Canadian Insurance News

    THE ONTARIO election call has left auto insurance reform legislation there in limbo — a turn of events that pleases critics of one of the bills while supporters are now clinging to the hope it will be revived no matter who runs Queen’s Park after the June 12 vote.

    “Everything that was announced in the budget will be set aside with the writ being dropped,” Insurance Brokers Association of Ontario Chris Floyd told Thompson’s. “Bill 171 will also not move any further.”

    Also affected is the Roadside Assistance Protection Act introduced last month that proposed new rules for the towing industry and storage providers.

    Mr. Floyd noted the IBAO has had a good working relationship with all parties.

    “We have been pleased with the work that was being done and expressed in Bill 171, as well as the work that had been done with the recommendations of the auto anti-fraud task force.”

    He said that if the Progressive Conservatives form the next government, the party has a grasp of the issues.

    “The PCs have a good understanding of the challenges facing the industry and we are confident we would be able to work with them should they be successful.”

    FAIR, the Association of Victims for Accident Insurance Reform, is relieved that the bill is being set aside.

    “This was a bill that our Liberal government was ramming through without adequate consultation or consideration for Ontario’s auto accident victims,” chair Rhona DesRoches said.

    “On April 30th this government allowed only two hours to consult with stakeholders on an issue that affects millions of Ontarians and represents billions of dollars in our economy.”

    The election was called after we went to press last week following a failed Liberal budget which covered considerable insurance industry ground. It touched on the proposed legislation in Bill 171 along with the 15% average rate reduction targeted for August 2015; the revamping of the dispute resolution system; changes to towing, vehicle storage, and collision repair practices; the mandated annual Automobile Insurance Transparency and Accountability Expert Report, and the government’s encouragement of industry to look into telematics as a way to further reduce rates.

    Earlier, at a hastily called hearing on the Ontario government’s insurance reform bill, insurance industry representatives pleaded with members of the standing committee on general government to work with their parties to pass the legislation.

    Arthur Lofsky, government relations consultant to the Insurance Brokers Association of Ontario, said the association strongly supports all aspects of Bill 171, the Fighting Fraud and Reducing Automobile Insurance Rates Act.

    “Consumers need this bill passed if there is going to be any chance of getting rates down responsibly,” he said.

    “Not passing this bill will make it nearly impossible. Attempts to delay or weaken this bill unnecessarily are not in the best interests of consumers and the IBAO will be vocal if games are played with this legislation.”

    Mr. Lofsky concentrated most of his comments on prejudgment interest, which Bill 171 reduces.

    This is the interest paid to claimants on ‘pain and suffering’ damages, calculated from the date a plaintiff commences an action to the date a judgment is rendered.

    “The current PJI was fixed in legislation at 5% in June 1990 when the prime rate was 13%,” he said.

    “All other forms of PJI in Ontario are set based on prevailing interest rates. Bill 171 aligns the prejudgment interest rate with the interest rate for special damages — economic losses — at 1.3%.

    “This measure alone will save millions of dollars and speed up dispute resolution without affecting a deserving victim’s benefits in any way.”

    The Insurance Bureau of Canada said at the hearing that attempts at reforming the auto insurance product inevitably lead to arguments that insurers will be enriched at the expense of consumers, which is something that Bill 171 doesn’t do.

    “Bill 171 is an attempt to appropriately reduce unnecessary cost where it is right to do so — with the ultimate objective of reducing premiums,” Barb Taylor, IBC Ontario region policy director, told the committee.
    The IBC urged the legislators to act quickly before an election call could leave the bill to languish until another session.

    “It needs it to be passed,” Ms. Taylor said. “It needs legislators to stop playing political games with auto insurance — and with this bill — and get down to the business of implementing measures that will allow regulations that will revitalize important aspects of the auto insurance system.”

    Meanwhile, defence and plaintiffs’ lawyers expressed concern about Bill 171’s proposed restriction on access to the courts.

    A representative from the Advocates’ Society told the Queen’s Park committee that both the Canadian Defence Lawyers Organization and the Ontario Trial Lawyers Association were concerned about Section 14 of the now-shelved bill, which would change the Insurance Act to stipulate that disputes over damage settlements will be arbitrated by bureaucrats with no recourse to the courts.

    “In the province of Ontario, there has never been a deprivation of the right to go to court to pursue one’s remedy against an insurer,” said Eric Grossman, an Advocates’ Society member and partner in Zarek Taylor Grossman Hanrahan.

    Since enhanced no-fault benefits were introduced in 1990, 24 years ago, injured persons had the right to choose whether to go to court, or to an administrative tribunal to pursue their denied claims.

    Before then, going to court was their only remedy.

    “Even if every other provision in Bill 171 is supportable and proves to be beneficial to consumers in this province by way of lowered insurance rates, there is not one person who can stand before you and say that the removal of the right to choose to go to court will reduce premiums.

    “I am here to tell you that it will not.”

    He told the committee that this change to the law would cause two proceedings to happen instead of one.

    “One at the tribunal and the other in court, whereas now, most cases of this nature are not split, and you would have both cases dealt with at once in court. Two cases rather than one is twice as expensive.”

Source: http://www.thompsonsnews.com/story.asp?story=1799