Insurers encouraged by Ontario auto reform movement

Ontario auto insurers say that, in general, they support the provincial government’s proposal for insurance product reform. The industry, represented by the Insurance Bureau of Canada (IBC), appeared before the government’s Auto Insurance Review Committee (AIRC).

The AIRC, which was appointed by the Minister of Finance to gather stakeholder responses to the proposed legislative changes initiated under Bill-166 and Bill-165, has begun a series of meetings with affected groups. Insurers hope that final legislation applying to auto insurance product reform will be passed by the government this fall. In its presentation to the AIRC, the IBC stressed the need for legislation to be passed before the end of the year.

The bureau also highlighted several issues which it believes have still to be addressed by the government in finalizing legislation. The IBC affirmed the need for Bill-166’s proposals to set standards for medical rehabilitation vendors to be acted on in full. Insurers are also concerned with the proposal allowing the Workers’ Safety Insurance Board (WSIB) to subrogate against costs incurred, as well as the government’s decision to subject the issue of “collateral benefits” shared by multiple party insurers to yet further review.

Furthermore, the IBC called on the government to act swiftly in applying a new rate filing system under a “file and use” approach. And, while the proposed legislative changes under Bill-166 in addressing fraud is a step in the right direction, the IBC notes, “while the government is taking steps in the right direction in proposing measures to prevent and detect fraud, regulate paralegals and deal with tow-truck abuses, its proposals do not go far enough”.

On the opposite end of the spectrum, some groups have expressed concern over the proposed reforms. Among these is the Collision Industry Action Group (CIAG), representing bodyshop owners. They are concerned with provisions that would have consumers pay extra for coverage to have repairs done with OEM (original equipment manufacturer) parts. “Shop and consumer complaints are epidemic, and lawsuits are still outstanding from consumers who found that the “aftermarket” parts installed, often without their knowledge, failed to fit, perform or had acceptable finish, compared to the original equipment parts,” says John Norris of the CIAG.