Insurance News - Monday, March 30, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, March 30, 2015:

• Ontario may increase mandatory reporting limit for collisions with no injuries to $2,000, from the $1,000 level set in 1998.  Five provinces have already increased their limits.
• Toronto Uber provides drivers with little information about insurance, including the name of their insurer.  Consumers should be aware that drivers' insurance policy may not provide them with coverage.
• New York’s top financial watchdog warned insurers this week about charging higher prices to customers least likely to shop around, the latest state to raise questions about how the industry uses data when setting rates.
• Alberta road safety bill has been passed by Legislature and will introduce demerit points for drivers convicted of distracted driving.
• Google explains why they created the driverless car.

New Inspection Powers to Address Auto Insurance Fraud

New inspection powers that were included in the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 come into effect on April 1, 2015.

The Consumer Protection Act, 2002 has amended to regulate consumer transactions involving tow and storage services and establishes rules for the towing and vehicle storage industries through measures that tackle questionable practices.

As examples, rules are provided for:

1. Disclosure of information to consumers.
2. Requirements that tow and storage services provided to consumers be authorized.
3. Deviating from estimated payment amounts.
4. The provision of itemized invoices.
5. Insurance requirements.
6. Publication of rates.
7. A Tow and Storage Consumers Bill of Rights.
8. Requirements that consumers be allowed to remove personal property from towed or stored vehicles.
9. The establishment of qualifications for tow and storage providers.

New inspectors will be appointed under the Consumer Protection Act in order to take a more preventative and targeted approach to enforcement through the use of education and awareness materials and new tools such as warning letters.

With these new changes, inspectors will be able to:

• Proactively enter a place of business in Ontario Examine documentation relevant to an inspection 
• Require the person being inspected to cooperate in the inspection 
• Issue orders to address and correct consumer issues, where appropriate.

This is part of an ongoing process in implementing recommendations made by the Automobile Insurance Anti-Fraud Task Force.

Uber Drivers, Consumers at Risk

I'm featured in the news report below on Uber and insurance.

Mon, Mar 23: Customers who used ride-sharing services like UberX may be at risk if the driver is involved in an accident. As Sean O’Shea reports insurance experts say drivers are violating insurance rules and may be putting themselves and their fares in jeopardy.

Insurance News - Sunday, March 22, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Sunday, March 22, 2015:

• The Court of Appeal for Ontario has ruled in favour of the insurer on a dispute regarding the two-year limitation period and bad faith in Blake v. The Dominion.
• Lying about where you garage your car to save on auto insurance is about to become a crime in New Jersey.
• Ohio becomes 38th state to approve the use of electronic proof of insurance.  Still no Canadian jurisdiction has introduced an electronic insurance card.
• Half of young Britons who drive for work fear being replaced by driverless cars before retirement.
• Another possible impact of driverless cars: Police forces may shrink as there will be no need for traffic enforcement.

Insurance News - Friday, March 20, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, March 20, 2015:

• Driveless cars may drive down your insurance costs.
• Not surprising, some insurance companies have suggested that driverless cars  may be a possible financial threat.
• Google has announced the introduction of a United States version of its Google Compare auto insurance shopping site, which has been operating in Britain for two years.
• Who is going to own and control the automotive market when driverless cars are introduced? Car manufacturers or technology companies?
• Uber and Lyft fail to convince judges their drivers are merely 'contractors'.
• Uber's "low-cost" UberPop service has been banned in Germany after a court decided it violated transport laws.

Government Begins FSCO Mandate Review

The Ontario government has launched a review of the mandates of the Financial Services Commission of Ontario (FSCO) and the Deposit Insurance Corporation of Ontario (DICO).

The mandate reviews were announced as part of the 2014 Ontario Fall Economic Statement.  A panel of experts has not been established to take the lead on the mandate reviews:

• George Cooke - former president and CEO of The Dominion of Canada General Insurance Company, and current chair of the board of directors of OMERS Administration Corp. 
• James Daw - former Toronto Star personal finance columnist who has written extensively about all facets of Ontario's financial system.
•  Larry Ritchie - Osler, Hoskin & Harcourt LLP partner and former vice-chair of the Ontario Securities Commission.

The FSCO mandate review is timely given a number of government actions.  In the fall, the government passed Bill 15 which includes provisions that when enacted will remove the auto insurance dispute resolution system from FSCO and create a new system at the Licence Appeal Tribunal.  In addition, the 2014 Auditor General report  proposed assigning the regulation of a number of entities (e.g., agents, adjusters and mortgage brokers) to industry associations. 

 The review will include broad consultations with the financial services sectors regulated by FSCO including the insurance sector and pension plans. As well, a consultation paper will be posted online and the public will be invited to comment on the issues being examined. The government will consider any necessary legislative changes based on the outcomes of the review. The government expects the review to be completed by early next winter.

Insurance News - Tuesday, March 3, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, March 3, 2015:

• IBC CEO Don Forgeron is suggesting that Ontario look at Nova Scotia on how to do auto insurance reforms.
• If 90% of auto accidents are due to human error, then who becomes liable when there are driverless cars on the road?
• In fact a University of Michigan study suggests that driverless cars will not be a panacea for road deaths, and could even worsen road safety for other drivers during the long transition period.
• Apple is being sued for poaching engineers to work on driverless car technology.
• A U.S. senator is urging the Justice Department to investigate insurance companies and auto repairs done at their 'preferred' repair shops across the country, because of safety concerns.

Insurance News - Saturday, February 28, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Saturday, February 28, 2015:

• The average auto insurance premium in Brampton is $2.393, the highest for Ontario cities, likely the highest in Canada.
• Lower gas prices will likely lead to more kilometers driven, more accidents and higher auto insurance rates.
• The U.K. is positioning itself to be the best jurisdictions for testing driverless cars with no geographic limits to test, no additional insurance requirements and no special licenses. Meanwhile Ontario has been taking over a year to decide what the rules should be.
• Old case but it show you how sophisticated staged accident rings can be. Peel police officer convicted of producing fake accident reports.
• It was only a matter of time, Geico is launching an insurance product for Uber and Lyft drivers in Virginia.
• Technology companies such as Google and Apple are unlikely to become mass car manufacturers, even if they have the potential to disrupt an industry increasingly focused on software and automated driving.

Insurance News - Tuesday, February 17, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, February 17, 2015:

• The OPP report that high-risk driving and fatal collisions on the rise in Ontario.
• Recent news shows Google and Uber  might by aiming at driverless cabs.
• Uber wants to replace its drivers with robots. So much for that “new economy” it was building.
• IBC raises concerns about extent of Uber auto insurance coverage (do they have any?)
• Intact is preparing for major technology companies (e.g. Google) to shake up the way Canadians buy insurance.

Insurance News - Monday, February 2, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, February 2, 2015:

• One Ontario broker is suggesting that insurers are blaming everyone else and not taking responsibility for rising claim costs.
• Queen’s Park is looking at ways to curb speed limits in Ontario cities and towns, including lowering the standard from 50 km/h.
• At least 15 family members have to charged in California for being part of an auto insurance fraud ring. Must be the family business.
• California regulator approves filing from Metromile Insurance to provide insurance coverage to Uber drivers.
• Germany will use of a "digitized" stretch of Autobahn to develop domestic alternatives to Google cars.
• Considering human drivers like to speed, will we be satisfied with driverless cars that rigidly follow speed-limits?

Insurance News - Saturday, January 31, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Saturday, January 31, 2015:

• To the list of jobs threatened by the Internet, you can now add independent insurance agents and brokers.
• It appears that Google cars drive on snow and ice like every Torontonian - like it was the first time seeing the stuff.
• Here are five pieces of technology your car may already have which are expected to evolve towards driverless cars.
• It is estimated that driverless cars could save Canadians $65 billion a year through fewer accidents, fuel savings, less congestion and reduced time on the road.
• Uber has suspended some drivers in California who registered cars for commercial use. But the DMV says that only cars with commercial registrations may carry passengers for hire in the state.
• Uber Toronto GM alleges 26 licensed Toronto taxi drivers failed to meet Uber standards thereby suggesting Uber has higher standards.

Personal Injury Lawyer Launches a Constitutional Challenge Against Bill 15

Joseph Campisi, a Toronto area personal injury has launched a constitutional challenge to Bill 15, Fighting Fraud and Reducing Auto Insurance Rates Act, 2014.  The bill received Royal Assent in November 2014 and introduces a number of changes to the auto insurance system including:

• moving SABS disputes to the Licence Appeal Tribunal
• introduce  regulation to the towing and vehicle storage industries
• authorize the province to reduce vehicle storage costs.

However the likely the trigger for the action is the provision in the bill that takes away the right of accident victims to take disputes regarding accident benefits to the courts instead of arbitration.  This provision was opposed by both plaintiff and defense lawyers, accident victims and health professional groups. Below is post on Joseph Campisi's blog regarding his action.

Joseph Campisi, lawyer and advocate, is launching a constitutional challenge in the Ontario Superior Courts.  Mr. Campisi is seeking a declaration from the courts that parts of the legislation that were recently passed by the Liberal Government are discriminatory and unconstitutional and should be inoperative.

“The right to access the Superior Courts is a fundamental right for Canadians.  I am concerned that the recently proclaimed legislation will deny this right to individuals who have been severely disabled.” said applicant and noted Personal Injury Lawyer Joseph Campisi.  “Historically, the deck has been stacked against collision victims.  The recent amendments to the legislation have turned a bad situation into a worse one for these vulnerable individuals.  No longer will these individuals be allowed to have the assurance of impartiality and independence that is a cornerstone of our justice system when litigating a claim against their own insurance company.  I could not stand idly by and let this happen.”

In the fall, of 2014, the Ontario Government passed Bill 15 which is titled Fighting Fraud and Reducing Automobile Insurance Rates.  One of the legislative amendments changes how disputes between insurers and insured are settled.  Historically, disputes could be brought before the Superior Courts or before sophisticated arbitrators with expertise in interpreting insurance law.  Bill 15 has changed how disputes are resolved by giving the sole adjudicative power to individuals who will be appointed at the whim of the Liberal Government.  These are the same decision makers who have jurisdiction on matters ranging from film classification to upholstered and stuffed articles. Unlike historical appointments, individuals without any specialization or guaranteed independence or impartiality will be ruling on disputes that can run into the millions of dollars and will determine the quality of life that an automobile victim will face going forward.

“This application will challenge Bill 15 on the basis that it violates disabled persons’ Chapter s.15(1) right to be free from discrimination.  Bill 15 is also being challenged based on s.96 of the Constitution which relates to the public’s right to have access to the courts.  The way in which Bill 15 is drafted opens the door to political interference.  The government of the day can choose who will hear any dispute and if the government does not agree with the arbitrator’s decisions, the government can get rid of the adjudicator the next day.  When it comes to lobbying the government there is little doubt as to who has the deeper pockets- automobile insurers or accident victims.  Introducing such laws is undemocratic and detracts from the rule of law.  This legal challenge will fight for disabled individuals’ right to fair treatment and the public’s right to access the impartial court system.”

Ontario Auto Insurance Rates Fall by 1.44% in 2014

This past week FSCO released rate filings approved for fourth quarter of 2014. Sixteen insurers, representing 46.81% of the market based on premium volume, had rates approved in the fourth quarter of 2014. Approved rates decreased on average by 0.54% when applied across the total market.  The total annual approved rate decreased on average  1.44% in 2014.

 In the backdrop is the Ontario government's commitment to reduce rates in the province by 15% before August 15, 2015. The chart below breaks down the quarterly rate approval changes following the announcement of the rate reduction strategy in 2013. The third quarter of 2013 has been included although many of the rate approvals for that quarter may have been filed well before the strategy was announced.

Quarter	Rate Change
2013-3Q	-0.68%
2013-4Q	-3.98%
2014-1Q	-1.01%
2014-2Q	+0.22%
2014-3Q	-0.11%
2014-4Q	-0.54%
Total 2014	-1.44%
Total Since Aug 2013	-6.10%

The accumulative rate reductions approved by FSCO during this period have been  6.1%. With just 7 months remaining, the government is considerably short of its target and requires further reductions of about 9%.  Likely not achievable in the remaining time despite the recent passage of Bill 15 and a number of regulatory changes.  The government will not achieve sufficient savings from reduced interest payments and the licensing of service providers to bring down rates another 9%.  If the creation of a new dispute resolution system at the Licence Appeal Tribunal has an impact on costs, it will not happen in 2015.  

However, the government has not abandoned their rate reduction strategy.  That might mean additional reforms may be on the way and that the timeframe for achieving the target will need to be extended.  The report on FSCO's Three Year Review has not been released The review was initiated in 2014 and one must assume it was been completed by now.  It is possible that the review could evolve into another set of reforms as was the case in 2009. The government is also committed to a minor injury treatment protocol, towing regulations and changes to the definition of catastrophic impairment.  

We shall see what transpires in the months ahead.

Insurance News - Monday, January 12, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, January 12, 2015:

• As the number of car fatalities falls Americans are now more likely to die from getting shot than in car accidents.
• This is incredible.  With all the articles and warnings about distracted driving, a website operated by the Toronto Star is suggesting that drivers exercise in their car while stopped at red lights.
• Is it a good idea to lower the cost of auto insurance and risk under-insuring yourself?
• China’s transport ministry has banned taxi hailing apps such as Uber from using cars and drivers without taxi licences in a bid to regulate the rapidly growing sector.
• Driverless car technology will rollout gradually. The first driverless cars will likely allow the car to self-drive in stop-and-go highway traffic, but when traffic clears the driver takes the wheel again.

Insurance News - Saturday, January 10, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Saturday, January 10, 2015:

• A British insurer may be the first in the industry to offer driving lessons for drivers’ weaknesses based on telematics data.
• Florida auto insurance anti-fraud reforms that become effective on January 1, 2013 has created a drop in the number of personal-injury protection claims filed and dollars sought.
• GM and OnStar will be partnering with a U.S. insurer allowing new car owners to opt into a service that will track driving habits during a 90 day span.
• Google may be moving into the U.S. auto insurance market with a shopping site for people to compare and buy policies, as it continues to shift its attention to the automotive industry.
• A Towers Watson study suggests that claim supervisors spend too little time reviewing files of direct reports which is impacting on profitability.

Insurance News - Thursday, January 8, 2015

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, January 8, 2015:

• Will Google cars eviscerate the personal injury bar?
• With an aging population and reduced driving, what will happen to the industry if auto claims keep dropping?
• California to offer low-cost car insurance (under $450) and drivers licences to illegal immigrant drivers to reduce the number driving uninsured.
• The private company hired by the province to conduct all driving exams was failing to properly road test tractor-trailer drivers.
• Ridesharing and Car Insurance: A little white lie?
• It’s not just drunk and distracted drivers that are dangerous but drowsy drivers as well.

Insurance News - Tuesday, December 30, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, December 30, 2014:

• Bill 15 changes to prejudgement interest calculations will become effective on January 1, 2015.
• Many ride-sharing drivers are perplexed by the mixed messages that they receive and therefore opt for silence when it comes to informing their insurers. The situation is becoming problematic as ride-sharing programs expand and drivers are having accidents.
• As Uber collects a mountain of data from its ride-sharing app, it is very likely that the information will be used to expand into services, such as moving goods not just people.
• Once you get passed the rhetoric, what has become clear is that Uber has exposed flaws in taxi services in Canadian cities. Consumers look forward to reforms.
• California’s Department of Motor Vehicles will miss a year-end deadline to adopt a new set of rules for driverless cars and other cars of the future because there’s still no certainty that driverless vehicles are safe.

Insurance News - Tuesday, December 23, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, December 23, 2014:

• Over $1 million in stolen vehicles recovered and 7 people charged as police investigation nabs international car theft ring operating in Toronto, York Region and Durham Region.
• It appears Uber may be telling its California drivers that personal rather than commercial auto insurance is sufficient leaving them uncovered and driving illegally.
• Google unveiled its first prototype of a fully-functional, driverless car which has actually been built on a patchwork of auto parts.
• Not a surprise that Google is also seeking an auto industry partner to develop its driverless car because it does not want to be a car maker.
• The Nova Scotia government has changed its position on a controversial lawsuit to clawback a settlement award for an catastrophic claim involving a young woman with a severe brain injury.

Insurance News - Saturday, December 20, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Saturday, December 20, 2014:

• Smartphone applications and devices that record trip and vehicle data are set to infiltrate auto insurance at a rapid pace, bolstered by discounts of as much as 30 percent.
• A new Uber-like phone app lets stranded drivers summon the nearest tow truck. Is this a good or bad thing?
• It seems driverless cars do not do well in rain, snow and fog.  Just like we humans.
• Given the size of the Ontario auto insurance market, recent auto insurance reforms (Bill 15) could impact on the entire Canadian P&C market.
• Not everyone is happy about Bill 15. Tow trucks organized a protest at Queen's Park regarding provisions in Bill 15 dealing with towing regulation.
• Uber's process for vetting potential drivers is receiving a lot of scrutiny.

Are Insurers Using Cost Control Tools Properly?

I noticed an interesting section at the end of a recent bulletin issued by FSCO regarding recent regulation changes that I reviewed in a recent post.  Thrown in with the announcement of regulatory changes is a discussion on mileage expenses by health care providers.

The bulletin goes on to state that FSCO is aware that some health care providers are submitting mileage expenses to insurers to travel to an injured accident victim to provide services. Insurers are reminded that "authorized transportation expenses", as defined in the SABS, are intended to apply to expenses incurred by the insured person and not health care providers.  Details of what can be claimed by insured persons are subject to the Superintendent’s Transportation Expense Guideline.

The bulletin also reminds insurers that hourly fees in the Superintendent's Professional Services Guideline include all administration costs, overhead, and related costs, fees, expenses, charges and surcharges. Insurers are not liable for any administration or other costs, overhead, fees, expenses, charges or surcharges that have the result of increasing the effective hourly rates, or the maximum fees payable for completing forms, beyond what is permitted under the Professional Services Guideline.

My guess is that these aren't just friendly reminders.  More likely FSCO has become aware that health care providers are submitting for mileage and other expenses related to treatment of insureds, and insurers are paying them.  While the industry is lobbying government to reduce costs in the system, insurers are paying for expenses that do not fall under the SABS.

Having worked for the government for many years I am fully aware of the amount of lobbying in which stakeholders partake.  Insurance companies are not shrinking violets when it comes to lobbying efforts.  There is a constant list of suggested changes presented to government officials to reduce the cost of auto insurance.

It was frustrating to work on endless changes to the system that will never be fully utilized. We now have a complex set of rules, many proposed by the insurance industry, that are not always being used. It is a system that is too complex for many to properly understand and use.

Yet the government keeps churning out more regulation and rule changes to drive down costs.  But growing red tape and complexity likely have the opposite affect.  Transactional costs keep going up for insurers, health care providers and legal representatives which ensures that the price of auto insurance in Ontario remains high.

As the service provider licensing system is rolled out and soon to be followed by a new minor injury protocol I wonder which direction costs will go - up or down.