Court challenge to Ontario auto dispute resolution system ‘scheduled to proceed’

A constitutional challenge to Ontario’s auto accident benefits dispute resolution system is scheduled for a three-day hearing next February, but the retired judge who recommended that AB disputes go before a public sector administrative tribunal suggested Wednesday that it would have “seriously undermined” the proposals to reform the system if AB disputes could be brought to court.

Source/more:
http://www.canadianunderwriter.ca/insurance/court-challenge-ontario-auto-dispute-resolution-system-scheduled-proceed-hearing-feb-13-1004103046/

Committee Transcripts: Standing Committee on General Government - 2014-Nov-05 - Bill 15, Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014

05-NOV-2014_G004.htm  

 

STANDING COMMITTEE ON GENERAL GOVERNMENT

Wednesday 5 November 2014 Mercredi 5 novembre 2014

Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 Loi de 2014 de lutte contre la fraude et de réduction des taux d’assurance-automobile
Ontario Trial Lawyers Association
Insurance Bureau of Canada
Aviva Canada
The Advocates’ Society
FAIR, Association of Victims for Accident Insurance Reform
CAA South Central Ontario
North American Auto Accident Pictures, Towing Division
Associated Towers Guild of Ontario
Fair Value Committee
Ontario Rehab Alliance
Associated Canadian Car Rental Operators
Ontario Safety League
Towing and Recovery Professionals of Ontario
Canadian Finance and Leasing Association
Code Yellow Towing

Bill 15: New Auto Insurance Legislation Inhibits Access to Justice, Requires Amendment

With Bill 15, introduced in July 2014, the government has brought forward amendments that were initially introduced earlier this year. OTLA welcomes the new legislation which would bring forward Justice Douglas Cunningham’s much-needed reforms to the auto insurance dispute resolution system.

While we welcome the majority of the recommendations, there are two outstanding issues that we ask MPPs to address through amendments at committee:

1. ensuring accident victims have access to the Courts and,
2. setting a fair prejudgment interest rate to ensure timely access to justice.

The Right to Sue

Currently, accident victims have the right to go to Court or to arbitration to dispute decisions made by their own insurance companies that deny them necessary benefits, including income replacement benefits and medical and rehabilitation treatments. But under the proposed Legislation, claimants will only be able to advance claims to the Licence Appeal Tribunal. The removal of access to the court is going to lead to huge amounts of wasted dollars and duplicated efforts.
If a person is injured and it was someone else’s fault, and that person also has a dispute with his or her insurance company about benefits, the injured person will now have to pay a lawyer to handle two different legal claims, in two entirely different systems: a lawsuit in Court against the person who caused the injury, and a totally separate dispute through the Licence Appeal Tribunal for benefits that were wrongfully refused. This dual system is going to add tremendous unnecessary costs to the system. Doesn’t it make sense to allow accident victims the right (that they currently have) to bring the two claims together before the court and to vastly reduce the costs they have to incur? The province will also benefit by allowing victims to use one process instead of paying for the cost of two hearings and two decision makers.
Our complex system of benefits already makes it extremely difficult for people to access the benefits to which they are reasonably entitled. This proposed change that takes away the right to sue and will result in more victims just giving up because they can’t afford the fight. Maybe that’s why the insurance sector wants to push this change through.

Prejudgment Interest for Innocent Victims

Bill 15 also proposes to change a 30-year-old rule that has been so 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. Basically, it ensures timely payment for damages by insurance companies to innocent victims. No one can argue with the fact that timely resolutions are in the best interest of both sides of any dispute, and the Court system.
Currently, insurance companies are required to pay 5% interest on whatever sum injured people are owed for pain and suffering. For example, if an injured person has a serious injury and his or her injury is ultimately assessed at $50,000, but the insurance company delays paying the claim for 3 years, the insurer would have to pay $7,500 in interest. That’s not a lot, but at least it is something to compensate for the delay, and it serves as an important incentive for insurers not to purposely delay settlement of claims!

The Ontario Trial Lawyers Association is urging MPPs to consider changes to this section of the legislation because, as it stands now, the bill would give insurers an economic incentive to delay providing compensation to innocent victims.

Insurers invest their money and, according to the federal regulator, they made about 4% on these investments in 2012, and 3% in 2013. Under the proposed legislation, prejudgment interest would be slashed to 1.3%. The insurance companies would therefore stand to earn 1.7% profit on the innocent victim’s money for every year that they put off settling with that victim. It’s really just simple math! Don’t forget – that money belongs to the injured person. If the prejudgment interest rate is reduced to 1.3%, insurance companies will directly profit from NOT paying injured people the money they are entitled to for years. With the proposed reduction in prejudgment interest, there is no incentive whatsoever for insurance companies to settle cases on a timely basis. If the government wants to look more closely at this issue, it should simply determine how much money insurers have been making on their investments, and set the prejudgment interest rate at a level that doesn’t create any incentive to delay. In comparison, injured people who can’t work and have to borrow money to get by are certainly paying interest at a rate much higher than 5%!

The insurance companies would stand to earn 1.7% profit on the innocent victim’s money for every year that they put off settling with that victim.

It Denies Justice To Innocent Accident Victims!

In addition to continuing to line the pockets of profitable insurance companies, the reduction of the prejudgment interest rate will delay the cases in the system. If you have heard how backlogged some of our Courts are now, imagine what will happen if insurers can delay payments for years with no financial penalty! It means that fewer cases will settle at an early stage, more cases will have to be set for trial, more judges will be needed to conduct extra pre-trial conferences, and this will lead to even longer backlogs in the courts. All of this, of course, will come at a significant cost to our justice system.
We urge MPPs to consider minor amendments to address these outstanding issues in Bill 15. We look forward to bringing these concerns forward again when the bill is referred to committee.

Contributed by Laura Hillyer, an OTLA Director and lawyer practising with Martin & Hillyer Associates in Burlington, Ont. Re-posted with permission at www.mhalaw.ca.

Source: http://otlablog.com/bill-15-new-auto-insurance-legislation-inhibits-access-to-justice-requires-amendment/
 

FAIR Submission on Bill 15

FAIR Submission on Bill 15, an Act to Amend Various Statutes in the Interest of Ontario’s Wealthy Insurers and Ignoring Accident Victims

Submitted by: FAIR

Fair Association of Victims for Accident Insurance Reform
579A Lakeshore Rd. E, P.O. Box 39522
Mississauga, ON, L5G 4S6
http://www.fairassociation.ca/
fairautoinsurance@gmail.com
November 2014

FAIR – supporting auto accident victims through advocacy and education

Page 1

FAIR Association of Victims for Accident Insurance Reform is a not-for-
profit consumer organization whose membership is comprised of motor
vehicle accident victims and their supporters.

Its customary to say thank you for allowing us the time to input but that
would grant legitimacy to hearings that have given Ontario‟s 9 million
drivers a mere 15 minutes of consultation. Why aren‟t you listening to the
people who actually use the insurance product under discussion?

MVA victims invariably have the same question – “Why is my insurance
company doing this to me?” Only half of the claims in Ontario are being
properly handled every year – the other half end up in our courts.
What they really should be asking is “Why is the MPP that I voted for and
who is supposed to represent the best interests of their constituents and
Ontario, striving so hard to hurt MVA victims?”

Bill 15, as it is written here, is virtually without any details about the
changes to auto insurance coverage and stands as a fine example of how
the auto insurance file is handled by the government of the day. Ramming
changes through without clarity or any real consideration of how badly it will
harm the already injured and damaged MVA victims has become a habit.

Insurers in Ontario are like junkies addicted to high profits by providing poor
service to their clients who are in need. And like the proverbial addict they
are always looking for another easy „fix‟ to make themselves richer. This
has translated into a bloated and incompetent industry that appears to be
ready to do just about anything to enhance already obscene profits. Profits
made on the backs of some of the most injured and impaired people in the
Province. And the shocker is that our government is on board with it.

So, like dealers ready to make a sale without consideration for the
outcome, many of Ontario‟s legislators enable the junkie to get their „fix‟
regularly with pro-insurer legislation and without regard to victims.
In an effort to afford some legitimacy to the act of bullying and beating up
on injured people this is done under the guise of „fighting fraud‟.

FAIR – supporting auto accident victims through advocacy and education

Page 2

The MPP who called these changes “disgusting” was being far too kind.
Victims, who are already exposed to all manner of underhanded claims
handling tactics by their own insurance company, call what is being done to
them on a daily basis fraud, intimidation, harassment and criminal and the
lack of action on the part of our government to protect the MVA victim,
unethical.

What does it take for our legislators to care more about the people that put
them in their chair than the insurers who court their favour?
How are accident victims going to be impacted by Bill 15 and how much
time was allotted to their interests?

What do our legislators have against MVA victims anyway?

What‟s wrong with a system built on honest, accurate medical evaluations,
insurers that stand behind their contracts, and court cases heard by
experienced arbitrators in an open and honest way?

How many hours were afforded the insurance industry lobby group, the
IBC? How many constituents does the IBC represent?

How is the IBC and their member insurance companies going to be
impacted and how many more billions will end up in insurance company
pockets while accident victims are starving, are without treatment and
without adequate resources?

You don‟t know and I can‟t say because Bill 15 doesn‟t have any
inconvenient details on that. According to discussions at Queen‟s Park you
don‟t even know whether a new dispute resolution system will even save
any money and yet it is full steam ahead. We can‟t tell if the fully
experienced arbitrators we already have are going to be replaced with less
experienced adjudicators either because that hasn‟t been determined yet.

But you do know that fewer victims will have access to justice and that
seems to be a minor pesky detail that isn‟t worth consideration.

The proposed reduced 1.3% prejudgement interest rate has absolutely
nothing to do with combating fraud but will surely be an incentive for
unscrupulous insurers to defraud their customers out of timely benefits.
After all, in yet another questionable move, legislators have already

FAIR – supporting auto accident victims through advocacy and education

Page 3

guaranteed a substantial ROE interest rate that insurers can enjoy. Some
insurers are already beating their customers down and defrauding the
victims out of what they paid for by delaying and denying claims.

Think the court backlog, caused by Ontario‟s insurers and the legislators
that assist them, will get better? Maybe even disappear like the insurance
coverage you keep legislating away?

Sure, you can quietly download the costs of unpaid injured claimants to the
taxpayer but even now questions are being asked about why so many
more people are at the food banks in recent years. Injured people don‟t just
disappear or magically recover without treatment. You can ignore that
some of the 10,000 people waiting in the queue for CPP disability are
Ontario‟s unpaid accident victims or that the province is picking up the tab
through welfare and ODSP but it‟s going to get a little harder as the number
of desperate people rise and the insurance profit margin rises at a
comparable rate.

Maybe you think it is OK that many victims wait 10 years or more to get
what they paid for. Maybe you think it is right to strip coverage and
treatment to increase insurer profits. You seem prepared to make it harder
for victims to hold insurers accountable - voting for the changes in Bill 15
that will reward those insurers that regularly fail to pay legitimate claims.

Even as victims have mortgaged or even lost their homes and are unable
to pay for their own treatments or they‟ve gone into serious debt to fund
treatment or to just put food on the table.

We think reducing the prejudgement interest insurers pay will encourage
insurers to turn down even more claims. If there are no punitive measures
to discourage delaying claims insurers will take that money owed to
claimants and invest it while claimants go without supports or treatment
and have to pay interest on money they borrow. Debt incurred in order to
survive and to hire expensive lawyers to get what they paid for and are
entitled to. Many will not be able to afford to even go to court.

Reduced interest payable on SABs won‟t benefit insurers who are properly
handling their claims and paying what they owe but it will incentivize those
insurers who do deliberately delay claims and it will reward those with more
shady business practices.

FAIR – supporting auto accident victims through advocacy and education

Page 4

Right now all legitimate victims have is the occasional 'special award' equal
to 50% of the amount wrongfully denied by an insurer at FSCO hearings
and the prejudgment interest awarded at FSCO (1% per month or 12% per
year) and at civil court (5% per year). It is already not enough to deter
excessive claims denials or poor claims handling practices.

Borrowing money to cover the costs that absent insurers should be paying
and then not being able to recover the cost of that expense is unfair.
Victims are often paying in excess of 20% interest and even up to 50% on
funds they need for treatment. Why are our legislators on board to help the
insurers and the IBC to put an extra financial beating on victims by
rewarding insurers with a lowered interest rate payable on amounts that
they should have paid in the first place? Insurers will invest our treatment
and other SAB dollars and only have to pay 1.3% interest on the money the
victims has to borrow to get through a claim – they are already doing it.

The message we hear is it‟s all about insurer profits and the health and
welfare of Ontario‟s citizens will have to come second after private
company profits.

Insurance is a business and notably one without a heart so we can‟t really
fault them for looking for extra profit when each has its own bloated
business hierarchy that must be financially supported. Have they managed
to cut any costs to accommodate the 15% reduction in premiums that
you‟ve mandated? Have you even asked the insurers what they‟ve done on
their end or is the plan to just strip benefits and punish victims until they
stop making claims?

You might want to hurry the process up with 80% of claims capped at
$3500 for med-rehab (less the cost of the often biased medical
examinations so really $2000) because you are fast running out of
giveaways to the industry.

What will you tell your constituents when they come to your office looking
for help with their insurance claim? Sorry, the insurers needed to make a
few billion more and I forgot that this affects real people so I voted for it?
Will you have a handout brochure for victims to direct them to the nearest
food bank and the closest welfare office?

FAIR – supporting auto accident victims through advocacy and education

Page 5

Will you be the one to tell them that their access to court sounds like a
better system under Bill 15 than the DRS we have now but they might not
be able to gain access because you didn‟t ask for details in the rush to
agree with Ontario‟s insurers? Or that the person who hears their case may
not have any experience with personal injury. Maybe explain how you
voted for something without adequate information on only one
recommendation and a 15 minute talk with a few victims? Or how their
rights are being violated when legislation treats MVA victims like third class
citizens by removing their right to sue an insurer - leaving them without the
same access to justice as other Ontarians enjoy?

Will you tell them that each time you voted to change the Insurance Act,
with band-aid legislation that favoured insurers and that you made the
problems worse and more victims were denied and/or punished? Will you
tell them it‟s because insurers love this sort of thing because it gives them
an excuse to make new „case law‟ for the new regulations and that they,
the victim, and not their insurance company, will be the ones paying for that
too through drawn out hearings and expensive lawyers?

Will you tell them that they should be satisfied with the 1.3% interest they
get on benefits that were wrongfully denied to them and never mind that
they are bankrupt now. Maybe you can garner some sympathy and support
by telling victims that insurers more often than not are spending far more to
deny a claim than the cost of the treatments and rehab that are requested
and they needed a „break‟ and we should feel sorry for them.

Maybe you can come up with a better explanation for the backlog in the
court systems. Something other than the reality that biased and bogus
medical information that their insurance company bought and paid for in
order to deflate and then derail their legitimate claims is at the core of the
problem that no one wants to fix, including MPPs.

Maybe there‟s a reason why medical practitioners who do a bad job
evaluating accident victims‟ injuries or who write biased or poor quality
reports are allowed to continue to abuse and bully victims. Why are you
allowing assessors to repeat their offences over and over and not
demanding that the Colleges in Ontario do the job they‟ve promised to do
and stop harming the public and vulnerable accident victims? Why aren‟t
you fixing that problem – the one thing that will make the system
substantially more functional and honest?

FAIR – supporting auto accident victims through advocacy and education

Page 6

Ontario‟s auto insurance is an increasingly unstable and unpredictable
product that has become unmanageable or dysfunctional over the last two
decades. With every change to coverage, every threshold put in place,
there is more uncertainty and more cases in dispute. Accident victims have
taken no role in initiating or implementing these changes that cause
confusion and delays, insurers have.

Victims didn‟t break the system and they certainly have not been listened
to. You, our legislators, have done the damage each and every time the
IBC and the industry has asked you to do so.

We are asking you not to pass Bill 15 as it now stands. We ask that you
take the time to clarify what it is you are really voting for. Walk a mile in
MVA victim shoes, after all, you are only one bad driving decision away
from being one yourself.

Ontario ought to be looking at alternatives that would serve the public
better; it is after all a system with a purpose, to serve Ontario‟s accident
victims and not just about doing favours for insurance companies.

FAIR Association of Victims for Accident Insurance Reform

FAIR – supporting auto accident victims through advocacy and education

Page 7

Source: http://www.fairassociation.ca/

Attorney General collecting statistics on unrepresented civil letigants in Ontario

According to The Ministry of the Attorney General:

"Recent media articles and speeches by senior members of the judiciary have reported a growing incidence of unrepresented litigants in Ontario's civil justice system."

The Attorney General is undertaking efforts to collect statistics on the number of unrepresented civil litigants in Ontario courts.

It will be an "independent needs assessment study, guided by a steering committee of civil legal service providers and chaired by PBLO".

I don't know how much this study would cost.

I do know why there is a growing incidence of unrepresented litigants in our justice system. One reason is because our insurance systems have adopted a delay deny tactic using pay-for-hire doctors.

Until our insurance systems are fixed there will continue to be more and more litigants backlogged in our justice system.

Administrator,
Canadian Insurance News

For immediate release

News Release

Auto Accident Victims at Risk When Attending Clinics and Assessments
FAIR Calls for Better Oversight of Ontario’s For-hire Physicians and Medical Assessors

TORONTO – September 25, 2014 – FAIR, the Association of Victims For Accident Insurance Reform, urges the Ontario government to fix the province’s broken auto insurance system and provide better oversight to protect vulnerable auto accident victims.

FAIR Association of Victims for Accident Insurance Reform is a grassroots not-for-profit organization of MVA (Motor Vehicle Accident) victims who have been injured in motor vehicle collisions and who have struggled with the current auto insurance system in Ontario.

FAIR is concerned that the victims and survivors of car accidents are exposed to significant risk when attending medical assessments and treatment clinics when regulatory oversight and enforcement is virtually non-existent.

According to the Health Claims for Auto Insurance Processing report released last month Ontario’s auto insurers spent over $242 million dollars for 89,826 visits by MVA victims at private clinics, assessment facilities and medical offices for medical opinions or treatment in 2013.

Theresa Boyle’s Toronto Star story this past weekend exposed the dangers facing Ontarians who are treated in a for-hire medical system. The risks exist because of the lack of transparency at the College of Physicians and Surgeons in respect to the oversight of these privately run facilities. The disregard for the health and safety of Ontarians was highlighted again on Tuesday when another Toronto Star article  exposed another College failure to advise other patients or even those whom they knew had been harmed.

It is a major concern for vulnerable and injured accident victims who are legislated to attend assessments at private facilities. Court documents reveal that accident victims as well as WSIB claimants have been treated at Rothbart Pain Clinic in the past and possibly even during this crisis at the clinic where there were infection control deficiencies.  

It is worth noting that only after the Star coverage that highlighted the lack of regulatory oversight and transparency that a Notice of Hearing appeared on the College’s website.

The Insurance Bureau of Canada acknowledges that IMEs are used “to control overall costs for the millions of consumers who buy auto insurance in Ontario. Everyone knows there is a fraud problem. Insurance companies use IMEs to combat fraud.”

It is one thing to suffer harm in the course of an auto accident and another to suffer harm at the hands of those who are supposed to be assisting you as a tactic to fight ‘fraud’. Many of our members have made complaints to the CPSO about their experiences at medical assessments with the intent of protecting others from abuses. The reality is that CPSO has consistently relied on remedial cautions that are private and confidential in order to hide the past history of physician complaints. In protecting their members, whose flawed medical reports and testimony are routinely used to disqualify legitimate claimants, the CPSO has abdicated their responsibility to the public.

While considering changes to auto insurance with the intent to fine claimants $500 for failing to appear at insurer ordered assessments, our legislators ought to consider just what the risks are. Current fraud "fixes" favor protecting the financial health of Ontario's private auto insurers and their medical assessors at the expense of the physical health of injured claimants.

FAIR Association of Victims for Accident Insurance Reform has contacted the CPSO on many occasions in regards to the lack of transparency but our repeated requests for greater transparency to protect the public’s interests and safety have fallen on deaf ears.

Ontario’s Ministry of Health, through the Health Professions Appeal and Review Board (HPARB), is compounding that failure to inform the public by providing only the initials of the physicians whose cases come before them by way of the HPARB appeal process.

FAIR wants MPPs from all political parties to look more closely at auto insurance in Ontario when Bill 15 is considered.

Bill 15 includes the recommendation from the final Anti-Fraud Task Force Report that FSCO continue to rely on the CPSO and Ontario’s regulatory colleges to oversee Ontario’s third-party for-hire medical opinion providers. These practitioners provide the medical opinions on which claimants and insurers rely on to decide access to benefits. The entire system, from the claims process to court hearings, is dependent on these medical reports and opinions to be fair, objective and non-partisan to function.

The Anti-Fraud Task Force acknowledged that “Health regulatory colleges should work together to develop professional standards, guidelines and best practices to improve the quality of independent medical assessments of auto insurance claimants conducted by their members”. FAIR has not yet seen any action on protecting accident victims since this recommendation in 2012.

FAIR believes that the poor quality of the medical opinions in the system and poor performance of adjusters is one of the root causes of our present court backlog. Justice Cunningham in the Dispute Resolution DRS Final Report recognized the problem with the quality of IMEs as “obvious” and acknowledged that “IE assessors working in the auto insurance system have no standard assessment protocols, report formats or timelines, and I imagine it must be a challenge to insulate themselves from outside influence”

The problem exists because we continue to rely on the CPSO and other regulatory colleges whose lack of transparency and regulation enforcement has allowed the ‘independent’ for-hire assessors to ignore the College regulations while pursuing profits from insurers.

The wrongful denial of policy benefits to injured claimants based on shoddy insurer assessments has overloaded our public support systems such as ODSP and CPP Disability. These questionable ‘independent’ opinions often deny or delay victims getting the help they need and drive up costs to both the injured victim and the taxpayer who must shoulder the financial burden when insurers fail to do so.

We hope that our government and legislators will put public health and safety first and foremost, demand transparency and accountability, and take action to ensure that we have adequate oversight and regulations that protect the public.

FAIR Association of Victims for Accident Insurance Reform

‘FAIR – supporting auto accident victims through advocacy and education’

For more information, contact:

Rhona DesRoches

Email: fairautoinsurance@gmail.com

Website: www.fairassociation.ca

Bill 15 in Ontario – The good and the bad re: personal injury law

Posted by: Steven Posted date: September 03, 2014 

 

On July 15, 2014, Bill 15 was carried through first reading in Ontario’s legislative assembly.  It is not law yet, but the bill appears to have the strong support of the government and so it seems likely that it will eventually be passed.  The bill itself, and its legislative status, can be found at:

http://www.ontla.on.ca/web/bills/bills_detail.do?locale=en&BillID=3007&detailPage=bills_detail_status

The bill itself contains a number of very prudent measures – ie: legislative steps to curb the issues surrounding tow truck drivers and the abuse and exorbitant fees that are spoken about in insurance circles.  Also, the bill will seek to curb the issues surrounding vehicle repair and storage costs.  These are, in my respectful submission, long over-due measures and may not even go far enough in addressing the issues.  The legislature may eventually consider issuing very strict licenses to “approved” tow truck drivers and perhaps even storage and repair facilities in a more concerted effort to monitor these places.

Another part of Bill 15 is a revamping of the dispute resolution system for accident benefits no fault car insurance benefits for car accident victims.  The odd thing about this is that we appear to be moving towards basically scrapping our current administrative body (which is very knowledgeable in the area and has extensive experience and success in these matters) and are instead passing the disputes over to a new body with no experience or training in the area.  The most troubling issue is that claimants could lose their right to sue insurance companies for benefits denials, depending on how the bill is ultimately worded or amended.  This would remove a significant avenue of recourse for injured accident victims and shield insurers from the deterrent effect that a lawsuit can bring.

A further part of the changes is the change to the pre-judgement interest rate that applies to pain and suffering claims in personal injury lawsuits.  This is the interest rate that an accident victim in a personal injury lawsuit is paid from the time that they were injured/their personal injury lawyer served notice of the claim, up to the time of settlement or resolution at trial.  The current pre-judgement interest rate is 5% per year.  While the majority of the plaintiff injury lawyers are up in arms about this, I have to admit that the current interest rate makes little sense.  It is certainly not in line with market rates and probably should be changed.

There are good and bad parts to this bill.  Hopefully the legislature seriously considers whether to take away an injured accident victim’s right to sue at least.  There is no credible justification for this change and the change is, in my respectful opinion, completely wrong and represents a severe danger to the people of our community.  It would be a victory for multi-national behemoth insurers, at the expense of the most vulnerable injured members of our Province.
The publicity of cases where the learned Judges of our Courts have slapped insurers with punitive and bad faith awards for wrongful conduct are one of the only means of defence that we have to keep insurers in check.  We should not give that away.  We should protect it at all costs.

I have had more than a few cases where insurers have denied benefits (including a recent car accident injury lawsuit in Oshawa/Whitby) for what I considered to be completely outrageous reasons, and we started a lawsuit claiming for punitives, which then met with a reversal of the position by the insurer.

 Relegating these disputes to some back-room licensing tribunal that just deals with one benefit is far different than thespot-light that a lawsuit with a punitive damages award shines on an insurer.  We should not leave ourselves defenseless.

Source: http://www.personalinjurylawlawyer.ca/bill-15-ontario-good-bad-re-personal-injury-law/

Next steps in auto insurance: What action will our MPPs take to increase access to justice for accident victims?

Tomorrow is Election Day in Ontario and many of us will be off to the polls to cast our votes.

On June 3, 2014, we saw the election debate between the three major party leaders. While a number of issues were addressed, including scandal, the deficit, and job creation, auto insurance reform was not one of them. It is unfortunate that the topic did not attract more attention from the candidates as the issue will affect most Ontarians.

While the candidates proposed changes to auto insurance in their policy platforms at the outset of their campaigns, it has not been a prevalent topic of discussion as we near the polls.

The Liberals promised a drop in average insurance rates by 15%, which has yet to be achieved. Earlier this year, they introduced Bill 171 that proposed amendments to the Dispute Resolution System (“DRS”), a crackdown on fraud, further regulation for the towing industry, and a reduced rate for pre-judgment interest. Due to the call for an election, Bill 171 was not passed.

As part of the NDP platform, Andrea Horwath, stated she would achieve a 15% insurance premium reduction within the first year of government and would “drive some changes in the auto insurance industry.” However, she failed to elaborate on exactly what the changes might include or explain how they would be achieved.

According to the Financial Services Commission of Ontario, a 6% premium reduction has already been realized.

The Conservatives criticized Bill 171 when it was initially introduced and responded with their own plan for DRS reform. They propose to increase accountability from insurers and reduce fraud by further utilizing the Health Claims for Auto Insurance (HCAI) electronic billing system. Similar to their opposition, they also call for reduced premiums but have not stated how much of a discounted rate the public could expect or when it would take effect.

While the platforms have outlined each of the parties’ goals, the candidates have done little to explain how they will be obtained.

As an Ontarian and insurance consumer, I am interested to know what the candidates will do to ensure that premiums do not continue to increase, especially when accident benefits continue to be slashed.

As a personal injury lawyer and OTLA member, it is important to me that the elected government does not ignore this issue and continue to allow my clients to face systematic unfairness.

Will the candidates make efforts to eliminate the threshold or reduce the deductible? What action will they take to increase access to justice for accident victims? It appears these questions will remain unanswered as we head to the polls. However, the election is only the beginning, and I will continue to write to my MPPs and assist OTLA in raising public awareness to ensure these issues are given the consideration they deserve.

Contributed by Michael Giordano, an OTLA member and a lawyer practising with Sal Guzzo LL.B. Professional Corporation.

Source: http://otlablog.com/next-steps-in-auto-insurance/
 

Why Ontario drivers pay the highest insurance premiums in Canada

The Fraser Institute’s landmark 2011 study on public-versus-private delivery of auto insurance in Canada concluded that Ontario’s private-sector insurance regimen enjoyed the questionable distinction of being the most expensive in the country – a conclusion even more damning because the report’s major takeaway was the overall superiority of the private system in other parts of Canada.

The Ontario government’s 2010 reforms to private insurance were supposed to address the system’s problems – high premiums, fraud, over-regulation, a punitive cost structure – but have they? As it stands “post-reform,” the insurance industry and many of its major stakeholders are in a state of undeclared war. And the government is caught in the middle, dodging volleys of angry rhetoric from opposing sides.

Ontario’s private auto insurance industry is a train wreck. “When we concluded our study, Ontario had the most expensive system in the country due to regulatory severity and massive fraud,” says Emrul Hasan, an economics instructor at Vancouver’s Simon Fraser University and one of the author’s of the Fraser study.

Another out-of-province expert is even more frank. “Insurance company margins have increased incredibly over the last decade,” says British Columbia-based Bruce Cran, president of the Consumers’ Association of Canada. “The companies are making a lot of money and people are getting less benefits … to be perfectly honest, I don’t know how you’re going to fix Ontario.”

The battle lines are clearly drawn between The Industry and The Stakeholders, but who is manning the barricades? Leading the charge for the insurance industry is the Insurance Bureau of Canada (IBC), one of the savviest and best-financed lobby groups in the country. On the other side are the Ontario Trial Lawyers Association (OTLA), representing lawyers who negotiate and litigate for accident victims, and the Fair Associations for Victims of Accident Insurance Reform (FAIR), the victims’ lobby group.

This standoff was borne out of the 2010 reforms that generated billions of savings for the industry – and the targeted 15-per-cent reduction in premiums that the NDP secured from a minority Liberal government in the 2013 budget as part of the price for its ongoing legislative support. The industry loved the former and is less enthusiastic about the latter; vice versa for accident victims and trial lawyers. The 2013 reductions were meant to address issues pinpointed by reports such as Fraser’s, notably excessively expensive premiums. To date, rates have gone down just 4.66 per cent.

But the story doesn’t end there. Insurers demanded, and received, a pound of flesh for their lost revenue. Benefits for minor injuries were slashed from $30,000 to $3,500, deductibles were ratcheted up to $30,000 to deter litigating contested claims. And here’s the nut of the problem: 80 per cent of accident claims are deemed to fall within the minor injury guidelines, with its small cap. Unsurprisingly, accident victims pushed back.

There was a backlog of more than 30,000 accident claims in mediation until eight months ago, when the government hired an outside consultant to abet the process, but 16,000 cases remain in non-compulsory arbitration with 1,000 new cases entering dispute resolution monthly. Even the IBC admits the status quo is a mess.

“What is clear is that the system we have today, and what the government is trying to fix, is a system that is broken,” says Ralph Palumbo, the insurance lobby’s Ontario vice-president. How to fix it is tricky because the industry and some of its key stakeholders are at loggerheads.

Victims believe the insurance industry is making out like proverbial bandits. “They made over $2-billion after the 2010 cuts,” says OTLA president Charles Gluckstein. But Palumbo says it’s impossible to ask for a massive reduction in rates (insurance company revenue) without looking at the cost side of the equation. “Otherwise it’s not sustainable,” he says.

To critics who argue the industry made billions in the wake of the 2010 reforms, Palumbo says poppycock. “If you say it long enough, people start to believe it,” he says. He cites two commissioned actuarial studies that claim auto insurers’ return on equity hovers between 3.9 and 4.9 per cent. “Compared to the banks in the high-teens – say, around 17 per cent – that’s pretty modest, though some observers claim it’s as high as 25 per cent, which is ridiculous. All our critics ever talk about is the benefit side, never the cost side. And it’s a little tiring, and tiresome, coming from guys who are enriching themselves from the system.”
Palumbo is referring to the trial lawyers, and it should come as no surprise that they don’t buy the argument about the industry’s relative penury.
“The government is at the mercy of the industry and their view of their profits,” says Gluckstein. “That’s why the transparency aspect of the 2010 reforms is so vital because independent auditors will investigate the profits of the insurance industry.”

As part of its reform package, Ontario agreed to commission an annual Automobile Insurance Transparency and Accountability Expert Report. The first, from KPMG, is pending.

From the OTLA’s perspective, the industry camouflages its robust financial health with accounting chicanery. “All sorts of tax manoeuvring, underwriting adjustments, carried forward losses et cetera,” says Gluckstein. “The industry’s view is that if you want reduced premiums, you have to cut costs. So what happened to all the saving they earned on the backs of victims who had to give up all their coverage?”

Gluckstein says that comedian Rick Mercer brilliantly captured the present stalemate in one of his epic CBC rants: “We are your insurance company, we will take your premiums but if you have a claim, we will give you nothing – that’s how it works.”

Caught in the middle are accident victims. Part of the problem, says FAIR’s Rhona DesRoches, is the public’s relative disengagement and passivity on the issue. Maybe that’s not surprising: Ontario has nine million drivers but only 60,000 accident victims.

“No one ever thinks they’ll be in an accident, that it will happen to them,” DesRoches said. “Until they are and it does.”

An earlier online version of this story and the original newspaper version incorrectly stated that there is a backlog of more than 30,000 accident claims in mediation in Ontario. This online version has been corrected.

Province	Average Annual Premium
Quebec	$642
P.E.I.	$695
New Brunswick	$728
Nova Scotia	$736
Newfoundland and Labrador	$749
Alberta	$1,004
Manitoba	$1,027
Saskatchewan	$1,049
British Columbia	$1,113
Ontario	$1,281

Source: ROBERT COLLISON Special to The Globe and Mail

Published Wednesday, Apr. 16 2014, 5:00 AM EDT
Last updated Wednesday, Apr. 16 2014, 5:53 PM EDT

 http://www.theglobeandmail.com/globe-drive/new-cars/auto-news/the-problem-how-to-fix-ontarios-broken-insurance-system/article18024824/

Bar Dispute Resolution Group Forum (Counsel Forum)

Minutes of Meeting held on January 31, 2014

Members Present:                                                                                     

Joseph Rizzotto (Chair)

Philippa Samworth

Darrell March

Eric Grossman

Antoniette Alfano,

Tricia Hannigan

Paul Belanger

Jeffrey Kroeker

Catherine Korte

Stanley Pasternak

Andrew Choi

Laura Emmett via teleconference (Lerners Lawyers)

Leanne Zawadzki via teleconference (Lerners Lawyers)

Sonia Fabiani via teleconference (Lerners Lawyers)

 

FSCO Attendees:                                                              

Asfaw Seife

Rosemary Muzzi

John Lobo

Shayna Wiesenfeld

Margaret Orlander

Erika Ciocconi

Christina Pearce

 

 

1. Meeting on November 29, 2013. Approved as amended.
2. E-Calendar Update for Arbitration: Starting January 2014, auto-generated letters and notices will be sent to the parties electronically. Also the process of registering users for the enhanced Dispute Resolution Case Directory (DRCD-2) will begin.
   DRCD-2 will allow all parties to report settlements or withdrawal of files, update contact information, access case information in real time and provide access to e-Calendar to book pre-hearings and settlement discussions.
   Arbitration eCalendar will be fully implemented in April 2014. Paper notices of proceedings currently sent by mail will be eliminated and notices will be sent electronically. Until that time, parties will continue to receive both paper and electronic copies.
3. Private DR Services update:A. Seife, Director, DRS provided an update on files assigned to ADR Chambers. File assignments to ADRC increased to 750/month on January 20th. An RFP was posted on January 6th and will close on February 5th. We expect to have a new contract in place by June 2014.  File assignments under the existing contract will cease once the new contract is in place -  so the maximum # of files assigned in a month will remain at 750. The existing contract will remain in place as ADRC will continue to handle the files already assigned. ADRC’s contract has been  extended until March 2016 to allow time for it to close all files assigned.  The new RFP is not a reflection on ADRC. OPS procurement rules require FSCO to issue a new RFP. ADRC is eligible to submit a proposal in response to the new RFP.
4. DRS Status Report – Statistics and Staffing UpdatesAsfaw Seife, Rosemary Muzzi and John Lobo provided statistical updates for Mediation, Arbitration and Appeals with reference to the reports distributed to members.

 

Judicial Review:

 

No updates since September 2013.

 

Under Staffing:

Mediation Unit:

No updates.

Arbitration Unit:

Two new arbitrators joined December 2013.

 

Other items:

Standardized consent for IE forms:

Philippa Samworth raised a concern of having many different consent forms from IE providers and a number of refusals by counsel for the insured to have their client attend without pre-approval of the forms. A discussion followed and it was suggested that this item be raised in a separate forum.  M. Orlander agreed to bring the issue to AIPU for further discussion.

Unfair or Deceptive Acts or Practices(U.D.A.P):

Philippa Samworth suggested that it would be very helpful to have an educational session on the above mentioned matter to raise awareness about the process, how it is working and how we can use it to fight fraud.

MIG Project:

Margaret Orlander provided an update on a meeting that took place on January  17, 2014 with stakeholders who were invited by the experts to attend a presentation highlighting the research findings thus far.  As directed in the 2013 Budget, FSCO will provide the government with an interim report on the progress of the project. Later in the process, FSCO will also seek feedback from auto insurance stakeholders on the recommendations.

Justice Cunningham Report:

A final report with recommendations will be delivered to the Minister of Finance, and released to the public end of February, 2014.

 

 

Next Meeting – March 28, 2014

 

Source:  https://www.fsco.gov.on.ca/en/drs/counselforum/Pages/2014-01-31.aspx

FIGHTING FRAUD AND REDUCING AUTOMOBILE INSURANCE RATES ACT, 2014

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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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.

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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?

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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.

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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.

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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