IBC’s Palumbo to Ontario MPPs: Are you listening?

Ralph Palumbo has been knocking on MPPs doors at Queen’s Park for days, hoping to convince politicians of every stripe to pass Bill 171. And it hasn’t been easy.

“I’ve been trying to get the MPPs to understand that we need Bill 171 to pass,” Palumbo told Insurance Business, sharing his frustration as Ontario vice-president of the Insurance Bureau of Canada, trying to make those in power face facts as to the realities of auto insurance. “The trial lawyers don’t want to see the Bill passed; the
NDP doesn’t want to see the Bill passed – but there has to be a dose of realism here.”

Palumbo’s one man crusade inside the seat of provincial power comes amid the first-quarter figures released from the Financial Services Commission of Ontario, which show approved rates for private passenger auto insurance have declined on average by 5.01 per cent.

Encouraging numbers, but when averaged out, they still show a large mountain yet to be climbed, Palumbo points out.

“When you break it down, that figure is for 14 insurers’ rate filing that were approved during the first three months of the year,” says Palumbo, “and those are relatively small insurers, accounting for something like 20 per cent of the market, based on premium volume. When averaged out, that accounts for a little over 1 per cent.”

That one per cent, added to the fourth quarter average for 2013 of about 4 per cent, adds up to a total of 5.67 per cent, says Palumbo.

“It is encouraging, but it isn’t going to get us to that 8 per cent target set for this August,” he says. “That is why we need Bill 171 passed, so we can tackle pre-judgment interest on tort claims.” (continued.)

 It is that interest rate – set at 5 per cent – that should be reduced to the Bank of Canada rate of 1.3 per cent, argues Palumbo.

“That would make for a huge savings, and get us to where we need to be,” he says. “But trying to get the MPPs to understand this isn’t easy. But both they and the trial lawyers have to understand there is a cost to be paid.”

Although a provincial election seems all but inevitable for Ontario, negating the immediate passage of Bill 171, the passing of the Bill would be the first step to fixing an auto insurance system that Palumbo describes as “not sustainable.”

“The next step would be to have real bodily injury reform in place by January,” he says, “that is if we are to be realistic about the 15 per cent target. The system currently isn’t sustainable – there is a responsibility for companies to charge what is being paid out. But it’s been a tough message.”

Comments

• TammyK on 23/04/2014 3:31:29 PM
  I have been watching the benefits of legitimate survivors benefits being slashed over and over to help the insurers profit margins. Mr. Palumbo, how do you and the IBC sleep at night? God forbid, you or yours are very seriously injured in a MVA and ASSUME the benefits are available. For the amount of money being spent by the insurers to paint a survivor as a fraudster in a claim, with the IBC lining the pockets of the people willing to accept the your word without actual PROOF, also the insane amounts being spent on advertising to get the public to buy into the fraud, thousands of victims could be making maximum in their recoveries with the funds and resources that the IBC and INSURERS squander! Help others, don't Hurt them even more. 
  
  
• Friendly Reader on 24/04/2014 4:43:25 PM
  This bill will not help the insured at all. It will only encourage them to have to resort to the fraud to be able to get the needed money. The insurance industry is it's own enemy as it forces the insured to go to court to get the money due, which in turn results in higher payments since the judge will rule in favour of the vicitim resulting in them also getting pain and suffering. Not bright. This is coming from someone who lives in Ontario which has some of the highest and most generous coverage limits. 
  
  
• FAIR on 25/04/2014 9:37:46 AM
  There is no way that Mr. Palumbo is anywhere near as frustrated as Ontario’s accident victims are. These are legitimately injured accident victims who aren’t getting assistance but they are getting the run-around. Insurers who properly adjust a claim don’t have to pay these pre-judgement interest costs often – but the insurers whose claims adjusting is incompetent or who have denied legitimate claims based on bogus or unqualified medical examinations and who then have to pay up later, are.
  Got one thing right – this system is not sustainable, consumers are fed up with lousy coverage and abuse at the hands of their insurer. Insurers need to acknowledge that many companies do not have best practices in place to protect their customers and the overuse of assessment mills and poor quality medical opinions has a cost.
  Good news for the citizens of Ontario that some MPPs are not signing on to the abuse of some very vulnerable people when Mr Palumbo knocks. Bill 171 does make things worse for accident victims and we applaud those MPPs who are doing their job to look out for Ontario’s interests.
  MVA victims know that Ontario’s insurers and the IBC definition of ‘savings’ means slashing benefits to make even bigger profits every year. The product is flawed, consumers are not happy when they have to use it and many MVA victims can tell you that making a claim in Ontario can be a harmful experience. Bill 171 will make it harder to access justice and it is an incentive to further delay and deny claims by way of a reduction of interest payments to claimants who have been wrongfully denied.
  The tough message here is for Mr. Palumbo – it is that the responsibility lies with Ontario’s insurers to clean up their act and provide a profitable product that works in the best interests of Ontarians. A business model that relies on delaying payments and abusing your own customers can’t succeed. Tens of thousands of injured Ontario accident victims waiting for hearings tells us this product gets a fail mark.
  
  
• Casual Observer on 28/04/2014 9:51:58 PM
  I suspect the comments I have just read are not indicative of most consumers. Because to believe what is being spewed makes it sound as if insurers are not paying claims. Given the data available it appears that the majority of premiums go back out to pay for injuries or to fix vehicles.
  
  Always take things with a grain of salt! 
  
  
• Castrated by insurance on 29/04/2014 8:53:21 PM
  Insurers are not paying claims and the majority of premiums go back out to pay for doctors, lawyers, wordhirelings to deny legitimate accident victims. Open up the books IBC. Oh, thats right there secret, sssshhhhh not so loud.
  
  
• Greg Smith on 23/04/2014 10:47:52 AM
  I am very tired of reading Mr. Palumbo comments on the need for bill 171.
  As a former abused and harassed accident victim. I like to say say a hope Ralph has an accident and try's to get his benefits.
  I bought the extra million dollar policy and for 8 years I fought with my insurance company to spend my benefits to be treated! They actually spent more money sending me to their insurance company friendly doctor for IE's.
  One if their doctor denied my treatment plan without laying a hand on me. He "tried" something on me that he wasn't fully trained to do, and he caused me to have a sickening headache for 10 days. I returned to his office and demanded he see me, and do a true examination of me. After completing the examination, he said I don't know how I can rewrite the report in my favour, after already submitting his report. I told him I wouldn't leave his office until I had a copy of his report, and when my lawyer called him, things were done!
  The injured "HAVE NO RIGHTS AT PRESENT" and you want bill 171 to go through! It must be stopped now!
  I spoke last June in the Ontario special committee on insurance, and rates were to decrease which has to happen!
  EVERYONE THAT DRIVES NEEDS TO CONTACT THEIR MPP, and keep bugging them to stop this bill.
  Accident victims need more rights. As we have zero now.
  Insurance companies have more money to spend on advertising illustrating that accident victims as snakes, shame on the IBC and Mr. Palumbo.
  When we pay our premiums We should be able to use the benefits! 
  
  
• Devils Trumpet on 23/04/2014 11:04:02 AM
  Perhaps Ralph's problem is that Bill 171 is an atrocious document that has nothing to do with reducing fraud and lowering unreasonably high rates paid by the consumer for less and less coverage. Maybe Mr. Palumbo should acknowledge that his dog-and-pony show has nothing to do with fraud but everything to do with increased profits at the expense of accident victims.
  Ralph's dishonesty is so stunningly transparent,no wonder the public and MPPs are not buying it. 
  
  
• Charles Ball on 24/04/2014 9:31:09 AM
  Paying $700 for a $3,500 AB policy has produced billions of profits not passed on to consumers. They have a threshold and a deductible of $30,000. Now they want to eliminate pre-judgment interest. Why not just eliminate tort claims all together? Oh, I know; that would eliminate the pretext for them getting any money at all. Same on any MPP who votes for the Bill. 
  
  
• Rick on 29/04/2014 2:42:14 PM
  What about bill 59 and then the 2003 changes to coverage? What about the fact that we only have $3,500 coverage less the cost of a insurance medical assessment since the 2010 reforms? Where does it end? High premiums, virtually no coverage and an abusive system that requires a lawyer to even figure out. It's fake coverage with big business just siphoning off their profits - no money left for accident victims. What a scam. With the removal of the punitive value of pre-judgement it's an open season on victims. Just take our money and run when there's no reason to stand behind the policy thanks to our government's mishandling of this file. 
  
  
  Source:  by Donald Horne | 21 Apr 2014 
  http://www.insurancebusiness.ca/news/ibcs-palumbo-to-ontario-mpps-are-you-listening-177434.aspx