Auto reforms regulated in Ontario

The reforms hinted at with the passage of “The Automobile Rate Stabilization Act of 2003” have now made their way into regulation. Friday, the Ontario Liberal government announced that it would repeal the auto rate freeze introduced late last year and that insurers are expected to file new, lower rates by January 23, 2004.Premier Dalton McGuinty had said a new auto insurance system would be introduced, but the reforms were made through regulatory change and represent smaller changes on top of those introduced by the former Tory government.Included in the new reforms, for which the Financial Services Commission of Ontario (FSCO) has released guidelines, are maximum fees for designated assessment centers (DACs), further definition of the new pre-approved framework (PAF) for minor injuries. Fees will be increased for health care providers who deal with seriously or permanently injured accident victims, adds Minister of Finance Greg Sorbara.Among the specific changes is the reduction of income replacement benefits (IRBs) for whiplash-associated injuries to 12 weeks for WAD I (less serious) and 16 weeks for WAD II claimants. Insurers will not be required to pay for transportation under 50kms to treatments sessions for minor injuries and other income that is taxed (e.g. CPP benefits) will be factored into IRB payments. The standard collision deductible will be $500, with the option to buy a higher limit, and tow truck and storage fees are capped at $300, except in Northern Ontario.Things that insurers will be required to take into consideration when filing new rates include by January 23, according to FSCO, include: the increase of the pain and suffering deductible from $15,000 to $30,000; the removal of this deductible for pain and suffering awards over $100,000; that CPP disability benefits will be deducted from the IRB; and the new, expanded definition of permanent serious impairment; expansion of ability to sure for excess health care by those with serious or permanent injuries. If insurers have already applied for rate reductions, this will be taken into account in the expectation of a 10% decrease, notes FSCO superintendent Bryan Davies.Sorbara says that further reforms will be addressed, with parliamentary assistant Mike Colle charged with finding ways to better “protect and inform” consumers. “Our reforms must look to the long-term as well as the short-term,” says Sorbara. “We will continue to work towards additional steps that lower rates, cut insurance costs and increase consumer protection and education, within a competitive marketplace.”