Insurers applauding Ontario auto reforms

Additional auto insurance reforms, coming on the heels of those contained in Bill-198, are being welcomed with open arms by Ontario insurers.The reforms include several measures insurers have long been pushing for in the province, including a reduction in the insurance premium tax and measures to reduce auto insurance fraud.The changes come on top of Bill-198, and includes other such measures as a review of the Designated Assessment Center (DAC) system, a new schedule of fees for health care provision, and a definition of “serious and permanent” injury to be used in tort claims.”The reform package introduced today is excellent news for Ontario consumers,” says Mark Yakabuski, Ontario vice president for the Insurance Bureau of Canada (IBC). “Insurers will now have the tools to better control sharply escalating costs for health care and legal expenses. These are the costs that have been fuelling higher premiums over the past couple of years.”Yakabuski predicts that the changes will lead to cost savings that will be passed on to consumers in the months to come. “Although the reductions will vary from policyholder to policyholder, the savings will be significant,” he says.Yakabuski was specifically pleased to see the reduction in premium tax, as this is a measure insurers have been advocating for many years. Insurers argued that the tax, which was applied on top of existing provincial and federal sales taxes was unfair to consumers. “We are hopeful that other provincial governments will see this as an opportunity to provide their consumers with similar relief.”The IBC also lauded the fraud control aspects of the new reform package, including the provision that only income declared to Revenue Canada can be used as a basis for income replacement claims. As well, the reforms include funding for an OPP insurance fraud task force and specific training for Crown Prosecutors in insurance fraud crimes.”This is great news for all honest policyholders who pay the price for fraud,” says Terri MacLean, IBC’s executive vice-president of information and investigations. “We estimate conservatively that fraud adds at least 10% to the cost of insurance premiums. These announced reforms will give us the additional resources required to reduce this costly crime.”