taxes that we’ve seen, even though the Liberal
government promised a 15% reduction in auto insurance, which has yet to
come to fruition, as I mentioned before.
Premiums in Ontario have
actually climbed 17% since 2007. I mean, even Newfoundland was not even a
close second and experienced increased insurance premiums at a total of
12% only.
Ontarians are suffering from
high auto insurance rates, the threat of gas tax, high taxes,
unemployment and rising debt, so how are the people of Ontario and the
constituents, especially in Haliburton–Kawartha Lakes–Brock, expected to
travel to work and around their communities? All these costs are
building up upon them. It’s certainly a lack of leadership. We’ve
discussed insurance in committees—oh, my God—for years. There have been
solutions out there I’m going to talk about a little later. I know I
only have 10 minutes and the clock is ticking, but there have been
solutions brought forward. The government has not shown leadership in
acting on those solutions.
To make things worse, it is not
Ontarians who are driving safely and abiding by the law who are being
rewarded by this proposed 15% insurance reduction, but they did it so
quickly to appease the third party here that they’re actually proposing a
15% insurance reduction for those who have bad records. I know most
people at home are saying, “What?” But I’m telling the truth. Recently,
the Financial Services Commission of Ontario released the quarterly rate
filings for auto insurance premiums, and one thing is clear: If you
have multiple accidents or a drunk driving conviction on your record,
you’re going to get a premium reduction, they tell you.
The government has stated that
the filings show premiums were down maybe 4% on average; however, the
biggest reductions went to the non-standard insurers, and those are
companies that act as an insurer of last resort for those drivers with
multiple speeding tickets, accidents or drunk driving convictions. Their
customers pay high premiums because they are the riskiest drivers on
the road. So non-standard insurer Perth Insurance Co., under the
direction of the regulator, filed for a premium reduction of 15%, the
highest reduction of any company. The province’s three other
non-standard insurers—Pafco Insurance Co., Pembridge Insurance Co. and
Echelon General Insurance Co.—filed for reductions of 14.5%, 12% and
18.7% respectively. My colleague and seatmate here, Jeff Yurek, the PC
auto insurance critic, already stated last fall that Minister Sousa’s
premium reductions would disproportionately benefit bad drivers. I mean,
really, could you get some policy right that makes sense, rewards the
good drivers and doesn’t reward the bad drivers?
Yet again, I think it’s pretty
clear that the Liberals really don’t have a good plan in action. The
bill is more like casting a rod in the pond and, “We’ll see if we get a
bite.” They got through the budget last year. I don’t know what’s going
to happen with the budget this year, if the third party is going to
support them or not, but we all wait with bated breath to see. Rather
than following through on the promises that they made, they’re just
introducing this bill that we have today, that makes it sound as if
they’re taking action. Again, this half-measure will not achieve what
the people of Ontario were promised, because everybody was saying, “Yes,
I want a 15% reduction of my auto insurance.” But did they really get
it? My survey says, “Absolutely not.” Maybe some of the bad drivers
actually got something, as I stated, but not the drivers that should be
credited with getting a reduction, that have the good records, or as a
result of a better plan and actually working together to find a
comprehensive plan to bring down auto insurance premiums for everyone,
which the PC Party has put forward.
In the 2011 budget, the Liberals
committed to reviewing the dispute resolution system that is available
to insurance claimants, but despite the proposed review, mediation
services will still conveniently remain an issue. In 2011, the Auditor
General noted that mediation was a severe bottleneck that at the time
had 30,000 cases in backlog. It has come down now to about 16,000, but
this backlog still delays settlements and adds costs and uncertainty to
the system. I’m telling you, in committee, the stories would make you
weep. We, as politicians setting policy, have to do something about
that. The insurance system is not providing adequate, timely decisions
for these people, and they are suffering. It takes 414 days to complete
mediation. That’s outrageous. How are people expected to wait around for
this backlog to dissipate when they’ve suffered injuries in an accident
that may cause them to go on disability or take a leave of absence from
work? The backlog issue has not been properly addressed.
Again, my colleague Jeff Yurek
has worked for over a year in consultation. We have a plan recommending
the option for a claimant and insurer to use private mediators to get
the backlog down. This gives them more choice to avoid these long
queues. It’s a publicly administered mediation process, but as I said
before, those numbers are unacceptable, and people should not have to
suffer the way they do while they’re waiting, on the average—I think it
was 414 days that I said.
Not only does our party want to
use private mediators to reduce wait times, but we have also addressed
the issue of why so many cases go to dispute in the first place. We
recommend using existing medical assessment guidelines to have truly
independent third-party assessments that would make injury
classifications more black and white and eliminate the need for
mediation in some cases.
The number one thing of the
rising cost of insurance is fraud. How do we change that? Again, they’ve
had a fraud task force. The reports have been presented to the Liberal
government. There has been no leadership in making the changes. In Bill
171, they try to address some of the issues—to issue licences for health
care providers that provide services to auto accident victims. It’s an
attempt to reduce fraudulent practice in health clinics that overbill
insurers or bill for unperformed services, but as I said, the bill is
really not enough. Fraud is estimated to cost the system between $750
million and $1.5 billion. That’s just enormous. The Liberals, obviously,
don’t—otherwise, they would be taking greater action to address the
issue. They don’t believe it’s costing the system that much. The
anti-fraud task force report that I mentioned before, released in
2012—we’re now in 2014—included 38 recommendations. This bill only
addresses four of those recommendations.
Again, we need stronger
legislation to provide an insurance system that’s affordable and
effective. There are lots of reports out there. We’ve had lots of
committees. We need to make a difference in the auto insurance sector.
My time is just about up. I was pleased to speak for a short time this afternoon on this bill.
The Acting Speaker (Mrs. Julia Munro): Comments and questions?
Hon. Mario Sergio:
I’ve been listening very attentively to the remarks by the member from
Haliburton–Kawartha Lakes–Brock. This is second reading. We’ve been
debating this for quite some time now. What I’ve heard is that this is
not 100% acceptable to the members. The reason why we are debating the
bill here today is to send it on to the committee, where they will be
debating it more. Then they will be hearing other stakeholders as well,
and bringing it back, hopefully, as a much better bill.
The fact is that in the last
year, as a government, we have approved a 15% reduction. This is already
taking place. Next year it will be completed—the full 15%. We know
rates are coming down—rates are coming down. I speak for my constituents
as well, because they are working-class people and I know what it means
to them. The fact is that by debating it and not sending it forward to
bring it back improved, if you will, nothing is going to happen.
We know that we have to go after
the fraud that exists within the system. We know that we have to
license the health care providers, because it’s an issue, as the members
well know. We know that long storage is expensive. Again, this all adds
to the various expenses that the insurance companies have to pay.
The bill is good. It may not be
100% acceptable, but I would say—you know what? Let’s take it from here.
Let’s bring it back. Let’s make it better. And let’s do it as quickly
as possible so we can send a message to the insurance companies and we
can send a message to our people, because this is a good bill. It’s
going to help. Let’s do it.
The Acting Speaker (Mrs. Julia Munro): The next person—
Interjections.
The Acting Speaker (Mrs. Julia Munro): Order.
The member from Renfrew–Nipissing–Pembroke.
Mr. John Yakabuski:
I listened very carefully and attentively to the member from
Haliburton–Kawartha Lakes–Brock as she spoke on this bill here today.
One of the things she hit on—and I think it is the most important
issue—is the fraud in the insurance industry.
This has been something that has
been a problem for not weeks, not months, not years, but decades. Fraud
and insurance: They’ve kind of been hand in glove for an awfully long
time. I’m supportive of any attempt to try to reduce, with the hope of
eventually—I don’t think we’ll ever eliminate fraud in the insurance
business; we won’t eliminate fraud in banking or anything else, either.
But we’ve got to take the necessary steps to try to reduce that kind of
fraud, because when there is a fraudulent claim made, it doesn’t cost
the criminals; it costs the honest people out there who work hard every
day in a workforce here in Ontario. It’s getting harder to find a job,
certainly in manufacturing. But they work hard every day to pay the
bills. When there is fraud going on in the insurance industry, they pay.
One of the things that we’re concerned about in this bill is that in an inequitable way, it actually rewards bad drivers.
Mr. Michael Harris: Drunk drivers.
Mr. John Yakabuski:
As my colleague from Kitchener–Conestoga says, drunk drivers. Well,
they’re bad drivers. If you’re a drunk driver, you’re a bad driver.
If you’re getting rewarded by
this bill for misbehaviour, I have a bit of a problem with that. Well, I
don’t have a bit of a problem; I have a real problem with that.
Let’s see if we can get this
thing ironed out, straightened out, fix the kinks, fix the problems. But
at the end of the day, if we can reduce fraud in the insurance
business, it is going to succeed in reducing the rates of every honest
driver out there, and that will be a benefit to us all.
The Acting Speaker (Mrs. Julia Munro): The member from Hamilton East–Stoney Creek.
Mr. Paul Miller: I’d like to thank the member from Kenora–Rainy River for her comments. They were well taken.
I really laugh when I hear
people stand up and say, “Oh, they’re going to reduce your rates.
They’re going to do this and they’re going to do that.” In 45 years,
I’ve never had a rebate from an insurance company, and I have a clean
record. When is that going to happen? I’ll wait and see.
The bottom line is, you have to
look at what’s really going on here. What’s going on is, if an insurance
company—for example, the member from Mississauga East–Cooksville said
shop around. Well, I’ve got news for her. I just renewed my insurance.
No claims, same cars—everything is the same. I went from one company and
they raised it a considerable amount. I was a little concerned so I did
phone another company. There was an $1,100 difference, and I even got
better coverage. But what the insurance companies do is that they’ll
offer you a good rate, and then you go with them, and then a year later
it starts to go up again. In two years, you’re right back where you
started from.
Speaker, with all due respect,
you can talk about, “This is going to really work, and this is going to
reduce rates.” You know what? I’ll believe it when the cheque’s in the
mail and I get my rebate. Then I’ll believe it, and so will the other
people in Ontario. It’s never happened.
When insurance companies leave
this province, do you know why they are leaving, Speaker? Because
they’re not making enough money. They’re not making 150%; they are only
making 75%. So they are going to go somewhere else where they can make
the 150%. That’s why State Farm left Ontario: because they weren’t
making enough. So where do you draw the line?
You know, the member from the
north is saying, oh, yes, shop around. In a city or a town of 10,000
people where they’ve got nowhere to go and they don’t have public
transit, let’s shop around for better rates. Give me a break, Speaker.
Give me a break.
The Acting Speaker (Mrs. Julia Munro): Thank you.
Minister without portfolio.
Hon. John Gerretsen:
Thank you very much, Speaker. Here we have another bill that everybody
in the House seems to agree on. We had another bill like that this
morning. I think it was the family leave act. This bill has had eight or
nine hours of debate now, and yet we can’t seem to bring it to a vote.
So once again I want to tell the people of Ontario what is really
happening here.
You have the opposition party
over there, and they are here to oppose government. I’ve been over
there; I know how it works. You basically don’t want to agree with
anything that happens on this side, even though you like this bill.
You’ve got the third party that
agrees with this bill, but they don’t believe in the one issue that
would really deal with these bills in a quick and expedient fashion to
get them to second reading and get them to committee and to third
reading. What’s that, Speaker? We need a programming motion, a time
allocation motion. It doesn’t matter what you call it, Speaker, but they
don’t support time allocation.
I’m all in favour of the open
debate that we have in this Legislature. It’s one of the real democratic
rights that we have as Canadians, and I’m very proud of our
parliamentary system. But the reality is, even though we all agree on
this bill, in a minority government, unfortunately, these bills cannot
come to a vote until ultimately some sort of a deal is worked out. The
people out there in television land must be thinking, “How is it
possible that these people agree on these bills and yet it takes”—there
was a bill, the Local Food Act, that I think was given 25 hours of
debate, on a bill that we all agreed on.
Let’s get on with it. Let’s call the vote on this bill. Let’s move it to second reading. Let’s get it done.
Interjections.
Hon. John Gerretsen:
You know I’ve hit a nerve when you hear the yelling and screaming over
there. They know what I’m telling is the truth. Let’s get on with it.
The Acting Speaker (Mrs. Julia Munro): The member has two minutes to respond.
Ms. Laurie Scott:
Thank you, Madam Speaker. I’d like to thank the minister responsible
for seniors, the member from Renfrew–Nipissing–Pembroke, the member from
Hamilton East–Stoney Creek, and of course the latest speaker, the
minister without portfolio. He says he’d like to get on with it. Well,
you know, back to the half measures in the bills that this government
brings forward: The Local Food Act? Talk about a toothless measure. We
had to put some teeth into it when it got to committee finally.
This is only four
recommendations of how many that were recommended by the anti-fraud task
force? So really, we’ve set out a list of recommendations we’d like to
see with auto insurance. We’ve asked them to steal any of our ideas. We
have lots of white papers out there. We say the four pillars to change
for auto insurance are the following.
Reduce excess bureaucracy: This
Liberal government loves bureaucracy, so that is going to be hard for
them to accept, probably, but it is what is needed.
Combat fraud: How many
discussions do we have to have about fraud? It exists. It’s causing our
rates to go up, and you haven’t done anything about it in two and a half
years.
The dispute resolution process: I
named all the stats and the backlog and the mediation days—414. You
should be embarrassed that you’re running a government the way you run
it.
Of course, our all-time
favourite pillar of insurance reform: Increase accountability. That’s a
foreign topic over there on the Liberal side, increasing accountability.
They, again, bring in lots of
bills that have—I don’t know. What are you up to: 37 panels now for more
discussions on accountability? Why don’t you actually do something
responsible for the people of the province of Ontario? We’re talking
about reform in the auto insurance industry. If you can’t get that
right—I agree with my colleague from Simcoe–Grey—just resign. Step down.
Call the election.
Hon. John Gerretsen: Speaker, point of order.
The Acting Speaker (Mrs. Julia Munro): Yes.
Hon. John Gerretsen: Speaker, I’m sure that it’s 6 of the clock somewhere in eastern Ontario right now.
The Acting Speaker (Mrs. Julia Munro): Thank you.
Interjections.
The Acting Speaker (Mrs. Julia Munro): Order.
Further debate?
Mr. Michael Harris:
I’ve been listening to the debate all afternoon and I felt that it was
important to get my 10 minutes on the record here today on behalf of my
constituents who I represent in Kitchener–Conestoga.
As I had mentioned before, the
insurance industry in my region of Waterloo is quite significant. In
fact, a lot of the major insurers call Kitchener–Waterloo home. I could
list them all, but I know I only have 10 minutes and I know the members
across here obviously want to hear what we have to say.
As we head into another
provincial budget, which I believe is coming May 1, there really is one
thing that will be on the mind of NDP leader Andrea Horwath, other than
actually trying to make a decision as to what she’ll do this time to
prop up a scandal-plagued government; it will be, really, the auto
insurance 15% that they so-called “got” in the last budget. This was a
topic of debate last year during that budget deliberation.
The Liberal government has
timely introduced Bill 171, the Fighting Fraud and Reducing Automobile
Insurance Rates Act, to make sure that they will try to fulfill their
2013 budget promise to the NDP, which kept them in office another year.
Bill 171 was introduced on March
4, with urgency to pass before our 2014 budget. This time, there is
more support from the insurance industry and brokers. Lawyers for both
insurers and claimants support the majority of the bill but have some
reservations, as do medical and rehabilitation professionals. But
overall, this bill moves us relatively in the right direction. If
there’s one thing that we can all agree on in this House, it’s that in
fact auto insurance rates are high and that Ontario needs to change.
I will say to you that I just
recently switched insurance companies. I got my auto insurance premiums
down. I’m quite happy with my insurance company, so I don’t quite have
the concerns of other folks, but today I will speak up on behalf of
those who do.
Under the current government,
Ontario has far exceeded other Canadian provinces like Alberta,
Newfoundland, New Brunswick and even Nova Scotia. Premiums have taken a
spike of 17% since 2007, really because of a number of regulatory
decisions made by the government. This puts an added strain on household
budgets and families who already feel the pressures of high taxes,
unemployment and rising debt.
Last year, the NDP proposed a
rigid 15% off auto insurance rates to bring costs down. We have all
heard that this is not really an effective way to reduce auto insurance
rates. In fact, it is unsustainable. That’s why the PCs have put forward
a plan that is both effective and sustainable and will bring down
premiums for everyone.
With the great work by my
colleague the member for Elgin–Middlesex–London, we have established
four key pillars of reform. He has gone through in-depth consultations
with drivers and experts from the legal, insurance—like those
representing the Insurance Bureau of Canada—and medical communities. We
would help eliminate red tape—crucial. We would fight the insurance
fraud.
You know what? I had a great
meeting in my office earlier on when this issue became more timely in
the House, with Ralph from the Insurance Bureau of Canada. He was
telling me how either he or a relative of his was at an intersection and
making a left-hand turn. Obviously, there were a couple of oncoming
vehicles this way and they waved him on to make the turn. It was a green
light. He—or whoever he was telling the story of—went and made a
left-hand turn, and of course the vehicle then proceeded to drive into
him, or the one behind. I mean, this is clearly a scam, and this is
where the fraud starts. It’s an orchestrated—
Hon. John Gerretsen: You can’t say that in here.
Mr. Michael Harris: I’m talking about a story that is real, and you should have heard the first part of it; I’ll let you read Hansard tomorrow.
Anyways, I was talking about
insurance fraud, and this incident: turning left into a parking lot,
vehicles from behind coming in and hitting you—well, you’re turning into
somebody else’s lane. All of a sudden, tow trucks show up. They tow
your car off to some garage, and the gentleman in the vehicle perhaps
has to go get a lot of health work done to him etc. The bills rack up,
insurance companies have to pay for this, and this is where the fraud
starts.
I’ve actually been talking to
people in my community, and I’ve said to them—I heard about an accident.
One of them was explaining, and she actually told the story of how this
happened to her. I caution drivers when they’re on our roads today: If
they’re making a left-hand turn and somebody waves them on, that is a
likely sign that insurance fraud is about to commence.
Mr. John Yakabuski: Not if you’re in Renfrew county—
Mr. Michael Harris: In Renfrew county, they—
Hon. John Gerretsen: Not in Barry’s Bay.
Mr. Michael Harris:
Anyways, it happens elsewhere in Ontario, and we have to look out for
this, because this is what happens: You’re innocently waved on, the
driver turns in and smacks it up, and the bills just come flowing in.
That’s just my quick insurance fraud story, and I’m sure we can come
back to that, but I encourage drivers out there to just forget about the
guy in the car. Tell him to come on and pull in, and everything will be
good—because, at the end of the day, you’ll be at fault.
Back to my plan. I talked about
those four key pillars. I talked about the fact that we wanted to
eliminate red tape. I just touched on fighting insurance fraud. We
talked about making the dispute resolution process more effective and
ensuring that auto insurers are accountable to customers.
I want to outline, in the last
three minutes that I have, those four pillars that my colleague from
Elgin–Middlesex–London outlined. This is the PC auto insurance action
plan:
(1) Encourage competition and
reduce excess bureaucracy. We’ll do this by adopting a file-and-use
rate-setting process to allow companies to lower prices quicker, ensure
greater market competitiveness and encourage a wider range of discount
offerings for Ontario drivers.
(2) We’ll reform the dispute
resolution process so that, in the event of a claims dispute, people
could opt for private mediations in order to reduce wait times and costs
associated with government-appointed mediators—a novel idea. We would
also establish a true independent, peer-reviewed medical assessment
system by standardizing assessment procedures and requiring multiple
assessments to be performed by medical professionals of the same
specialization.
(3) This is an important one. It
may not happen in Renfrew–Nipissing–Pembroke, but it will perhaps
happen in other jurisdictions, and that is to combat fraud. We will
establish a special unit in the crown attorney’s office—
Hon. John Gerretsen: We’re already doing that. We’re doing that.
Mr. Michael Harris:
Now, the former Attorney General is here, actually, so I’m glad he’s
listening to this. Now he’s a minister without a portfolio; I think he’s
still got one under the desk, but anyways.
We’re going to establish a
special unit in the crown attorney’s office to investigate and prosecute
fraud—an action that has proven successful in places like New Jersey
and Britain.
We’re going to use the Health
Claims for Auto Insurance system—an electronic billing system for health
care clinics—to help identify abnormal billing patterns. We would
advocate for the implementation of the recommendations from the
anti-fraud task force report back in November 2012.
(4) We’re going to increase
accountability. We’re going to do this by ensuring a fair,
well-functioning marketplace for auto insurance by making senior insurer
executives personally and financially liable for the conduct of their
company.
I know I’ve got a minute and 20
left. I’ll just highlight those four bold PC auto insurance action plan
items: We’re going to encourage competition and reduce excess
bureaucracy, we’re going to reform the dispute resolution process, we’re
going to combat fraud and we’re going to increase accountability—four
easy things that we will put forward. I’m thankful to my colleague from
Elgin–Middlesex–London for bringing forward those items.
I’m happy, though, that the
Liberals have taken sections of our action plan and used them as a
resource when drafting Bill 171 as part of their cost-reduction
strategy, instead of really mandating a 15% reduction. Taking a
unilateral cut would have created several unintended and negative
consequences that, earlier, my colleague from Nipissing-Pembroke etc.
talked about—them actually giving reductions to bad drivers. We have
heard in this House a question that my colleague has put forward,
highlighting just that, where we’re actually giving drivers who have
been convicted with impaired driving convictions an auto insurance
reduction. That just doesn’t make sense. We have got to get this
right—follow the four steps.
Madam Speaker, thank you for the time today.
Second reading debate deemed adjourned.
The Acting Speaker (Mrs. Julia Munro): Pursuant to standing order 38, the question that this House do now adjourn is deemed to have been made.
Source: http://www.ontla.on.ca/web/house-proceedings/house_detail.do?Date=2014-04-08&Parl=40&Sess=2&locale=en#P905_216221
