A Toronto man has been charged in connection with an insurance fraud investigation.
According to Toronto police, the fraud scheme involved a paralegal who said he was operating under Royal Sun and Alliance Company, using 'Executive Brokers' as the name of the insurance broker.
The brokerage address was presented as 251 Consumers Road #1200.
Police allege:
the victim would purchase car insurance from the accused,
the victim believed the insurance was valid,
the perpetrator took $3,000 cash for the insurance,
the perpetrator forged all necessary documentation for the car insurance.
Concerned that there might be other victims who bought insurance from the perpetrator or his company, and who are now driving without valid insurance, Toronto Police have released a photo of the accused.
Police are appealing to any one who might have purchased insurance from the accused or Executive Brokers to contact the Registered Insurance Brokers of Ontario (RIBO) to ensure that they do, in fact, have valid insurance.
Peter Joseph of Toronto has been charged with false pretences under $5,000, forgery and uttering forged document.
Friday, November 26, 2010
Friday, November 19, 2010
Ontario arbitrator orders claimant to produce insurer with two years' worth of medical, prescription records in non-earner benefits case
An Ontario arbitrator has ordered a claimant to provide his insurer, Aviva Canada, with two years' worth of medical and prescription records in a non-earner benefits case.
This is one year beyond the standard practice of requiring production of only one year's worth of medical records in accident benefits arbitrations.
Aviva initially asked the claimant to produce medical records dating back to 2000 and prescription records dating back to 1990. Aviva claimed the reason for going back so far was relevant to Ablarde's claim for non-earner benefits.
Entitlement to non-earner benefits is based on a person suffering from a complete inability to carry on a normal life after an injury sustained in an auto collision. To determine entitlement, the person's activities and life circumstances before the collision must be taken into account.
Ablarde was injured in an auto collision in 2007.
In a pre-hearing decision in Richard Ablarde and Aviva Canada Inc., Financial Services Commission of Ontario (FSCO) arbitrator John Wilson wrote: "I do not accept that it is either necessary or appropriate to order production of [Ablarde's] OHIP summary and prescription records going back to the millennium and beyond."
Nevertheless, Wilson also found the nature of the non-earner benefit made it relevant to go beyond the traditional one-year window allowed in arbitrations.
"The non-earner benefit...differs somewhat from many other accident benefits," Wilson wrote. "Firstly, it is not payable for the first six months.
"Secondly, rather than looking at a short span of time to determine entitlement, one must examine the activities of daily life for 'a reasonable period of time' both before and after a motor vehicle accident.
"Consequently, the one-year suggested limit on medical productions may not always be appropriate."
This is one year beyond the standard practice of requiring production of only one year's worth of medical records in accident benefits arbitrations.
Aviva initially asked the claimant to produce medical records dating back to 2000 and prescription records dating back to 1990. Aviva claimed the reason for going back so far was relevant to Ablarde's claim for non-earner benefits.
Entitlement to non-earner benefits is based on a person suffering from a complete inability to carry on a normal life after an injury sustained in an auto collision. To determine entitlement, the person's activities and life circumstances before the collision must be taken into account.
Ablarde was injured in an auto collision in 2007.
In a pre-hearing decision in Richard Ablarde and Aviva Canada Inc., Financial Services Commission of Ontario (FSCO) arbitrator John Wilson wrote: "I do not accept that it is either necessary or appropriate to order production of [Ablarde's] OHIP summary and prescription records going back to the millennium and beyond."
Nevertheless, Wilson also found the nature of the non-earner benefit made it relevant to go beyond the traditional one-year window allowed in arbitrations.
"The non-earner benefit...differs somewhat from many other accident benefits," Wilson wrote. "Firstly, it is not payable for the first six months.
"Secondly, rather than looking at a short span of time to determine entitlement, one must examine the activities of daily life for 'a reasonable period of time' both before and after a motor vehicle accident.
"Consequently, the one-year suggested limit on medical productions may not always be appropriate."
Tuesday, November 2, 2010
Bad faith no longer necessary for monetary awards for breach of Charter rights: Supreme Court of Canada
Bad faith is no longer a necessary requirement for awarding monetary damages for the breach of a Charter right following a recent Supreme Court of Canada decision, Blaney McMurtry LLP reported in its Insurance Observer.
In Vancouver (City) v Ward, a unanimous Supreme Court of Canada upheld a damages award for an unconstitutional strip search and vehicle seizure, absent bad faith on the part of the police, wrote Rafal Szymanski, a member of Blaney McMurty's insurance defence group, in the article Absense of Malice: Charter Damages Redefined.
In Ward, Vancouver police acted on a tip that an unknown individual planned to throw a pie at then Prime Minister Jean Chretien during a public appearance.
Ward was mistakenly identified as the suspect and arrested. In custody, police strip searched him, but did not as him to remove his underwear, not was he touched by the officers. His car was impounded, with the intention of obtaining a search warrant.
When it was determined that there were no grounds for a warrant and there was insufficient evidence to support a charge, he was released, wrote Szymanski.
Ward brought an action in tort and for breach of his Charter right. The lower court held that there was no tort liability, but that his section 8 Charter right to be free from unreasonable search and seizure had indeed been violated. Damage for the breach was set in the amount of $100 for the seizure of the car and $5,0000 for the strip search.
The Supreme Court of Canada confirmed the trial judge's award, deeming them to be "appropriate and just both from the perspective of the plaintiff and the defendant," wrote Szymanski.
"With Ward, the Supreme Court of Canada has provided plaintiffs with an avenue to prosecute government entities for monetary relief, even where such entities were not acting in bad faith," wrote Szymanski. "This will no doubt lead to an increase in litigation.
In Vancouver (City) v Ward, a unanimous Supreme Court of Canada upheld a damages award for an unconstitutional strip search and vehicle seizure, absent bad faith on the part of the police, wrote Rafal Szymanski, a member of Blaney McMurty's insurance defence group, in the article Absense of Malice: Charter Damages Redefined.
In Ward, Vancouver police acted on a tip that an unknown individual planned to throw a pie at then Prime Minister Jean Chretien during a public appearance.
Ward was mistakenly identified as the suspect and arrested. In custody, police strip searched him, but did not as him to remove his underwear, not was he touched by the officers. His car was impounded, with the intention of obtaining a search warrant.
When it was determined that there were no grounds for a warrant and there was insufficient evidence to support a charge, he was released, wrote Szymanski.
Ward brought an action in tort and for breach of his Charter right. The lower court held that there was no tort liability, but that his section 8 Charter right to be free from unreasonable search and seizure had indeed been violated. Damage for the breach was set in the amount of $100 for the seizure of the car and $5,0000 for the strip search.
The Supreme Court of Canada confirmed the trial judge's award, deeming them to be "appropriate and just both from the perspective of the plaintiff and the defendant," wrote Szymanski.
"With Ward, the Supreme Court of Canada has provided plaintiffs with an avenue to prosecute government entities for monetary relief, even where such entities were not acting in bad faith," wrote Szymanski. "This will no doubt lead to an increase in litigation.
Psychological and physical injuries cannot be combined to determine catastrophic impairment: Ontario Superior Court
Percentage determinations of psychological impairments cannot be added to percentage determinations of physical impairments to determine whether or not a person has suffered a whole person ‘catastrophic impairment' under the Statutory Accidents Benefits Schedule (SABS), the Ontario Superior Court of Justice has found.
S. 43, Clause 2(1.1)(f) of the SABS states a person has suffered a catastrophic injury if: "an impairment or combination of impairments...in accordance with the American Medical Association's Guides to the Evaluation of Permanent Impairment, 4th edition, 1993, results in 55 per cent or more impairment of the whole person."
Courts and arbitrators are frequently asked to combine percentage-based determinations of physical and psychological impairments to arrive at a conclusion that a person had met the 55% threshold of a catastrophic impairment.
But in Kusnierz v. The Economical Mutual Insurance Company, released on Oct. 19, 2010, the Ontario Superior Court says this type of combination of psychological and physical impairments cannot be done.
"I find that it is not permissible under the SABS to assign percentage values to mental and behavioural disorders under Chapter 14 of the Guides...and then combine them with the percentage values derived from impairments assessed under the other chapters of the Guides (referred to in clause 2(1.1)(f) of the SABS) in determining whether an individual meets the catastrophic impairment threshold of "55 per cent or more impairment of the whole person," Ontario Superior Court Justice Peter Lauwers wrote in his decision.
"I reach this conclusion for the following reasons, in a nutshell:
"(i) The Guides deliberately do not permit the mental and behavioural disorders in Chapter 14 to be assessed in percent terms and combined with the percentage values derived from impairments assessed under the other chapters of the Guides for the purpose of determining whole person impairment;
(ii) The structure of the SABS reinforces the bright line demarcation between mental and behavioural disorders referred to in Chapter 14 of the AMA Guides - specifically referred to in clause 2(1.1)(g) of the SABS - from the impairments assessed under the other chapters of the Guides which are referred to in clause 2(1.1)(f) of the SABS; and
(iii) This interpretation is consistent with the purpose of the specific provisions of Bill 59 and the SABS that this issue engages."
George Cooke, president and CEO of The Dominion of Canada General Insurance Company, praised the ruling during the Insurance Brokers Association of Ontario (IBAO)'s 90th Annual Convention in Niagara Falls. But it does seem likely, based on the importance of the ruling to the industry, that the decision will be appealed.
S. 43, Clause 2(1.1)(f) of the SABS states a person has suffered a catastrophic injury if: "an impairment or combination of impairments...in accordance with the American Medical Association's Guides to the Evaluation of Permanent Impairment, 4th edition, 1993, results in 55 per cent or more impairment of the whole person."
Courts and arbitrators are frequently asked to combine percentage-based determinations of physical and psychological impairments to arrive at a conclusion that a person had met the 55% threshold of a catastrophic impairment.
But in Kusnierz v. The Economical Mutual Insurance Company, released on Oct. 19, 2010, the Ontario Superior Court says this type of combination of psychological and physical impairments cannot be done.
"I find that it is not permissible under the SABS to assign percentage values to mental and behavioural disorders under Chapter 14 of the Guides...and then combine them with the percentage values derived from impairments assessed under the other chapters of the Guides (referred to in clause 2(1.1)(f) of the SABS) in determining whether an individual meets the catastrophic impairment threshold of "55 per cent or more impairment of the whole person," Ontario Superior Court Justice Peter Lauwers wrote in his decision.
"I reach this conclusion for the following reasons, in a nutshell:
"(i) The Guides deliberately do not permit the mental and behavioural disorders in Chapter 14 to be assessed in percent terms and combined with the percentage values derived from impairments assessed under the other chapters of the Guides for the purpose of determining whole person impairment;
(ii) The structure of the SABS reinforces the bright line demarcation between mental and behavioural disorders referred to in Chapter 14 of the AMA Guides - specifically referred to in clause 2(1.1)(g) of the SABS - from the impairments assessed under the other chapters of the Guides which are referred to in clause 2(1.1)(f) of the SABS; and
(iii) This interpretation is consistent with the purpose of the specific provisions of Bill 59 and the SABS that this issue engages."
George Cooke, president and CEO of The Dominion of Canada General Insurance Company, praised the ruling during the Insurance Brokers Association of Ontario (IBAO)'s 90th Annual Convention in Niagara Falls. But it does seem likely, based on the importance of the ruling to the industry, that the decision will be appealed.
Accident benefits arbitrations face the same kind of backlogs seen in courts: FSCO director delegate
Arbitration is supposed to offer a cheaper, quicker alternative to the courts when resolving accident benefits disputes, but the current reality is completely different, Lawrence Blackman, director delegate at the Financial Services Commission of Ontario (FSCO), says.
At the Canadian Defence Lawyers (CDL)'s 3rd Annual Accident Benefits Experts Seminar in Toronto on Nov. 1, 2010, Blackman spoke about the importance of sticking to best practices in an effort to keep arbitrations on a timely schedule.
"What is the reality?" Blackman asked rhetorically. "You know as well as I do what the reality is. The reality on both sides is boilerplate pleadings, boilerplate production requests, fishing expeditions...a jury policy where at least 95% of requests are granted, last-minute adjournment requests, hearings extending for weeks, months, even longer, bankers' boxes of documents that are duplicated repeatedly and although the system does at present have arbitration hearings available next week, I see that arbitrators are booking hearings for the autumn of 2011."
Blackman said there were 14,000 applications for mediations in the 12-month period ending 2007. Last year, there were 26,000 applications in the same period.
"That is 500 applications for mediation a week," Blackman said. "That's an 89% increase, and there has been no increase in staff."
Three years ago, there were 4,500 mediations pending. In September 2010, the number was just shy of 20,000.
Blackman said general arbitration guidelines provide that an arbitration be assigned to a mediator within three weeks of receipt of a completed application. "Presently, there is an eight-month gap," he said.
As for arbitration pre-hearings, there is a similar backlog, Blackman noted. As of September 2010, FSCO received 4,000 applications for a pre-hearing in the past 12-month period, which amounts to 80 applications per week.
"In next 18 weeks, there are 31 pre-hearing spots available," said Blackman.
At the Canadian Defence Lawyers (CDL)'s 3rd Annual Accident Benefits Experts Seminar in Toronto on Nov. 1, 2010, Blackman spoke about the importance of sticking to best practices in an effort to keep arbitrations on a timely schedule.
"What is the reality?" Blackman asked rhetorically. "You know as well as I do what the reality is. The reality on both sides is boilerplate pleadings, boilerplate production requests, fishing expeditions...a jury policy where at least 95% of requests are granted, last-minute adjournment requests, hearings extending for weeks, months, even longer, bankers' boxes of documents that are duplicated repeatedly and although the system does at present have arbitration hearings available next week, I see that arbitrators are booking hearings for the autumn of 2011."
Blackman said there were 14,000 applications for mediations in the 12-month period ending 2007. Last year, there were 26,000 applications in the same period.
"That is 500 applications for mediation a week," Blackman said. "That's an 89% increase, and there has been no increase in staff."
Three years ago, there were 4,500 mediations pending. In September 2010, the number was just shy of 20,000.
Blackman said general arbitration guidelines provide that an arbitration be assigned to a mediator within three weeks of receipt of a completed application. "Presently, there is an eight-month gap," he said.
As for arbitration pre-hearings, there is a similar backlog, Blackman noted. As of September 2010, FSCO received 4,000 applications for a pre-hearing in the past 12-month period, which amounts to 80 applications per week.
"In next 18 weeks, there are 31 pre-hearing spots available," said Blackman.
Ontario's $2,000 cap on AB assessments could be vulnerable to Charter challenge: AB seminar panelist
By including a health practitioner's travel and translation costs within a $2,000 limit on auto insurance accident benefits assessments, the new Ontario auto insurance reforms may be heading down the highway towards a Charter challenge.
"On the issue of including the transportation costs and the translation costs, I would think that's a Charter issue that would be challenged quite quickly, because there's a [potential] disenfranchisement of people who don't live in urban centres and people who do not speak English," said Kadey B.J. Schultz of Hughes Amys, who made the point at a panel discussion on the recent reforms to the Ontario Statutory Accident Benefits Schedule. "They might not get the same value for money out of their policy of insurance as the people living in the Greater Toronto Area and English-speaking people would."
The panel discussion occurred at the Canadian Defence Lawyers (CDL)'s 3rd Annual Accident Benefits Experts Seminar in Toronto on Nov. 1, 2010.
Schultz made her comment after fellow panelist Dr. Arthur Ameis of the Multi Disciplinary Assessment Centre (MDAC) criticized the inclusion of travel and translation costs within the $2,000 cap. He noted the inclusion of these costs would make it difficult to find health practitioners willing to perform assessments on behalf of insurers.
For example, Ameis suggested health practitioners would have no incentive to travel to underserviced and/or remote areas to perform at-home assessments, since the cost to do so would be counted against the assessment limit. "Transportation?" he said of the costs. "Well, that basically precludes service in places such as Rainy River, Timmins, Kapuskasing."
Similarly, he said, health practitioners might choose not to assess claimants whose first language wasn't English. "Why should I as a physician, when I could at most make $2,000, accept a patient who doesn't speak English?" he said. "I am going to have to have some of my fee taken out to pay for the translator."
Ameis noted that even first-year general practitioners bill at $492 per hour, which would reach the $2,000 assessment limit in about four hours.
Ameis emphasized that health practitioners do not perform assessments casually. He noted they are required to do long, extensive reports; receive banker's boxes of documentation in order to do an assessment; often have their credentials questioned publicly in court and arbitration settings; and could potentially face civil suits or disciplinary hearings as a result.
"So the attractiveness of this work is low," he said. "We're facing a situation where a couple of years from now at arbitration, the plaintiff lawyers may or may not have gotten around the cap to get their assessments done, but the insurers are held to the cap, and they are going to be presenting less-than-complete, less-than-expert, less-than-satisfactory, less-than-exhaustive assessment reports to counter the situation. And yet no one has touched the arbitration system, which is exceedingly demanding."
"On the issue of including the transportation costs and the translation costs, I would think that's a Charter issue that would be challenged quite quickly, because there's a [potential] disenfranchisement of people who don't live in urban centres and people who do not speak English," said Kadey B.J. Schultz of Hughes Amys, who made the point at a panel discussion on the recent reforms to the Ontario Statutory Accident Benefits Schedule. "They might not get the same value for money out of their policy of insurance as the people living in the Greater Toronto Area and English-speaking people would."
The panel discussion occurred at the Canadian Defence Lawyers (CDL)'s 3rd Annual Accident Benefits Experts Seminar in Toronto on Nov. 1, 2010.
Schultz made her comment after fellow panelist Dr. Arthur Ameis of the Multi Disciplinary Assessment Centre (MDAC) criticized the inclusion of travel and translation costs within the $2,000 cap. He noted the inclusion of these costs would make it difficult to find health practitioners willing to perform assessments on behalf of insurers.
For example, Ameis suggested health practitioners would have no incentive to travel to underserviced and/or remote areas to perform at-home assessments, since the cost to do so would be counted against the assessment limit. "Transportation?" he said of the costs. "Well, that basically precludes service in places such as Rainy River, Timmins, Kapuskasing."
Similarly, he said, health practitioners might choose not to assess claimants whose first language wasn't English. "Why should I as a physician, when I could at most make $2,000, accept a patient who doesn't speak English?" he said. "I am going to have to have some of my fee taken out to pay for the translator."
Ameis noted that even first-year general practitioners bill at $492 per hour, which would reach the $2,000 assessment limit in about four hours.
Ameis emphasized that health practitioners do not perform assessments casually. He noted they are required to do long, extensive reports; receive banker's boxes of documentation in order to do an assessment; often have their credentials questioned publicly in court and arbitration settings; and could potentially face civil suits or disciplinary hearings as a result.
"So the attractiveness of this work is low," he said. "We're facing a situation where a couple of years from now at arbitration, the plaintiff lawyers may or may not have gotten around the cap to get their assessments done, but the insurers are held to the cap, and they are going to be presenting less-than-complete, less-than-expert, less-than-satisfactory, less-than-exhaustive assessment reports to counter the situation. And yet no one has touched the arbitration system, which is exceedingly demanding."
Friday, October 29, 2010
Just a few steps separate slip-and-fall liability from accident benefits
Just a few steps can mean the difference between a slip-and-fall case and auto insurance accident benefits payments, as illustrated in an arbitration decision issued by the Financial Services Commission of Ontario (FSCO).
In Fee Nung Wong and St. Paul Fire & Marine Insurance Company, Fee Nung Wong sought accident benefits after she slipped and fell while getting off a motor coach owned by AZ Bus Tours and insured by St. Paul.
Wong was traveling back to Toronto from Casino Rama in the morning of Mar. 13, 2008. The bus had a number of drop-off points in Toronto, including a Kentucky Fried Chicken parking lot, which was covered in black ice.
"From the point of view of eligibility for accident benefits, the manner and timing of Ms. Wong's fall is crucial," FSCO arbitrator John Wilson wrote in his decision.
"In this matter, Ms. Wong alleges that any impairments she suffered as a result of her fall were directly caused by the use or operation of the motorcoach in which she traveled from Casino Rama to Toronto.
"St. Paul on the other hand takes the position that however unfortunate Ms. Wong may have been, she actually suffered a slip and fall on an icy parking lot that was not in the control of the operator, and which was not occasioned by the use or operation of a motor vehicle."
Testimony at the arbitration suggested Wong had slipped after she had stepped one or two metres from the bus.
"It is plausible that if Ms. Wong stumbled or tripped on the stairs of the coach, and tumbled headlong to the ground, finishing some metres away from the coach, her injuries sustained in ultimately hitting the ground could be found to arise directly from the operation of a motor vehicle - the motorcoach in this case," Wilson found.
"Such a scenario and such a conclusion would be consistent with Re Polemis. It would not, however, be consistent with the evidence in this arbitration."
Wong was therefore not entitled to accident benefits, Wilson ruled.
"There was a separation in distance and time from the disembarkation from the coach and the subsequent slip and fall," he wrote. "I find therefore that the incident that gave rise to Ms. Wong's injuries did not directly
In Fee Nung Wong and St. Paul Fire & Marine Insurance Company, Fee Nung Wong sought accident benefits after she slipped and fell while getting off a motor coach owned by AZ Bus Tours and insured by St. Paul.
Wong was traveling back to Toronto from Casino Rama in the morning of Mar. 13, 2008. The bus had a number of drop-off points in Toronto, including a Kentucky Fried Chicken parking lot, which was covered in black ice.
"From the point of view of eligibility for accident benefits, the manner and timing of Ms. Wong's fall is crucial," FSCO arbitrator John Wilson wrote in his decision.
"In this matter, Ms. Wong alleges that any impairments she suffered as a result of her fall were directly caused by the use or operation of the motorcoach in which she traveled from Casino Rama to Toronto.
"St. Paul on the other hand takes the position that however unfortunate Ms. Wong may have been, she actually suffered a slip and fall on an icy parking lot that was not in the control of the operator, and which was not occasioned by the use or operation of a motor vehicle."
Testimony at the arbitration suggested Wong had slipped after she had stepped one or two metres from the bus.
"It is plausible that if Ms. Wong stumbled or tripped on the stairs of the coach, and tumbled headlong to the ground, finishing some metres away from the coach, her injuries sustained in ultimately hitting the ground could be found to arise directly from the operation of a motor vehicle - the motorcoach in this case," Wilson found.
"Such a scenario and such a conclusion would be consistent with Re Polemis. It would not, however, be consistent with the evidence in this arbitration."
Wong was therefore not entitled to accident benefits, Wilson ruled.
"There was a separation in distance and time from the disembarkation from the coach and the subsequent slip and fall," he wrote. "I find therefore that the incident that gave rise to Ms. Wong's injuries did not directly
Ontario arbitrator notes insurers must take more care in a post-DAC world
An Ontario arbitrator has granted a special award against an insurer that terminated income replacement benefits to a claimant, on the basis that the insurer uncritically relied on a vocational assessment that appeared to have been the product of what the arbitrator described as an "assessment mill."
In making his decision, Financial Services Commission of Ontario (FSCO) arbitrator John Wilson highlighted what he saw as a problem endemic ever since the dissolution of the Designated Assessment Centres (DACs) in Ontario in 2006.
"To a degree...Mr. Cowans' claims bring into question the way Motors [Insurance Corporation] and perhaps other insurers deal with the determination of entitlement to benefits in a post-DAC world, and how the system of insurer's assessments that replace the DAC system fits into such determinations," Wilson wrote.
In Everliston Cowans and Motors Insurance Corporation, Motors terminated Cowans' income replacement benefits after 104 weeks because the insurer relied on an assessment that determined "suitable employment" was available for Cowans.
Wilson found that in making this determination, the insurer did not critically analyze the contents of a medical and vocational report prepared by Health Impact Multidisciplinary Assessment Centres.
The arbitrator noted Health Impact's report did not take into account several factors, including the absence of any apparent conflict of opinion among the medical assessors; the suggestion that Cowan was suited for a job requiring a "high school" education when his vocational tests showed him at Grade 3 or 4 levels; and the unlikelihood that Cowan would ever qualify for work in the upper income range targeted by the assessment.
Extrapolating on figures provided by Health Impact, Wilson found the assessment centre would have to have been doing roughly 10 assessments per work week, allowing a maximum of only four hours to process each assessment.
Since DACs no longer make a determination about disability, but rather insurers do (based on medical reports), insurers need to look at these assessments with a more critical view, Wilson found.
"In Motors' case, delegating the investigation, unsupervised, to what seems to have been an assessment mill, and merely reciting the summary of the assessment before terminating benefits was not ‘a reasonable and competent investigation,' Wilson found.
In making his decision, Financial Services Commission of Ontario (FSCO) arbitrator John Wilson highlighted what he saw as a problem endemic ever since the dissolution of the Designated Assessment Centres (DACs) in Ontario in 2006.
"To a degree...Mr. Cowans' claims bring into question the way Motors [Insurance Corporation] and perhaps other insurers deal with the determination of entitlement to benefits in a post-DAC world, and how the system of insurer's assessments that replace the DAC system fits into such determinations," Wilson wrote.
In Everliston Cowans and Motors Insurance Corporation, Motors terminated Cowans' income replacement benefits after 104 weeks because the insurer relied on an assessment that determined "suitable employment" was available for Cowans.
Wilson found that in making this determination, the insurer did not critically analyze the contents of a medical and vocational report prepared by Health Impact Multidisciplinary Assessment Centres.
The arbitrator noted Health Impact's report did not take into account several factors, including the absence of any apparent conflict of opinion among the medical assessors; the suggestion that Cowan was suited for a job requiring a "high school" education when his vocational tests showed him at Grade 3 or 4 levels; and the unlikelihood that Cowan would ever qualify for work in the upper income range targeted by the assessment.
Extrapolating on figures provided by Health Impact, Wilson found the assessment centre would have to have been doing roughly 10 assessments per work week, allowing a maximum of only four hours to process each assessment.
Since DACs no longer make a determination about disability, but rather insurers do (based on medical reports), insurers need to look at these assessments with a more critical view, Wilson found.
"In Motors' case, delegating the investigation, unsupervised, to what seems to have been an assessment mill, and merely reciting the summary of the assessment before terminating benefits was not ‘a reasonable and competent investigation,' Wilson found.
Bad faith no longer necessary for monetary awards for breach of Charter rights: Supreme Court of Canada
Bad faith is no longer a necessary requirement for awarding monetary damages for the breach of a Charter right following a recent Supreme Court of Canada decision, Blaney McMurtry LLP reported in its Insurance Observer.
In Vancouver (City) v Ward, a unanimous Supreme Court of Canada upheld a damages award for an unconstitutional strip search and vehicle seizure, absent bad faith on the part of the police, wrote Rafal Szymanski, a member of Blaney McMurty's insurance defence group, in the article Absense of Malice: Charter Damages Redefined.
In Ward, Vancouver police acted on a tip that an unknown individual planned to throw a pie at then Prime Minister Jean Chretien during a public appearance.
Ward was mistakenly identified as the suspect and arrested. In custody, police strip searched him, but did not as him to remove his underwear, not was he touched by the officers. His car was impounded, with the intention of obtaining a search warrant.
When it was determined that there were no grounds for a warrant and there was insufficient evidence to support a charge, he was released, wrote Szymanski.
Ward brought an action in tort and for breach of his Charter right. The lower court held that there was no tort liability, but that his section 8 Charter right to be free from unreasonable search and seizure had indeed been violated. Damage for the breach was set in the amount of $100 for the seizure of the car and $5,0000 for the strip search.
The Supreme Court of Canada confirmed the trial judge's award, deeming them to be "appropriate and just both from the perspective of the plaintiff and the defendant," wrote Szymanski.
"With Ward, the Supreme Court of Canada has provided plaintiffs with an avenue to prosecute government entities for monetary relief, even where such entities were not acting in bad faith," wrote Szymanski. "This will no doubt lead to an increase in litigation.
In Vancouver (City) v Ward, a unanimous Supreme Court of Canada upheld a damages award for an unconstitutional strip search and vehicle seizure, absent bad faith on the part of the police, wrote Rafal Szymanski, a member of Blaney McMurty's insurance defence group, in the article Absense of Malice: Charter Damages Redefined.
In Ward, Vancouver police acted on a tip that an unknown individual planned to throw a pie at then Prime Minister Jean Chretien during a public appearance.
Ward was mistakenly identified as the suspect and arrested. In custody, police strip searched him, but did not as him to remove his underwear, not was he touched by the officers. His car was impounded, with the intention of obtaining a search warrant.
When it was determined that there were no grounds for a warrant and there was insufficient evidence to support a charge, he was released, wrote Szymanski.
Ward brought an action in tort and for breach of his Charter right. The lower court held that there was no tort liability, but that his section 8 Charter right to be free from unreasonable search and seizure had indeed been violated. Damage for the breach was set in the amount of $100 for the seizure of the car and $5,0000 for the strip search.
The Supreme Court of Canada confirmed the trial judge's award, deeming them to be "appropriate and just both from the perspective of the plaintiff and the defendant," wrote Szymanski.
"With Ward, the Supreme Court of Canada has provided plaintiffs with an avenue to prosecute government entities for monetary relief, even where such entities were not acting in bad faith," wrote Szymanski. "This will no doubt lead to an increase in litigation.
Psychological and physical injuries cannot be combined to determine catastrophic impairment: Ontario Superior Court
Percentage determinations of psychological impairments cannot be added to percentage determinations of physical impairments to determine whether or not a person has suffered a whole person ‘catastrophic impairment' under the Statutory Accidents Benefits Schedule (SABS), the Ontario Superior Court of Justice has found.
S. 43, Clause 2(1.1)(f) of the SABS states a person has suffered a catastrophic injury if: "an impairment or combination of impairments...in accordance with the American Medical Association's Guides to the Evaluation of Permanent Impairment, 4th edition, 1993, results in 55 per cent or more impairment of the whole person."
Courts and arbitrators are frequently asked to combine percentage-based determinations of physical and psychological impairments to arrive at a conclusion that a person had met the 55% threshold of a catastrophic impairment.
But in Kusnierz v. The Economical Mutual Insurance Company, released on Oct. 19, 2010, the Ontario Superior Court says this type of combination of psychological and physical impairments cannot be done.
"I find that it is not permissible under the SABS to assign percentage values to mental and behavioural disorders under Chapter 14 of the Guides...and then combine them with the percentage values derived from impairments assessed under the other chapters of the Guides (referred to in clause 2(1.1)(f) of the SABS) in determining whether an individual meets the catastrophic impairment threshold of "55 per cent or more impairment of the whole person," Ontario Superior Court Justice Peter Lauwers wrote in his decision.
"I reach this conclusion for the following reasons, in a nutshell:
"(i) The Guides deliberately do not permit the mental and behavioural disorders in Chapter 14 to be assessed in percent terms and combined with the percentage values derived from impairments assessed under the other chapters of the Guides for the purpose of determining whole person impairment;
(ii) The structure of the SABS reinforces the bright line demarcation between mental and behavioural disorders referred to in Chapter 14 of the AMA Guides - specifically referred to in clause 2(1.1)(g) of the SABS - from the impairments assessed under the other chapters of the Guides which are referred to in clause 2(1.1)(f) of the SABS; and
(iii) This interpretation is consistent with the purpose of the specific provisions of Bill 59 and the SABS that this issue engages."
George Cooke, president and CEO of The Dominion of Canada General Insurance Company, praised the ruling during the Insurance Brokers Association of Ontario (IBAO)'s 90th Annual Convention in Niagara Falls. But it does seem likely, based on the importance of the ruling to the industry, that the decision will be appealed.
S. 43, Clause 2(1.1)(f) of the SABS states a person has suffered a catastrophic injury if: "an impairment or combination of impairments...in accordance with the American Medical Association's Guides to the Evaluation of Permanent Impairment, 4th edition, 1993, results in 55 per cent or more impairment of the whole person."
Courts and arbitrators are frequently asked to combine percentage-based determinations of physical and psychological impairments to arrive at a conclusion that a person had met the 55% threshold of a catastrophic impairment.
But in Kusnierz v. The Economical Mutual Insurance Company, released on Oct. 19, 2010, the Ontario Superior Court says this type of combination of psychological and physical impairments cannot be done.
"I find that it is not permissible under the SABS to assign percentage values to mental and behavioural disorders under Chapter 14 of the Guides...and then combine them with the percentage values derived from impairments assessed under the other chapters of the Guides (referred to in clause 2(1.1)(f) of the SABS) in determining whether an individual meets the catastrophic impairment threshold of "55 per cent or more impairment of the whole person," Ontario Superior Court Justice Peter Lauwers wrote in his decision.
"I reach this conclusion for the following reasons, in a nutshell:
"(i) The Guides deliberately do not permit the mental and behavioural disorders in Chapter 14 to be assessed in percent terms and combined with the percentage values derived from impairments assessed under the other chapters of the Guides for the purpose of determining whole person impairment;
(ii) The structure of the SABS reinforces the bright line demarcation between mental and behavioural disorders referred to in Chapter 14 of the AMA Guides - specifically referred to in clause 2(1.1)(g) of the SABS - from the impairments assessed under the other chapters of the Guides which are referred to in clause 2(1.1)(f) of the SABS; and
(iii) This interpretation is consistent with the purpose of the specific provisions of Bill 59 and the SABS that this issue engages."
George Cooke, president and CEO of The Dominion of Canada General Insurance Company, praised the ruling during the Insurance Brokers Association of Ontario (IBAO)'s 90th Annual Convention in Niagara Falls. But it does seem likely, based on the importance of the ruling to the industry, that the decision will be appealed.
Tuesday, October 19, 2010
FSCO lays out process for making arbitration decision public
The Financial Services Commission of Ontario (FSCO) has outlined a process that an insurer must follow when it makes public an arbitrator's decision regarding benefits in the company's dispute with another insurer.
In May 2010, FSCO announced that for accidents that occur on or after Sept. 1, 2010, insurers found by an arbitrator to be liable to pay benefits in disputes with other insurers would be required to make the arbitrator's decision public.
FSCO is establishing and will be making available a centralized database that includes decisions of all privately arbitrated disputes between insurers, pursuant to Ontario Regulation 283/95, a FSCO Auto Bulletin says.
Within 15 days of receipt of a decision from an arbitrator, the liable insurer is to provide FSCO with a copy of the decision in electronic format (Mircrosoft Word) and in PDF format (not scanned).
The electronic documents are to be accompanied by an electronic copy of the attached form of ‘Insurer Remittance Form for Disputes Between Insurers Arbitration Decisions.'
Insurers are to email the documents to DBIDecisions@fsco.gov.on.ca
FSCO adds that insurers are invited to forward appeal decisions to FSCO when they are received. "This will assist FSCO in ensuring that its database contains both decisions and appeal decisions for the convenience of interested parties."
In May 2010, FSCO announced that for accidents that occur on or after Sept. 1, 2010, insurers found by an arbitrator to be liable to pay benefits in disputes with other insurers would be required to make the arbitrator's decision public.
FSCO is establishing and will be making available a centralized database that includes decisions of all privately arbitrated disputes between insurers, pursuant to Ontario Regulation 283/95, a FSCO Auto Bulletin says.
Within 15 days of receipt of a decision from an arbitrator, the liable insurer is to provide FSCO with a copy of the decision in electronic format (Mircrosoft Word) and in PDF format (not scanned).
The electronic documents are to be accompanied by an electronic copy of the attached form of ‘Insurer Remittance Form for Disputes Between Insurers Arbitration Decisions.'
Insurers are to email the documents to DBIDecisions@fsco.gov.on.ca
FSCO adds that insurers are invited to forward appeal decisions to FSCO when they are received. "This will assist FSCO in ensuring that its database contains both decisions and appeal decisions for the convenience of interested parties."
Friday, October 15, 2010
Ontario court delves into the timing of threshold motions during jury trials
Ontario's courts seem to be in a quandary about the timing of hearing a threshold motion in a jury trial.
A threshold motion under s. 276.5(15) of the Insurance Act determines whether an auto injury is "serious or permanent."
The quandary is this: If the threshold motion is heard and decided before a jury renders a verdict, then it could be argued the jury's work is for naught. On the other hand, if the judge waits until the jury reaches a verdict on damages, will the jury's decision influence the judge's decision on the threshold motion?
In Clark v. Zigrossi, released in October 2010, Ontario Superior Court Justice David M. Brown argued in favour of refraining from hearing a threshold motion until the jury had returned with its verdict.
As it happened, the jury came back with a verdict of $5,000 in damages to the plaintiff, which was reduced to zero by the $15,000 deductible automatically subtracted from trial awards.
"I do not regard a threshold motion...as an opportunity to take an indirect run at the jury's verdict," Brown wrote.
"To decide a threshold motion before a jury returns with its verdict risks undermining the important role played by civil juries in this province," Brown wrote elsewhere in the reasons. "To decide a threshold motion before the jury delivers its verdict strikes me as inconsistent with such an exhortation [to the juries to approach their jobs with diligence and care] and as disrespectful of the place of juries in our civil trial system."
A threshold motion under s. 276.5(15) of the Insurance Act determines whether an auto injury is "serious or permanent."
The quandary is this: If the threshold motion is heard and decided before a jury renders a verdict, then it could be argued the jury's work is for naught. On the other hand, if the judge waits until the jury reaches a verdict on damages, will the jury's decision influence the judge's decision on the threshold motion?
In Clark v. Zigrossi, released in October 2010, Ontario Superior Court Justice David M. Brown argued in favour of refraining from hearing a threshold motion until the jury had returned with its verdict.
As it happened, the jury came back with a verdict of $5,000 in damages to the plaintiff, which was reduced to zero by the $15,000 deductible automatically subtracted from trial awards.
"I do not regard a threshold motion...as an opportunity to take an indirect run at the jury's verdict," Brown wrote.
"To decide a threshold motion before a jury returns with its verdict risks undermining the important role played by civil juries in this province," Brown wrote elsewhere in the reasons. "To decide a threshold motion before the jury delivers its verdict strikes me as inconsistent with such an exhortation [to the juries to approach their jobs with diligence and care] and as disrespectful of the place of juries in our civil trial system."
Tuesday, October 5, 2010
Cooperation among insurers is the key to fighting fraud: special investigator
Cooperation between insurers is the key to a successful automobile fraud investigation, according to Rick Muir, senior special investigator with Desjardins General Insurance Group, The Personal and Certas Direct Insurance Companies.
Right now, however, many insurers are going at it alone, worrying about implications of things such as the Personal Information Protection and Electronic Documents Act (PIPEDA), Muir told delegates at the Annual Toronto Fraud Forum on Sept. 29.
"Do like the police do, and combine forces," he advised the insurance industry. "We're fighting organized crime and we're standing alone.
"Don't be putting up barriers like PIPEDA in front of you. Do your job, nobody is going to touch you. Just know what you have in your hand."
Preserving evidence is also key, he added. This requires early recognition of a potential issue.
"Get your hands on those cars as quickly as you can - they are your dead body," Muir said, using an analogy drawn from his previous career in criminal investigations with the Ontario Provincial Province. "As a dead body decomposes, it is harder to put a case back together."
The same goes for cars, the longer you wait to review the evidence, the more likely repairs will have been made to the vehicle.
Always assess the evidence in totality, he cautioned.
It is essential to compare the accident reconstruction report with the forensic component, and then compare each with the witness and claimant statements.
"It should match," he said. "If it matches, they are telling you the truth. If it doesn't, you've got yourself a fraud. Deny it [the claim]."
Right now, however, many insurers are going at it alone, worrying about implications of things such as the Personal Information Protection and Electronic Documents Act (PIPEDA), Muir told delegates at the Annual Toronto Fraud Forum on Sept. 29.
"Do like the police do, and combine forces," he advised the insurance industry. "We're fighting organized crime and we're standing alone.
"Don't be putting up barriers like PIPEDA in front of you. Do your job, nobody is going to touch you. Just know what you have in your hand."
Preserving evidence is also key, he added. This requires early recognition of a potential issue.
"Get your hands on those cars as quickly as you can - they are your dead body," Muir said, using an analogy drawn from his previous career in criminal investigations with the Ontario Provincial Province. "As a dead body decomposes, it is harder to put a case back together."
The same goes for cars, the longer you wait to review the evidence, the more likely repairs will have been made to the vehicle.
Always assess the evidence in totality, he cautioned.
It is essential to compare the accident reconstruction report with the forensic component, and then compare each with the witness and claimant statements.
"It should match," he said. "If it matches, they are telling you the truth. If it doesn't, you've got yourself a fraud. Deny it [the claim]."
Insurers urged to get written conflict-of-interest statements from law firms and treatment/assessment facilities
Insurers wishing to expose potential insurance fraud should be getting written conflict-of-interest statements from legal, treatment and assessment facilities, a fraud investigator suggests.
Donna Ford, an insurance fraud investigator with Northwood & Associates, addressed the topic of insurance fruad at the Annual Toronto Fraud Forum on Sept. 29.
The Association of Certified Fraud Examiners and the Canadian Association of Special Investigation Units jointly sponsored the meeting.
In an email exchange following the forum, Ford observed that under the previous SABS, there was a conflict of interest disclosure section in the Treatment Plans (OCF 18 and 23). Although there is no such disclosure section on the forms under the new SABS, she wrote, there is still a requirement to disclose any conflict of interest to the insurer.
"If the insurer is noticing patterns of claimants going to the same combination of legal representatives, treatment facilities or assessment facilities, I suggest the insurer write to all three and ask if there is any conflict of interest," Ford writes.
Those letters should be produced at arbitration and trial, especially if there is no response, Ford said.
Insurers should also provide this information to the Investigation Services Division (ISD) of the Insurance Bureau of Canada (IBC) to investigate any undisclosed conflicts.
"We all know that conflicts lead to over-treatment and over-billing."
Donna Ford, an insurance fraud investigator with Northwood & Associates, addressed the topic of insurance fruad at the Annual Toronto Fraud Forum on Sept. 29.
The Association of Certified Fraud Examiners and the Canadian Association of Special Investigation Units jointly sponsored the meeting.
In an email exchange following the forum, Ford observed that under the previous SABS, there was a conflict of interest disclosure section in the Treatment Plans (OCF 18 and 23). Although there is no such disclosure section on the forms under the new SABS, she wrote, there is still a requirement to disclose any conflict of interest to the insurer.
"If the insurer is noticing patterns of claimants going to the same combination of legal representatives, treatment facilities or assessment facilities, I suggest the insurer write to all three and ask if there is any conflict of interest," Ford writes.
Those letters should be produced at arbitration and trial, especially if there is no response, Ford said.
Insurers should also provide this information to the Investigation Services Division (ISD) of the Insurance Bureau of Canada (IBC) to investigate any undisclosed conflicts.
"We all know that conflicts lead to over-treatment and over-billing."
Monday, September 6, 2010
Vast majority of Ontario drivers lack knowledge of reforms: RSA Canada
Nearly 70% of Ontario drivers do not understand the impending auto insurance reforms or how the reforms will affect their auto insurance coverage, according to a survey commissioned by RSA Canada.
Leger Marketing was commissioned to conduct the RSA Canada Automobile Insurance survey. In the survey 1,524 Canadian adults were polled. Of these respondents, 625 resided in Ontario.
The reforms, which will take effect Sept. 1, 2010, reduce the standard coverage offered to drivers, but with the option to purchase enhanced benefits.
Only two per cent of Ontario drivers surveyed by Leger have a confident grasp on the legislation and its effect on costs.
"These statistics show there is a real opportunity for brokers to educate drivers on the host of improvements the auto reforms will bring," said Irene Bianchi, RSA's vice president of claims and corporate services.
Leger Marketing was commissioned to conduct the RSA Canada Automobile Insurance survey. In the survey 1,524 Canadian adults were polled. Of these respondents, 625 resided in Ontario.
The reforms, which will take effect Sept. 1, 2010, reduce the standard coverage offered to drivers, but with the option to purchase enhanced benefits.
Only two per cent of Ontario drivers surveyed by Leger have a confident grasp on the legislation and its effect on costs.
"These statistics show there is a real opportunity for brokers to educate drivers on the host of improvements the auto reforms will bring," said Irene Bianchi, RSA's vice president of claims and corporate services.
"Formal application" for accident benefits not necessary: Ontario Court of Appeal
If a claimant has not submitted an OCF-1 form (Application for Accident Benefits) to an insurer, it does not automatically disqualify them from being considered to have provided a completed application for accident benefits, Ontario's Court of Appeal ruled.
Four people travelling in a car were injured in a car accident in 2006. Francisco Quintera was the driver at the time of the accident. The car was allegedly insured by TD Insurance Meloche Monnex, but TD maintains it had terminated the policy prior to the accident.
The other car in the collision was insured by ING.
Ten months after the accident, ING received four OCF-23 forms (Pre-approved Framework Treatment Confirmation Form) from a chiropractor, one for each claimant riding in the Quintera car at the time of the accident. The forms included the names and addresses of each of the claimants, along with a brief description of the nature of the injuries each had sustained in the accident.
By July 2007, ING was unable to contact any of the four claimants, and had not received a completed OCF-1 form from any of the claimants so denied benefits and closed the file.
Shortly thereafter, TD received four OCF-1 forms from the claimants' representative, GM Accident Claims & Dispute Resolution Specialists.
Neither insurer adjusted the files or paid benefits. ING and TD disagreed about which had been the first insurer to receive a completed application for accident benefits within the meaning of s. 2 of the Insurance Act.
In arbitration, it was determined that ING's receipt of the forms from the chiropractor constituted the receipt of "completed application for benefits" within the meaning of s. 2.
ING's application to the Superior Court to have the determination set aside was dismissed, and the Court of Appeal also upheld the arbitrator's decision.
The arbitrator stated that a person "need not provide a formal application to an insurance company to be deemed to have provided a completed application for accident benefits," the Court of Appeal decision says.
"A person need only provide sufficient particulars to an insurance company so as to reasonably assist the insurer with the processing of the application and the assessment of the claim."
The OCF-23 forms submitted by the chiropractor, even though they are not OCF-1 forms, met the test, ruled the arbitrator.
"Accordingly, I would dismiss the appeal with costs to the respondent fixed at $8,000, inclusive of disbursements and applicable taxes," wrote the panel of Court of Appeal judges.
Four people travelling in a car were injured in a car accident in 2006. Francisco Quintera was the driver at the time of the accident. The car was allegedly insured by TD Insurance Meloche Monnex, but TD maintains it had terminated the policy prior to the accident.
The other car in the collision was insured by ING.
Ten months after the accident, ING received four OCF-23 forms (Pre-approved Framework Treatment Confirmation Form) from a chiropractor, one for each claimant riding in the Quintera car at the time of the accident. The forms included the names and addresses of each of the claimants, along with a brief description of the nature of the injuries each had sustained in the accident.
By July 2007, ING was unable to contact any of the four claimants, and had not received a completed OCF-1 form from any of the claimants so denied benefits and closed the file.
Shortly thereafter, TD received four OCF-1 forms from the claimants' representative, GM Accident Claims & Dispute Resolution Specialists.
Neither insurer adjusted the files or paid benefits. ING and TD disagreed about which had been the first insurer to receive a completed application for accident benefits within the meaning of s. 2 of the Insurance Act.
In arbitration, it was determined that ING's receipt of the forms from the chiropractor constituted the receipt of "completed application for benefits" within the meaning of s. 2.
ING's application to the Superior Court to have the determination set aside was dismissed, and the Court of Appeal also upheld the arbitrator's decision.
The arbitrator stated that a person "need not provide a formal application to an insurance company to be deemed to have provided a completed application for accident benefits," the Court of Appeal decision says.
"A person need only provide sufficient particulars to an insurance company so as to reasonably assist the insurer with the processing of the application and the assessment of the claim."
The OCF-23 forms submitted by the chiropractor, even though they are not OCF-1 forms, met the test, ruled the arbitrator.
"Accordingly, I would dismiss the appeal with costs to the respondent fixed at $8,000, inclusive of disbursements and applicable taxes," wrote the panel of Court of Appeal judges.
Monday, August 30, 2010
MPI files suit against "chronic" teenage car thieves
Manitoba Public Insurance has filed a lawsuit against a pair of teenage "chronic" car thieves, dubbed ‘Bonnie and Clyde' by some local justice officials and media.
The suit is a $53,000 statement of claim against a 16-year-old girl and an 18-year-old boy, stemming from an alleged spree of car thefts and vandalism, said MPI spokesperson Brian Smiley.
MPI is seeking to recover the money from the teens for damage they allegedly caused to six different trucks and SUVs stolen in Manitoba in 2009, according to the Vancouver Sun.
The duo recently garnered media attention because of the brazen and shocking nature of their alleged crimes. The pair videotaped their actions, which included vehicle thefts, drinking and driving, and performing lewd acts on the stolen vehicles, the Winnipeg Free Press reported.
In August 2010, the 16-year-old pleaded guilty to 21 charges stemming from a 30-day crime spree that spanned across rural Manitoba, Saskatchewan and Alberta, in the summer of 2009, reports the Winnipeg Free Press.
"Some of the crimes included burning a Hummer they stole just outside Winnipeg, nearly mowing down a vehicle owner who tried to interrupt a theft in eastern Saskatchewan and scrawling lyrics to a crude rap song over the interior of another car they left behind to be found by the police," reported the Winnipeg Free Press. This 30-day spree across the Prairies is separate from the spree MPI is seeking to recover damages from, Smiley noted.
The suit is a $53,000 statement of claim against a 16-year-old girl and an 18-year-old boy, stemming from an alleged spree of car thefts and vandalism, said MPI spokesperson Brian Smiley.
MPI is seeking to recover the money from the teens for damage they allegedly caused to six different trucks and SUVs stolen in Manitoba in 2009, according to the Vancouver Sun.
The duo recently garnered media attention because of the brazen and shocking nature of their alleged crimes. The pair videotaped their actions, which included vehicle thefts, drinking and driving, and performing lewd acts on the stolen vehicles, the Winnipeg Free Press reported.
In August 2010, the 16-year-old pleaded guilty to 21 charges stemming from a 30-day crime spree that spanned across rural Manitoba, Saskatchewan and Alberta, in the summer of 2009, reports the Winnipeg Free Press.
"Some of the crimes included burning a Hummer they stole just outside Winnipeg, nearly mowing down a vehicle owner who tried to interrupt a theft in eastern Saskatchewan and scrawling lyrics to a crude rap song over the interior of another car they left behind to be found by the police," reported the Winnipeg Free Press. This 30-day spree across the Prairies is separate from the spree MPI is seeking to recover damages from, Smiley noted.
Tuesday, August 24, 2010
CRTC refuses insurance brokers exemption to unsolicited telemarketing rules
The Canadian Radio and Telecommunications Commission (CRTC) decided its unsolicited telemarketing rules apply equally to insurance agents and brokers and investment and financial advisors.
The commission's Unsolicited Telecommunications Rules include the National Do Not Call List and the Automatic Dialing-Announcing Device (ADAD) Rules.
Previously, the rules did not apply to investment or financial advisors - a point of contention for brokers. The commission re-evaluated this distinction in March, and in its recent decision has ruled that rather than granting an exemption to those in the insurance industry, it would instead apply the rules to those in the financial industry as well.
The commission noted that while parties from both industries have a duty and obligation to communicate with clients in certain circumstances, there "is no obligation to do so exclusively by telephone," it said in its decision.
"Furthermore, the commission notes that there is no evidence on the record of this proceeding that investment or financial advisors and insurance agents or brokers have an obligation to communicate with their clients in a manner that would violate the Telemarketing Rules or the Automatic Dialing-Announcing Device Rules (ADAD) - for example, calling outside calling hours, not identifying themselves during the call, and not accepting do not call requests from their clients."
It went on to note that every other industry is subject to the rules when making unsolicited calls to sell or promote products or services, and as such, "there is no compelling reason, policy or otherwise, for the financial and insurance industries to be subject to a different application of the Telemarketing Rules and the ADAD Rules."
The commission's Unsolicited Telecommunications Rules include the National Do Not Call List and the Automatic Dialing-Announcing Device (ADAD) Rules.
Previously, the rules did not apply to investment or financial advisors - a point of contention for brokers. The commission re-evaluated this distinction in March, and in its recent decision has ruled that rather than granting an exemption to those in the insurance industry, it would instead apply the rules to those in the financial industry as well.
The commission noted that while parties from both industries have a duty and obligation to communicate with clients in certain circumstances, there "is no obligation to do so exclusively by telephone," it said in its decision.
"Furthermore, the commission notes that there is no evidence on the record of this proceeding that investment or financial advisors and insurance agents or brokers have an obligation to communicate with their clients in a manner that would violate the Telemarketing Rules or the Automatic Dialing-Announcing Device Rules (ADAD) - for example, calling outside calling hours, not identifying themselves during the call, and not accepting do not call requests from their clients."
It went on to note that every other industry is subject to the rules when making unsolicited calls to sell or promote products or services, and as such, "there is no compelling reason, policy or otherwise, for the financial and insurance industries to be subject to a different application of the Telemarketing Rules and the ADAD Rules."
Tuesday, August 17, 2010
Auto insurance fraud ring in Manitoba draws organized crime charges
Winnipeg police have laid criminal organization charges as part of its ongoing investigation into an auto insurance fraud ring.
According to the Winnipeg Sun, this is the first time an auto insurance fraud investigation is believed to have resulted in organized crime charges.
In August 2009, a series of arrests were made as a result of a joint investigation between Winnipeg Police Services and Manitoba Public Insurance dubbed ‘Project Rollback.'
"After nearly a year of reviewing evidence, and in consultation with a Crown Attorney, it was determined that additional charges were warranted," a Winnipeg Police Services release says.
Three individuals have received additional charges of:
• participating in a criminal organization; and
• commission of an offence for a criminal organization.
The joint investigation identified an auto fraud scheme that involved odometer rollbacks, sale document manipulation and staged incidents including staged collisions, hit-and-run collisions and false stolen vehicle reports.
As a result of the fraud ring, participants are alleged to have received inflated MPI claim payouts in excess of fair market value and defrauded the insurer of roughly $800,000, according to police.
According to the Winnipeg Sun, this is the first time an auto insurance fraud investigation is believed to have resulted in organized crime charges.
In August 2009, a series of arrests were made as a result of a joint investigation between Winnipeg Police Services and Manitoba Public Insurance dubbed ‘Project Rollback.'
"After nearly a year of reviewing evidence, and in consultation with a Crown Attorney, it was determined that additional charges were warranted," a Winnipeg Police Services release says.
Three individuals have received additional charges of:
• participating in a criminal organization; and
• commission of an offence for a criminal organization.
The joint investigation identified an auto fraud scheme that involved odometer rollbacks, sale document manipulation and staged incidents including staged collisions, hit-and-run collisions and false stolen vehicle reports.
As a result of the fraud ring, participants are alleged to have received inflated MPI claim payouts in excess of fair market value and defrauded the insurer of roughly $800,000, according to police.
Tuesday, August 3, 2010
TorQuest makes "significant" equity investment in SCM Insurance Services
TorQuest Partners, a Canadian-based manager of private equity funds, has made what it calls a "significant equity investment" in SCM Insurance Services (SCM).
The exact amount of the investment was not disclosed.
TorQuest Partners has more than $700 million of equity capital under management. It has made a number of previous investments in the insurance and insurance services industries, including the creation of a limited partnership in early January 2007 that now operates under the name of FirstOnSite Restoration LP.
SCM is an independent, privately owned provider of claims management, risk management and related services in Canada. It has more than 110 offices nationally, with more than 1,400 employees.
"TorQuest's investment in SCM is a strong endorsement of our strategy, people and potential," SCM said in a joint press release. "We see this as an exciting opportunity for growth and, in conjunction with the great team and client base we already have, this partnership will prove to enhance our strategic positioning both nationally and internationally.
"It's also important to note that our management team will continue to hold a sizable equity stake in the company. The leadership and operations of SCM Insurance Services,
ClaimsPro, Forensic Investigations Canada and SCM Risk Management Services will remain unchanged."
SCM also notes the national launch of iClarify, its proprietary insurance-to-value (ITV) solution, will continue on schedule.
The exact amount of the investment was not disclosed.
TorQuest Partners has more than $700 million of equity capital under management. It has made a number of previous investments in the insurance and insurance services industries, including the creation of a limited partnership in early January 2007 that now operates under the name of FirstOnSite Restoration LP.
SCM is an independent, privately owned provider of claims management, risk management and related services in Canada. It has more than 110 offices nationally, with more than 1,400 employees.
"TorQuest's investment in SCM is a strong endorsement of our strategy, people and potential," SCM said in a joint press release. "We see this as an exciting opportunity for growth and, in conjunction with the great team and client base we already have, this partnership will prove to enhance our strategic positioning both nationally and internationally.
"It's also important to note that our management team will continue to hold a sizable equity stake in the company. The leadership and operations of SCM Insurance Services,
ClaimsPro, Forensic Investigations Canada and SCM Risk Management Services will remain unchanged."
SCM also notes the national launch of iClarify, its proprietary insurance-to-value (ITV) solution, will continue on schedule.
Police action, legislation required to combat insurance fraud: RBC Insurance roundtable
Police action and legislative changes are required to effect stronger penalties for insurance fraud, an RBC Insurance media roundtable concluded on July 28.
Insurance fraud cost the Ontario auto insurance industry about $1.3 billion (out of about $9 billion in collected premium), according to background materials prepared for the conference. The materials cited Insurance Bureau of Canada statistics.
"There is no legislation or fraud bureau in place to combat insurance fraud," the RBC Insurance background materials note. "Jail sentences are uncommon for those who are caught committing insurance fraud."
In her presentation notes, Cathy Honor, president of RBC General Insurance Company, suggested regulators could also do more to help combat insurance fraud by requiring the accreditation of medical clinics.
RBC Insurance reviewed seven accident benefits claims from both 2004 and 2009. All claims occurred in the Greater Toronto Area (GTA) and all involved similar diagnoses including soft tissue injuries, whiplash and psychological factors.
While the average cost of repairing the vehicle hovered at just under $4,000 for the claims occurring in both 2004 and 2009, the average medical assessment cost skyrocketed from just below $4,000 for the 2004 claims to well above $10,000 for the 2009 claims.
Insurance fraud cost the Ontario auto insurance industry about $1.3 billion (out of about $9 billion in collected premium), according to background materials prepared for the conference. The materials cited Insurance Bureau of Canada statistics.
"There is no legislation or fraud bureau in place to combat insurance fraud," the RBC Insurance background materials note. "Jail sentences are uncommon for those who are caught committing insurance fraud."
In her presentation notes, Cathy Honor, president of RBC General Insurance Company, suggested regulators could also do more to help combat insurance fraud by requiring the accreditation of medical clinics.
RBC Insurance reviewed seven accident benefits claims from both 2004 and 2009. All claims occurred in the Greater Toronto Area (GTA) and all involved similar diagnoses including soft tissue injuries, whiplash and psychological factors.
While the average cost of repairing the vehicle hovered at just under $4,000 for the claims occurring in both 2004 and 2009, the average medical assessment cost skyrocketed from just below $4,000 for the 2004 claims to well above $10,000 for the 2009 claims.
Tuesday, July 13, 2010
IBAO warns brokers of increase in cheque fraud activity
Insurance Brokers Association of Ontario (IBAO) is warning brokerages to be on high alert in light of several recent reports of cheque fraud.
The incidents reported seem to have a common thread, an IBAO release says. They occur when the brokerage is shipping a payment to an external payee using window envelopes.
Another pattern is that the payee will notify the brokerage the payment did not arrive, and yet the brokerage's banking records show the debit transaction was completed.
IBAO suggests undertaking the following steps to prevent such incidents:
• do not use window envelopes to ship cheque payments;
• ensure cheques have serial numbers on the electronic codeline (commonly referred to as MICR);
• reconcile accounts on a daily basis and consider using electronic services available from your financial institution to assist;
• consider using electronic fund transfers instead of cheques;
• implement physical security by properly securing and restricting access to any computers used to issue cheques, especially ones with electronic signatures; and
• cheques, cheque order forms and articles of incorporation should be treated as carefully as cash and kept locked up with restricted access.
The incidents reported seem to have a common thread, an IBAO release says. They occur when the brokerage is shipping a payment to an external payee using window envelopes.
Another pattern is that the payee will notify the brokerage the payment did not arrive, and yet the brokerage's banking records show the debit transaction was completed.
IBAO suggests undertaking the following steps to prevent such incidents:
• do not use window envelopes to ship cheque payments;
• ensure cheques have serial numbers on the electronic codeline (commonly referred to as MICR);
• reconcile accounts on a daily basis and consider using electronic services available from your financial institution to assist;
• consider using electronic fund transfers instead of cheques;
• implement physical security by properly securing and restricting access to any computers used to issue cheques, especially ones with electronic signatures; and
• cheques, cheque order forms and articles of incorporation should be treated as carefully as cash and kept locked up with restricted access.
Tuesday, July 6, 2010
MPI investigations saved more than $9 million in 2009
Manitoba Public Insurance (MPI)'s special investigations unit saved approximately $9.3 million in 2009.
The division investigated roughly 2,750 suspicious claims, including bodily injury, hit and run, auto theft, vandalism, suspected staged accidents or other forms of auto insurance fraud.
Of the more than $9 million saved, approximately $2 million was the result of successful fire investigations.
Investigators were able to determine that many of the 250 investigated vehicle fires were a result of either arson or faulty mechanical repairs.
"Our fire investigators can determine if a fire was the result of arson," Tim Arnason, MPI's director of SIU, said in a release. "Where evidence proves owner involvement, the claim would be denied based on the conclusive findings.
"In other cases where causation of fires is attributed to faulty mechanical repairs, the corporation will seek recovery from the person or business responsible."
The division investigated roughly 2,750 suspicious claims, including bodily injury, hit and run, auto theft, vandalism, suspected staged accidents or other forms of auto insurance fraud.
Of the more than $9 million saved, approximately $2 million was the result of successful fire investigations.
Investigators were able to determine that many of the 250 investigated vehicle fires were a result of either arson or faulty mechanical repairs.
"Our fire investigators can determine if a fire was the result of arson," Tim Arnason, MPI's director of SIU, said in a release. "Where evidence proves owner involvement, the claim would be denied based on the conclusive findings.
"In other cases where causation of fires is attributed to faulty mechanical repairs, the corporation will seek recovery from the person or business responsible."
Ontario broker's license revoked for serving clients unknown to her brokerage
Ontario's broker regulator has revoked the broker's license of Careen Edwards for a history of serving clients of whom her brokerage was unaware.
Registered Brokers of Ontario (RIBO) began investigating Edwards after a client walked into the office where she worked to report an accident. The brokerage had no record of the person being a client.
The client told RIBO she paid Edwards $4,000 in cash for auto insurance, but did not receive a receipt for the payment. The insurer had no record of the client.
Edwards was placed on paid leave in July 2009 while the brokerage conducted an internal audit.
"On July 15, 2009 Ms. Edwards' employment with the brokerage was terminated after they were able to access Ms. Edwards's computer terminal and discovered that there [were] binder letters sent out to leasing companies binding coverage on several vehicles and there were also certificates of insurance that had been produced for the several individuals where there were no corresponding applications," RIBO notes in the ‘Discipline Digest' section of its Summer 2010 newsletter. "Checking with the various insurance companies only confirmed that the individuals did not have valid insurance nor were they clients of the brokerage."
Registered Brokers of Ontario (RIBO) began investigating Edwards after a client walked into the office where she worked to report an accident. The brokerage had no record of the person being a client.
The client told RIBO she paid Edwards $4,000 in cash for auto insurance, but did not receive a receipt for the payment. The insurer had no record of the client.
Edwards was placed on paid leave in July 2009 while the brokerage conducted an internal audit.
"On July 15, 2009 Ms. Edwards' employment with the brokerage was terminated after they were able to access Ms. Edwards's computer terminal and discovered that there [were] binder letters sent out to leasing companies binding coverage on several vehicles and there were also certificates of insurance that had been produced for the several individuals where there were no corresponding applications," RIBO notes in the ‘Discipline Digest' section of its Summer 2010 newsletter. "Checking with the various insurance companies only confirmed that the individuals did not have valid insurance nor were they clients of the brokerage."
Wednesday, June 30, 2010
Data Breach? Protecting Customers, and Yourself
The insurance industry has seen its share of data breaches in recent years. But insurers aren’t the only ones at risk. All businesses and risk managers should also have data breach processes in place–those that prevent and respond to either a hacker or an internal breach, according to risk management and security experts.
Last year, both the Insurance Corporation of British Columbia (ICBC) and credit union Coast Capital revisited their practices after policyholder information ended up in the wrong hands. Preparing for, and responding to such breaches means having two strategies in place, say experts sharing data breach best practices in a June 24 podcast.
Planning: prevention & response
Organizations need a prevention plan first. That means naming a specific senior manager to take charge if a breach occurs, pre-selecting a forensic computer specialist, managing communications to the media and stakeholders and pre-negotiating services with credit monitoring services
But the response is crucial–a crisis response team should be ready to respond immediately,
Their first job: have the forensics experts determine how big–or severe–the breach is. Getting that “snapshot” of the breach can figure out what servers were impacted, when and where the breach took place, and what processes were (or weren’t) in place at the time, says Mark Greisinger, president of NetDiligence.
That snapshot will identify the kind of data that’s at risk and also help direct the company response, says Toby Merrrill, vice president of ACE Professional Risk. “A breach of 10 or 20 credit cards should be treated differently than the theft of thousands of social [insurance] numbers.”
Next, the legal members of the team should determine who should be notified. Then crisis management consultants should advise on the best way to communicate the breach.
Best practices
Organizations should keep their notifications simple, says John Mullen, an attorney at Nelson, Levine, DeLuca & Horst. “A clear company statement should let them know key facts–what’s been done to contain the breach and the timeframe, and that appropriate action is being taken,” he advises.”It’s always best to tell your story upfront.” In giving the basic facts, companies should show empathy to those affected, and accept the responsibility “taking care not to admit negligence,” he says.
They can also extend help in the form of free credit checks, he adds.
Most organizations make missteps in the wake of data breaches because they aren’t prepared. “Without a crisis response plan in place, they make rash decisions,”notes Merrill.
A sound preparedness plan should take into account a company’s culture, have its senior management on board, and should include a screening process for third-party advisors or consultants. Organizations should also carefully consider what they tell stakeholders–”there’s a tendency to over-notify,” says Merrill
But even if companies aren’t required to notify stakeholders–they may be better off in doing so to protect their reputation and really ensure customer protection he points out.
“A breach of email addresses may not seem important, but can be used by a hacker to get more sensitive information.”
Last year, both the Insurance Corporation of British Columbia (ICBC) and credit union Coast Capital revisited their practices after policyholder information ended up in the wrong hands. Preparing for, and responding to such breaches means having two strategies in place, say experts sharing data breach best practices in a June 24 podcast.
Planning: prevention & response
Organizations need a prevention plan first. That means naming a specific senior manager to take charge if a breach occurs, pre-selecting a forensic computer specialist, managing communications to the media and stakeholders and pre-negotiating services with credit monitoring services
But the response is crucial–a crisis response team should be ready to respond immediately,
Their first job: have the forensics experts determine how big–or severe–the breach is. Getting that “snapshot” of the breach can figure out what servers were impacted, when and where the breach took place, and what processes were (or weren’t) in place at the time, says Mark Greisinger, president of NetDiligence.
That snapshot will identify the kind of data that’s at risk and also help direct the company response, says Toby Merrrill, vice president of ACE Professional Risk. “A breach of 10 or 20 credit cards should be treated differently than the theft of thousands of social [insurance] numbers.”
Next, the legal members of the team should determine who should be notified. Then crisis management consultants should advise on the best way to communicate the breach.
Best practices
Organizations should keep their notifications simple, says John Mullen, an attorney at Nelson, Levine, DeLuca & Horst. “A clear company statement should let them know key facts–what’s been done to contain the breach and the timeframe, and that appropriate action is being taken,” he advises.”It’s always best to tell your story upfront.” In giving the basic facts, companies should show empathy to those affected, and accept the responsibility “taking care not to admit negligence,” he says.
They can also extend help in the form of free credit checks, he adds.
Most organizations make missteps in the wake of data breaches because they aren’t prepared. “Without a crisis response plan in place, they make rash decisions,”notes Merrill.
A sound preparedness plan should take into account a company’s culture, have its senior management on board, and should include a screening process for third-party advisors or consultants. Organizations should also carefully consider what they tell stakeholders–”there’s a tendency to over-notify,” says Merrill
But even if companies aren’t required to notify stakeholders–they may be better off in doing so to protect their reputation and really ensure customer protection he points out.
“A breach of email addresses may not seem important, but can be used by a hacker to get more sensitive information.”
Tuesday, June 29, 2010
Ontario regulator to create delivery standards for auto injury medical assessors
Developing industry-wide delivery standards for third-party medical examinations and standards for training and experience of assessors in auto-related injury claims are among the Financial Services Commission of Ontario (FSCO)'s top priorities for 2010.
In its 2010 Statement of Priorities, FSCO says it will be taking the following initiatives, among others, to support automobile insurance reform:
• in conjunction with health care providers and the insurance industry, develop industry-wide delivery standards for third-party medical examinations and qualifications for assessors;
• appoint a panel of experts to recommend changes to the definition of catastrophic impairment in the Statutory Accident Benefits Schedule (SABS) and develop minimum standards for the training and experience required for assessors of catastrophic impairment.
• conduct a study of closed automobile insurance claims to understand the factors contributing to cost changes and create an up-to-date framework for projecting the impact of auto insurance product design or system changes; and
• using the findings published in 2008 by the World Health Organization's Neck Pain Task Force to expand the Minor Injury Guideline to provide a more comprehensive continuum of care for those injured in auto accidents.
In a report on key initiatives of 2009, FSCO also said it had established a protocol for the processing and payment of SABS claims by the Motor Vehicle Accident Claim Fund and subsequent recovery of MVACF costs from the auto insurance industry in the event of an insolvent insurer.
"The protocol will help to ensure compensation
In its 2010 Statement of Priorities, FSCO says it will be taking the following initiatives, among others, to support automobile insurance reform:
• in conjunction with health care providers and the insurance industry, develop industry-wide delivery standards for third-party medical examinations and qualifications for assessors;
• appoint a panel of experts to recommend changes to the definition of catastrophic impairment in the Statutory Accident Benefits Schedule (SABS) and develop minimum standards for the training and experience required for assessors of catastrophic impairment.
• conduct a study of closed automobile insurance claims to understand the factors contributing to cost changes and create an up-to-date framework for projecting the impact of auto insurance product design or system changes; and
• using the findings published in 2008 by the World Health Organization's Neck Pain Task Force to expand the Minor Injury Guideline to provide a more comprehensive continuum of care for those injured in auto accidents.
In a report on key initiatives of 2009, FSCO also said it had established a protocol for the processing and payment of SABS claims by the Motor Vehicle Accident Claim Fund and subsequent recovery of MVACF costs from the auto insurance industry in the event of an insolvent insurer.
"The protocol will help to ensure compensation
Toronto businesses clean-up, check policy coverage in wake of G20 vandalism
As the City of Toronto settles down to tally the final damages caused by vandals and looters during the G20 summit on June 26-27, the Insurance Bureau of Canada (IBC) has posted general information about personal and commercial policy coverage related to the G20 event on its Web site.
The Web site notes, "the damage caused by the vandalism would generally be covered [under commercial property insurance], but loss of business income would only be covered under a business income policy."
Insurance coverage for business income is generally purchased separately from insurance on the commercial property.
There may be coverage under a commercial business income policy if a business is forced to close because of damage to neighbouring properties as a result of any perils listed in the policy.
Otherwise, the commercial business income policy requires that there be damage to the commercial policyholder's own business in order to trigger a payment due to income loss because of the business interruption.
IBC notes its information is only general in nature and directs insureds to consult their specific policies. The IBC information is available at: http://www.ibc.ca/en/G20.asp
Also, IBC points out that while the federal government is not legally bound to pay compensation for losses suffered as a result of international meetings held in Canada, the government does have information related to guidelines related to such compensation.
The information is on the Web site of the Department of Foreign Affairs and International Trade at: http://www.ibc.ca/en/G20.asp
The Web site notes, "the damage caused by the vandalism would generally be covered [under commercial property insurance], but loss of business income would only be covered under a business income policy."
Insurance coverage for business income is generally purchased separately from insurance on the commercial property.
There may be coverage under a commercial business income policy if a business is forced to close because of damage to neighbouring properties as a result of any perils listed in the policy.
Otherwise, the commercial business income policy requires that there be damage to the commercial policyholder's own business in order to trigger a payment due to income loss because of the business interruption.
IBC notes its information is only general in nature and directs insureds to consult their specific policies. The IBC information is available at: http://www.ibc.ca/en/G20.asp
Also, IBC points out that while the federal government is not legally bound to pay compensation for losses suffered as a result of international meetings held in Canada, the government does have information related to guidelines related to such compensation.
The information is on the Web site of the Department of Foreign Affairs and International Trade at: http://www.ibc.ca/en/G20.asp
Saturday, June 26, 2010
Manitoba man pays steep price for attempted $240 insurance fraud
A Winnipeg man was sentenced to 15 months' probation, perform 120 community service hours within one year, pay full restitution and write a letter of apology to Manitoba Public Insurance (MPI)'s CEO for attempting to commit a $240 insurance fraud.
Brent Disbrowe-Bear pleaded guilty to falsely reporting that his vehicle was struck by another motor vehicle while parked in a stall at his apartment complex.
There was damage to the passenger front bumper.
According to MPI's Special Investigation Unit, a witness saw a vehicle collide with a snowbank and stop sign; the licence plate matched that of Disbrowe-Bear's vehicle.
MPI confirmed the damage to Disbrowe-Bear's vehicle was consistent with the witness account.
Brent Disbrowe-Bear pleaded guilty to falsely reporting that his vehicle was struck by another motor vehicle while parked in a stall at his apartment complex.
There was damage to the passenger front bumper.
According to MPI's Special Investigation Unit, a witness saw a vehicle collide with a snowbank and stop sign; the licence plate matched that of Disbrowe-Bear's vehicle.
MPI confirmed the damage to Disbrowe-Bear's vehicle was consistent with the witness account.
Ontario Court of Appeal reinstates statute-barred auto injury claim
The Ontario Court of Appeal has breathed new life into an auto injury claim that was defeated in a summary judgment because it was filed 14 months after the limitations period had expired.
The Appeal Court reinstated the action on the basis that the motion judge that dismissed the matter failed to consider the $15,000 statutory deductible from general damages as a factor in the discoverability of the claim.
In Antonia (Tami) Everding and Ljutvo Skrijel, Everding was the front-seat passenger in a low-speed collision in May 2000. She experienced immediate pain and underwent various post-accident therapies.
She consulted a lawyer in May 2001. She was then advised that for a soft-tissue injury, she had no case unless there was some visible or objective injury.
Everding's family doctor advised her in May 2004 that she suffered from a chronic pain condition.
An MRI scan was recommended in September 2005. Conducted in May 2006, the MRI revealed a disc bulge at two locations.
The MRI provided objective proof she had a permanent injury that might have exceeded the $15,000 statutory deductible. She consulted her lawyers, who then launched her claim in 2007.
The defendant moved for summary judgment to dismiss the case, arguing the claim was statute-barred as of May 2006. The defendant said the plaintiff knew or ought to have known that she had a valid claim when she was diagnosed with chronic pain in May 2004.
The lower court agreed, but the Appeal Court said the motions judge should have considered first whether the claim would have exceeded the $15,000 threshold.
Counsel for the defendant argued the issue of whether or not the claim would have exceeded the $15,000 deductible "should not be considered a condition precedent to the discoverability of a claim that is potentially significant enough" to override the limitations spelled out in the Insurance Act.
"I reject this submission," Ontario Court of Appeal Justice Kathryn Feldman wrote for the court. Feldman cited with approval the Ontario Superior Court decision in Voisin v. Hartin:
"The rationale underlying the discoverability principle is that the law ought not to preclude an action before a person is able to sue on it. In my view, this rationale requires me to take into account the effect of the $10,000 [now $15,000] requirement.
"It would be fundamentally unfair to require the plaintiff to bring an action in which he could not expect to recover anything because his claim could not surpass the $10,000 exemption.
The Appeal Court reinstated the action on the basis that the motion judge that dismissed the matter failed to consider the $15,000 statutory deductible from general damages as a factor in the discoverability of the claim.
In Antonia (Tami) Everding and Ljutvo Skrijel, Everding was the front-seat passenger in a low-speed collision in May 2000. She experienced immediate pain and underwent various post-accident therapies.
She consulted a lawyer in May 2001. She was then advised that for a soft-tissue injury, she had no case unless there was some visible or objective injury.
Everding's family doctor advised her in May 2004 that she suffered from a chronic pain condition.
An MRI scan was recommended in September 2005. Conducted in May 2006, the MRI revealed a disc bulge at two locations.
The MRI provided objective proof she had a permanent injury that might have exceeded the $15,000 statutory deductible. She consulted her lawyers, who then launched her claim in 2007.
The defendant moved for summary judgment to dismiss the case, arguing the claim was statute-barred as of May 2006. The defendant said the plaintiff knew or ought to have known that she had a valid claim when she was diagnosed with chronic pain in May 2004.
The lower court agreed, but the Appeal Court said the motions judge should have considered first whether the claim would have exceeded the $15,000 threshold.
Counsel for the defendant argued the issue of whether or not the claim would have exceeded the $15,000 deductible "should not be considered a condition precedent to the discoverability of a claim that is potentially significant enough" to override the limitations spelled out in the Insurance Act.
"I reject this submission," Ontario Court of Appeal Justice Kathryn Feldman wrote for the court. Feldman cited with approval the Ontario Superior Court decision in Voisin v. Hartin:
"The rationale underlying the discoverability principle is that the law ought not to preclude an action before a person is able to sue on it. In my view, this rationale requires me to take into account the effect of the $10,000 [now $15,000] requirement.
"It would be fundamentally unfair to require the plaintiff to bring an action in which he could not expect to recover anything because his claim could not surpass the $10,000 exemption.
Sunday, June 20, 2010
Will Your Insurance Cover That Freak Accident?
Floods and earthquakes require special policies, but a lot of odd mishaps are paid for by homeowner's and auto insurance.
Seven Freak Accidents Where Insurance Paid Off
Stuff happens. That's why you need insurance--for your home, auto and an umbrella liability policy to protect you if you're sued. The good news is that homeowner's and auto insurance covers more than you might think. It's not just the obvious perils to your property, like fire, lightning, wind, hail or run-of-the-mill fender benders. Insurance can also pay off when the really unexpected happens.
Are you covered if a guest falls off your roof deck? If your punch bowl tips over into your grand piano? If the frisky terrier in your lap leads you to drive distracted? For details on these and other freak accidents where insurance did pay off, click here.
Don't be afraid to ask directly, before you face a loss. Understandably, hearing about someone else's misfortune gets folks to wondering. "Customers call in to question unusual incidents all the time, saying, 'My friend just had a loss,' and asking, 'Would I be covered?'" reports Mario Morales, an underwriting manager with MetLife ( MET - news - people ) Auto & Home. Insurers and insurance agents don't mind such questions. "The best thing an insured can do is to contact an agent or company and periodically go over the coverage," Morales says
While you're asking about the weird stuff, undertake a broader review of your coverage. If you're like many consumers, you may well be paying too much or paying for the wrong sorts of coverage.
You could well be underinsured in some areas. (Say, the replacement coverage for your home is pegged too low, or you carry too small an umbrella policy.) Meanwhile, you could be overinsured for other risks. (Say, you have too much coverage on the contents of your home, or your deductibles are too low.) For 10 ways to save on insurance, click here.
When doing an insurance review, make sure you take note of any changes in coverage since you first bought your policy. Companies have to make customers aware of any contractual changes--that's why you get all those extra notices about coverage limits along with your renewal each year. But if you're like many busy folks, you may have filed those notices away (in the insurance file or the circular one) without reading the fine print.
When you do your review, be aware that there are two big perils that require special coverage beyond basic homeowner's insurance: floods and earthquakes. You don't live in a flood-prone area? You may still want flood insurance. One reason: damage caused by water seeping in through the concrete in your basement probably isn't covered unless you have flood insurance. (Note, however, that if your basement floods because a frozen pipe bursts or wind-driven rain comes into your house after your windows are blown, the water damage would be covered under standard homeowner's insurance.) Most policies have limited--if any--coverage for earthquake damage, unless you buy add-on earthquake coverage.
A common instance where people assume they're covered, but they're not, is if there's a large or total loss of their home and new building codes drives up the cost of building a replacement. Most policies provide no or limited coverage for this unless you have what's called "law and ordinance coverage"--an add-on that's especially important if you have an older home.
Another situation Morales says MetLife gets lots of confused
calls about is trees. If a neighbor's tree falls in your yard and hits your house or an outbuilding, the damage and the tree removal is typically covered. But if the tree just lands Wear and tear losses are your problem, too. Example: You buy a rider to cover an expensive painting and then you hang your masterpiece on a wall facing West. Unfortunately, you don't have UV protection on your windows and the painting fades. That wouldn't be covered, warns Daniel Glunt, chief executive and founder of Fort Point Insurance Services in San Francisco.
Here's another thought to keep in mind when you do your insurance review. More than one in six drivers don't have auto insurance, estimates the nonprofit Insurance Research Council in Malvern, Pa. If one of these uninsured folks hit you, you'd better have uninsured motorist coverage, required in some but not all states. Make sure you have uninsured motorist coverage on your umbrella policy, too. That helped a good Samaritan in San Francisco who, after helping a child trying to cross a country highway, was hit by an uninsured motorist. His policy paid out $1 million, says Glunt.
Glunt recommends high-net-worth folks carry $5 million in umbrella liability coverage to protect their personal assets should something tragic happen. His firm has handled big insurance payouts for clients, including millions to the family of a teenager paralyzed after diving into the shallow end of a client's pool, and millions to a successful entrepreneur whom a client hit in a crosswalk when driving down a busy street. In such cases, having the insurer on the hook means help with legal defense costs, too.
Remember President Clinton's defense of Paula Jones' defamation and sexual harassment lawsuit? State Farm and a subsidiary of Chubb helped pay for his defense because Jones alleged "bodily injury" and Clinton had personal liability umbrella policies; he ultimately settled, with part of the cost paid by Chubb. As a result, most carriers now exclude sexual harassment on personal umbrella policies. So check your policy as well as your baser instincts.
Seven Freak Accidents Where Insurance Paid Off
Stuff happens. That's why you need insurance--for your home, auto and an umbrella liability policy to protect you if you're sued. The good news is that homeowner's and auto insurance covers more than you might think. It's not just the obvious perils to your property, like fire, lightning, wind, hail or run-of-the-mill fender benders. Insurance can also pay off when the really unexpected happens.
Are you covered if a guest falls off your roof deck? If your punch bowl tips over into your grand piano? If the frisky terrier in your lap leads you to drive distracted? For details on these and other freak accidents where insurance did pay off, click here.
Don't be afraid to ask directly, before you face a loss. Understandably, hearing about someone else's misfortune gets folks to wondering. "Customers call in to question unusual incidents all the time, saying, 'My friend just had a loss,' and asking, 'Would I be covered?'" reports Mario Morales, an underwriting manager with MetLife ( MET - news - people ) Auto & Home. Insurers and insurance agents don't mind such questions. "The best thing an insured can do is to contact an agent or company and periodically go over the coverage," Morales says
While you're asking about the weird stuff, undertake a broader review of your coverage. If you're like many consumers, you may well be paying too much or paying for the wrong sorts of coverage.
You could well be underinsured in some areas. (Say, the replacement coverage for your home is pegged too low, or you carry too small an umbrella policy.) Meanwhile, you could be overinsured for other risks. (Say, you have too much coverage on the contents of your home, or your deductibles are too low.) For 10 ways to save on insurance, click here.
When doing an insurance review, make sure you take note of any changes in coverage since you first bought your policy. Companies have to make customers aware of any contractual changes--that's why you get all those extra notices about coverage limits along with your renewal each year. But if you're like many busy folks, you may have filed those notices away (in the insurance file or the circular one) without reading the fine print.
When you do your review, be aware that there are two big perils that require special coverage beyond basic homeowner's insurance: floods and earthquakes. You don't live in a flood-prone area? You may still want flood insurance. One reason: damage caused by water seeping in through the concrete in your basement probably isn't covered unless you have flood insurance. (Note, however, that if your basement floods because a frozen pipe bursts or wind-driven rain comes into your house after your windows are blown, the water damage would be covered under standard homeowner's insurance.) Most policies have limited--if any--coverage for earthquake damage, unless you buy add-on earthquake coverage.
A common instance where people assume they're covered, but they're not, is if there's a large or total loss of their home and new building codes drives up the cost of building a replacement. Most policies provide no or limited coverage for this unless you have what's called "law and ordinance coverage"--an add-on that's especially important if you have an older home.
Another situation Morales says MetLife gets lots of confused
calls about is trees. If a neighbor's tree falls in your yard and hits your house or an outbuilding, the damage and the tree removal is typically covered. But if the tree just lands Wear and tear losses are your problem, too. Example: You buy a rider to cover an expensive painting and then you hang your masterpiece on a wall facing West. Unfortunately, you don't have UV protection on your windows and the painting fades. That wouldn't be covered, warns Daniel Glunt, chief executive and founder of Fort Point Insurance Services in San Francisco.
Here's another thought to keep in mind when you do your insurance review. More than one in six drivers don't have auto insurance, estimates the nonprofit Insurance Research Council in Malvern, Pa. If one of these uninsured folks hit you, you'd better have uninsured motorist coverage, required in some but not all states. Make sure you have uninsured motorist coverage on your umbrella policy, too. That helped a good Samaritan in San Francisco who, after helping a child trying to cross a country highway, was hit by an uninsured motorist. His policy paid out $1 million, says Glunt.
Glunt recommends high-net-worth folks carry $5 million in umbrella liability coverage to protect their personal assets should something tragic happen. His firm has handled big insurance payouts for clients, including millions to the family of a teenager paralyzed after diving into the shallow end of a client's pool, and millions to a successful entrepreneur whom a client hit in a crosswalk when driving down a busy street. In such cases, having the insurer on the hook means help with legal defense costs, too.
Remember President Clinton's defense of Paula Jones' defamation and sexual harassment lawsuit? State Farm and a subsidiary of Chubb helped pay for his defense because Jones alleged "bodily injury" and Clinton had personal liability umbrella policies; he ultimately settled, with part of the cost paid by Chubb. As a result, most carriers now exclude sexual harassment on personal umbrella policies. So check your policy as well as your baser instincts.
Tuesday, June 15, 2010
Ontario releases new Minor Injury Guideline, a key feature of proposed auto reforms
Ontario's insurance regulator, the Financial Services Commission of Ontario (FSCO), has posted its new Minor Injury Guideline (MIG), a key pillar of the province's proposed new auto insurance reform package.
The MIG will apply to accidents that occur on or after Sept. 1, 2010, when the province's new auto insurance reforms are introduced.
The MIG defines a "minor injury" as "a sprain, strain, whiplash associated disorder, contusion, abrasion, laceration or subluxation [a partial but not complete dislocation of the joint], and any clinically associated sequelae [symptoms following on these injuries]."
A whiplash-associated disorder is further described as a whiplash injury that "does not exhibit objective, demonstrable, definable and clinically relevant neurological signs and does not exhibit a fracture in or dislocation of the spine."
The entire MIG, including more complete definitions, can be found at: http://www.fsco.gov.on.ca/english/pubs/bulletins/autobulletins/2010/a-10_10.asp
Benefits for minor injuries as defined in the new MIG are subject to a $3,500 limit.
The new MIG calls for health care providers to focus on "functional restoration," which "refers to an approach in which the health practitioner is oriented toward function and to the delivery of interventions that help the insured person to reduce or manage his/her pain and associated psycho-social symptoms."
The MIG says treatment should be "focused on what the insured person needs to do in order to function at his/her pre-accident level in his/her home and work environment."
The MIG goes on to note impairments will not fall under the guideline "if the insured person's impairment is predominantly a minor injury, but based on compelling evidence provided by his or her health practitioner, the insured person has a pre-existing medical condition that will prevent the insured person from achieving maximal recovery from the minor injury if he or she is subject to the $3,500 limit..."
The MIG says only in "extremely limited instances" would a pre-existing condition exclude a person's impairment from the guideline. "The existence of any pre-existing condition will not automatically exclude a person's impairment from this [guideline]," the MIG says. "It is intended and expected that the vast majority of pre-existing conditions will not do so."
Treatments or monitoring are to be provided in three, four-week blocks of time. The health practitioner's fees for each block of time are fixed.
The MIG will apply to accidents that occur on or after Sept. 1, 2010, when the province's new auto insurance reforms are introduced.
The MIG defines a "minor injury" as "a sprain, strain, whiplash associated disorder, contusion, abrasion, laceration or subluxation [a partial but not complete dislocation of the joint], and any clinically associated sequelae [symptoms following on these injuries]."
A whiplash-associated disorder is further described as a whiplash injury that "does not exhibit objective, demonstrable, definable and clinically relevant neurological signs and does not exhibit a fracture in or dislocation of the spine."
The entire MIG, including more complete definitions, can be found at: http://www.fsco.gov.on.ca/english/pubs/bulletins/autobulletins/2010/a-10_10.asp
Benefits for minor injuries as defined in the new MIG are subject to a $3,500 limit.
The new MIG calls for health care providers to focus on "functional restoration," which "refers to an approach in which the health practitioner is oriented toward function and to the delivery of interventions that help the insured person to reduce or manage his/her pain and associated psycho-social symptoms."
The MIG says treatment should be "focused on what the insured person needs to do in order to function at his/her pre-accident level in his/her home and work environment."
The MIG goes on to note impairments will not fall under the guideline "if the insured person's impairment is predominantly a minor injury, but based on compelling evidence provided by his or her health practitioner, the insured person has a pre-existing medical condition that will prevent the insured person from achieving maximal recovery from the minor injury if he or she is subject to the $3,500 limit..."
The MIG says only in "extremely limited instances" would a pre-existing condition exclude a person's impairment from the guideline. "The existence of any pre-existing condition will not automatically exclude a person's impairment from this [guideline]," the MIG says. "It is intended and expected that the vast majority of pre-existing conditions will not do so."
Treatments or monitoring are to be provided in three, four-week blocks of time. The health practitioner's fees for each block of time are fixed.
Tuesday, June 8, 2010
Wednesday, May 26, 2010
City of Toronto could not have foreseen bizarre archery injury: Ontario judge
The Ontario Superior Court of Justice has found that the City of Toronto was not negligent in its operation of a public archery range, at which one friend catastrophically injured another in a bizarre plan to retrieve arrows.
The two friends went on a picnic during the fall of 2000 and ended up playing a casual game of archery at an open, public archery operated by the City of Toronto.
After having trouble locating arrows they had shot that had missed their targets, the two concocted a plan whereby one of them would shoot an arrow over the top of the target while another stood down range to see where the arrow would land. In this way, they would find their lost arrows.
In conducting this experiment, Patryk Stankiewicz accidentally shot an arrow that hit Wieslaw Galka, who was standing downward of the target, in the eye and lodged in his brain. Galka sued Stankiewicz and the City of Toronto for $3 million after suffering partial deafness, blindness, reduced mobility and profound psychiatric needs.
The archery range had one entrance, near which a sign was posted. Among other things, the sign said:
• "1. All persons to be clear of range before shooting can commence."
• "3. Arrows must be aimed and released at Target (butts) only."
The plaintiff, who acknowledged he was mostly at fault, basically argued the city was negligent because even though it had posted these rules, it was aware of the fact that people broke these rules all the time. Since the city did nothing to stop the rules from being broken, it must have reasonably foreseen that a stray arrow would hit someone.
Ontario Superior Court Justice Deena Baltman said the argument had "superficial appeal," but nevertheless did not "bear up under closer scrutiny."
Baltman noted in her judgment that the lawyer for the city "admitted seeing archers shooting while players at adjacent butts (targets) were on the field, [but] she never witnessed - or heard of - archers shooting while another archer was down range of the very same butt. The reason for that is likely because the danger is so obvious that no right thinking person would attempt it."
Baltman thus concluded: "The incident in question was so unpredictable that the City could not have been expected to foresee or prevent it."
The two friends went on a picnic during the fall of 2000 and ended up playing a casual game of archery at an open, public archery operated by the City of Toronto.
After having trouble locating arrows they had shot that had missed their targets, the two concocted a plan whereby one of them would shoot an arrow over the top of the target while another stood down range to see where the arrow would land. In this way, they would find their lost arrows.
In conducting this experiment, Patryk Stankiewicz accidentally shot an arrow that hit Wieslaw Galka, who was standing downward of the target, in the eye and lodged in his brain. Galka sued Stankiewicz and the City of Toronto for $3 million after suffering partial deafness, blindness, reduced mobility and profound psychiatric needs.
The archery range had one entrance, near which a sign was posted. Among other things, the sign said:
• "1. All persons to be clear of range before shooting can commence."
• "3. Arrows must be aimed and released at Target (butts) only."
The plaintiff, who acknowledged he was mostly at fault, basically argued the city was negligent because even though it had posted these rules, it was aware of the fact that people broke these rules all the time. Since the city did nothing to stop the rules from being broken, it must have reasonably foreseen that a stray arrow would hit someone.
Ontario Superior Court Justice Deena Baltman said the argument had "superficial appeal," but nevertheless did not "bear up under closer scrutiny."
Baltman noted in her judgment that the lawyer for the city "admitted seeing archers shooting while players at adjacent butts (targets) were on the field, [but] she never witnessed - or heard of - archers shooting while another archer was down range of the very same butt. The reason for that is likely because the danger is so obvious that no right thinking person would attempt it."
Baltman thus concluded: "The incident in question was so unpredictable that the City could not have been expected to foresee or prevent it."
OPP lay charges in alleged staged collision
Ontario Provincial Police have laid fraud charges against 11 people for allegedly staging a collision on Highway 400 north of Toronto in June 2009, the National Post reports.
According to the paper, nine occupants of a car and minivan, as well as two tow-truck drivers staged an early-morning collision on June 22, 2009 on Highway 400 in King Township.
"According to police, investigators became suspicious when accounts of the collision did not match the type of damage apparent on the vehicles, leading officers to believe that the collision and injuries had been staged," the National Post reported.
Canadian Press said the police investigation included information provided by insurers.
According to the paper, nine occupants of a car and minivan, as well as two tow-truck drivers staged an early-morning collision on June 22, 2009 on Highway 400 in King Township.
"According to police, investigators became suspicious when accounts of the collision did not match the type of damage apparent on the vehicles, leading officers to believe that the collision and injuries had been staged," the National Post reported.
Canadian Press said the police investigation included information provided by insurers.
Tuesday, May 18, 2010
Insurer successfully proves arson as the cause of a car fire
The Ontario Superior Court of Justice has dismissed a claim for damages resulting from a vehicular fire, determining instead that arson caused the fire.
In Salihi v TD General Insurance Company, Najib Ullah Salihi attempted to sue his auto insurer for $40,000 for breach of contract.
A fire occurred in the interior of Salihi’s Toyota Camry on Oct. 29, 2007. The damage arising from the fire exceeded the market value of the car. Salihi made a claim under his auto policy and TD General Insurance denied it.
TD General maintained that the fire was deliberately set.
At trial, TD General called on an independent expert specializing in forensic engineering and vehicle fire investigation.
The expert found the fire had been set with a combustible substance in the front passenger foot well. He also found the fire had died out from a lack of oxygen because the windows were shut tight.
Evidence at trial indicated that two nights before the accident, Salihi got into a minor vehicle collision that he did not report to the police or his insurer.
Also, a TD employee testified that this accident would have been the third in a six-month period. TD had indemnified Salihi for the previous two.
In October 2007, TD sent Salihi a notice of cancellation for non-payment of premiums, effective Nov. 25, 2007.
Evidence at trial also indicated that the car was locked at the time of the fire with no indication of a forced entry and that Salihi was the only person with keys to the vehicle at the time.
“I found the plaintiff not to be a credible witness,” wrote Ontario Superior Court Justice Wailan Low, who noted that when Salihi called 911 to report the fire, he asked specifically for a police officer, but not the fire department.
Low found Salihi had a financial motive to set the fire —including a heavy debt load and monthly car payments of $610, not including insurance — and that he was the only one with access to the car.
“In my view, the only reasonable inference to be drawn, given the origin and cause of the fire, the fact that the plaintiff had the sole opportunity to set the fire and the presence of financial motive to do so, is that the plaintiff set the fire.”
As a result, TD General has met the onus to establish its defence of arson.
Justice Low dismissed the action and awarded TD General Insurance $25,000 in costs.
In Salihi v TD General Insurance Company, Najib Ullah Salihi attempted to sue his auto insurer for $40,000 for breach of contract.
A fire occurred in the interior of Salihi’s Toyota Camry on Oct. 29, 2007. The damage arising from the fire exceeded the market value of the car. Salihi made a claim under his auto policy and TD General Insurance denied it.
TD General maintained that the fire was deliberately set.
At trial, TD General called on an independent expert specializing in forensic engineering and vehicle fire investigation.
The expert found the fire had been set with a combustible substance in the front passenger foot well. He also found the fire had died out from a lack of oxygen because the windows were shut tight.
Evidence at trial indicated that two nights before the accident, Salihi got into a minor vehicle collision that he did not report to the police or his insurer.
Also, a TD employee testified that this accident would have been the third in a six-month period. TD had indemnified Salihi for the previous two.
In October 2007, TD sent Salihi a notice of cancellation for non-payment of premiums, effective Nov. 25, 2007.
Evidence at trial also indicated that the car was locked at the time of the fire with no indication of a forced entry and that Salihi was the only person with keys to the vehicle at the time.
“I found the plaintiff not to be a credible witness,” wrote Ontario Superior Court Justice Wailan Low, who noted that when Salihi called 911 to report the fire, he asked specifically for a police officer, but not the fire department.
Low found Salihi had a financial motive to set the fire —including a heavy debt load and monthly car payments of $610, not including insurance — and that he was the only one with access to the car.
“In my view, the only reasonable inference to be drawn, given the origin and cause of the fire, the fact that the plaintiff had the sole opportunity to set the fire and the presence of financial motive to do so, is that the plaintiff set the fire.”
As a result, TD General has met the onus to establish its defence of arson.
Justice Low dismissed the action and awarded TD General Insurance $25,000 in costs.
"Scope for more flat-fee arrangements" with lawyers handling claims: procurement manager
Although 95-98% of insurers’ legal bills for handling claims files still follow a billable-hours fee structure, “there is scope for more flat-fee arrangements,” Lori Brazier, claims procurement manager for Aviva Canada, told a seminar at the CIP Society Symposium 2010 in Toronto.
But to establish a fair flat fee, an insurer would need to collect data from a detailed breakdown of legal costs. And right now at least, insurance companies and law firms do not have the IT systems required to support that type of data collection.
Insurers, financial institutions and pharmaceutical companies in the United States tried to develop a task-based code for analyzing legal fees about 15 years ago.
“They use lawyers a lot and pay a lot of money in the defence of litigation matters,” Brazier said. “The idea was to know what different categories of files should cost, do some benchmarking and see what the averages were.
“It never really went anywhere, because nobody had the systems to do the analysis, to collect the data properly and analyze it.”
Brazier knows of one situation in which a Canadian insurer retains a single law firm, BLG [Borden Ladner Gervais LLP]. BLG has a system for generating data that lets its insurer client know how many hours they are billing for certain files.
The insurer then uses this data in the preparation of its company growth plans. The insurer pays BLG a monthly fee, which is adjusted as needed, Brazier said.
“That’s pretty innovative,” she said. “I’m not aware of any other insurers doing that.”
Brazier said an insurer could try and create a system of its own to generate the data, based on an analysis of invoices for legal fees, but it would be onerous.
“We had some projects where we actually had folks sitting down in a room with boxes of files and creating the database, by entering data,” she said. “And then you can start to see a picture. You can start to see how a file is being staffed, and see whether you really have the right mix of [lawyers working on a file], or is it too senior? It’s useful to get that data.”
The complexity of producing detailed data sets has impeded many insurers from moving to a flat fee structure, Brazier suggested. And so “the hourly rate, the death of which has been predicted for 20 years, is still alive and well.”
But to establish a fair flat fee, an insurer would need to collect data from a detailed breakdown of legal costs. And right now at least, insurance companies and law firms do not have the IT systems required to support that type of data collection.
Insurers, financial institutions and pharmaceutical companies in the United States tried to develop a task-based code for analyzing legal fees about 15 years ago.
“They use lawyers a lot and pay a lot of money in the defence of litigation matters,” Brazier said. “The idea was to know what different categories of files should cost, do some benchmarking and see what the averages were.
“It never really went anywhere, because nobody had the systems to do the analysis, to collect the data properly and analyze it.”
Brazier knows of one situation in which a Canadian insurer retains a single law firm, BLG [Borden Ladner Gervais LLP]. BLG has a system for generating data that lets its insurer client know how many hours they are billing for certain files.
The insurer then uses this data in the preparation of its company growth plans. The insurer pays BLG a monthly fee, which is adjusted as needed, Brazier said.
“That’s pretty innovative,” she said. “I’m not aware of any other insurers doing that.”
Brazier said an insurer could try and create a system of its own to generate the data, based on an analysis of invoices for legal fees, but it would be onerous.
“We had some projects where we actually had folks sitting down in a room with boxes of files and creating the database, by entering data,” she said. “And then you can start to see a picture. You can start to see how a file is being staffed, and see whether you really have the right mix of [lawyers working on a file], or is it too senior? It’s useful to get that data.”
The complexity of producing detailed data sets has impeded many insurers from moving to a flat fee structure, Brazier suggested. And so “the hourly rate, the death of which has been predicted for 20 years, is still alive and well.”
Tuesday, May 11, 2010
Compu-Quote launches Web-based rating tool for recreational vehicles and motorcycles
Compu-Quote has launched its Motorcycle and Miscellaneous Vehicles quoting module to brokers in Alberta, Ontario and Quebec.
The Motorcycle and Miscellaneous Vehicle (ATVs, snow vehicles, campers and trailers) Quoting Module is a Web-based service embedded in AutoRater. It provides full underwriting and rate comparisons.
The tool permits brokers to gather specific underwriting and rating data, develops the class automatically and offers a choice of policy coverages and limits.
Jevco Insurance Company, York Fire & Casualty Insurance Company, Axa Insurance Company, Pafco Insurance Company, L’Unique General Insurance, Pembridge Insurance Company and Aviva Group (Elite), have made their rates available.
The Motorcycle and Miscellaneous Vehicle (ATVs, snow vehicles, campers and trailers) Quoting Module is a Web-based service embedded in AutoRater. It provides full underwriting and rate comparisons.
The tool permits brokers to gather specific underwriting and rating data, develops the class automatically and offers a choice of policy coverages and limits.
Jevco Insurance Company, York Fire & Casualty Insurance Company, Axa Insurance Company, Pafco Insurance Company, L’Unique General Insurance, Pembridge Insurance Company and Aviva Group (Elite), have made their rates available.
Friday, May 7, 2010
Size matters in commercial lines: MSA/Baron Report
Size does matter when it comes to writing commercial lines, although the effects vary depending upon whether Canadian commercial insurers are writing property or liability insurance, according to the Q4-2009 MSA/Baron Outlook Report.
In her article ‘Commercial Lines — Does Size Matter?’ author Barb Addie notes that “over the years, there has been an ongoing debate on which part of the market is most profitable: big, medium or small.”
“The results would indicate that the large risks are indeed the most profitable for commercial property,” Addie concludes. “The smallest risks were the least profitable (very few risks).”
For example, companies writing commercial property premiums averaging higher than $100,000 reported a five-year loss ratio of only 44.2%. In contrast, companies writing premiums averaging less than $1,000 reported a five-year loss ratio of 73.2%.
But the results for medium to large risks were much more variable, Addie added.
In fact, the five-year loss ratio for companies writing commercial property premiums averaging between $5,000 to $10,000 was only 49.6% — much lower than the 61-63% range for companies writing premiums averaging between $10,000 and $100,000.
On the commercial liability side, however, “the largest were the least rather than the most profitable,” Addie observed.
In fact, the mid-sized risks — including large liability writers such as Arch, Ace, XL Insurance and Zurich — were the most profitable, with not a lot of variability.
Overall, Addie notes, “at the current loss ratios, both commercial property and liability are profitable.”
And although “there is some talk of rates inching upwards,” Addies says, “evidence suggests that the commercial market in Canada remains soft.”
In her article ‘Commercial Lines — Does Size Matter?’ author Barb Addie notes that “over the years, there has been an ongoing debate on which part of the market is most profitable: big, medium or small.”
“The results would indicate that the large risks are indeed the most profitable for commercial property,” Addie concludes. “The smallest risks were the least profitable (very few risks).”
For example, companies writing commercial property premiums averaging higher than $100,000 reported a five-year loss ratio of only 44.2%. In contrast, companies writing premiums averaging less than $1,000 reported a five-year loss ratio of 73.2%.
But the results for medium to large risks were much more variable, Addie added.
In fact, the five-year loss ratio for companies writing commercial property premiums averaging between $5,000 to $10,000 was only 49.6% — much lower than the 61-63% range for companies writing premiums averaging between $10,000 and $100,000.
On the commercial liability side, however, “the largest were the least rather than the most profitable,” Addie observed.
In fact, the mid-sized risks — including large liability writers such as Arch, Ace, XL Insurance and Zurich — were the most profitable, with not a lot of variability.
Overall, Addie notes, “at the current loss ratios, both commercial property and liability are profitable.”
And although “there is some talk of rates inching upwards,” Addies says, “evidence suggests that the commercial market in Canada remains soft.”
Monday, May 3, 2010
FSCO outlines transition rules for Ontario's new auto reforms
As of Sept. 1, 2010, as a general rule, the New Statutory Accident Benefits Schedule (SABS) enshrined in Ontario’s new auto insurance reforms “will govern claims processing relating to old accidents,” as well as “the determination of amounts payable by insurers on account of expenses paid to establish benefit entitlements arising out of old accidents,” the Financial Services Commission says in a recent bulletin.
“Old accidents” are defined in the bulletin as automobile accidents occurring on or after Nov. 1, 1996 and before Sept. 1, 2010.
Old SABS will continue to apply, however, to the calculation of benefit entitlements for old accidents.
FSCO’s bulletin outlines some of the transition rules in play when the Ontario auto insurance reforms are implemented on Sept. 1, 2010. The bulletin is available at: http://www.fsco.gov.on.ca/english/pubs/bulletins/autobulletins/2010/a-04_10.asp
Coverages and coverage limits available in accordance with the Old SABS under any automobile insurance policy in effect prior to Sept. 1, 2010 will remain unchanged until the policy expires or is terminated. “The only exception is if the named insured and insurer agree otherwise in writing,” FSCO’s bulletin notes.
In the following sample situations, New SABS will apply to the processing of old claims [A complete list is found in the bulletin.]:
• The accident benefit claim forms currently in use will no longer be approved for old claims. Only the revised forms will be approved.
• An application for determination of catastrophic impairment (OCF-19) must be prepared by a physician or, if the impairment is only a brain impairment, by a physician or neuro-psychologist.
• An assessment of attendant care needs (Form 1) must be completed by an occupational therapist or a registered nurse.
• Interest on amounts that become overdue on or after Sept.1, 2010 with respect to old accidents will accrue at the New SABS rate of 1% per month and be compounded monthly.
But in calculating benefit entitlements, Old SABS will apply to old accidents in the following scenarios (to name a few):
• Income replacement benefits will continue to be calculated at 80% of net income.
• Coverage limits (e.g., $100,000 for medical/rehabilitation benefits) will continue to be governed by the Old SABS.
• Entitlement to caregiver, housekeeping and home maintenance benefits will continue to be governed by the Old SABS.
• Attendant care benefits will continue to be based on the hourly rates that are in effect on the date of the accident.
• The "minor injury" definition, Minor Injury Guideline and $3,500 medical and rehabilitation limit referred to in the New SABS will not apply to old accidents.
• For the purposes of old accidents, references to the Minor Injury Guideline in the New SABS will be deemed to be references to the Pre-approved Framework Guidelines under the Old SABS.
“Old accidents” are defined in the bulletin as automobile accidents occurring on or after Nov. 1, 1996 and before Sept. 1, 2010.
Old SABS will continue to apply, however, to the calculation of benefit entitlements for old accidents.
FSCO’s bulletin outlines some of the transition rules in play when the Ontario auto insurance reforms are implemented on Sept. 1, 2010. The bulletin is available at: http://www.fsco.gov.on.ca/english/pubs/bulletins/autobulletins/2010/a-04_10.asp
Coverages and coverage limits available in accordance with the Old SABS under any automobile insurance policy in effect prior to Sept. 1, 2010 will remain unchanged until the policy expires or is terminated. “The only exception is if the named insured and insurer agree otherwise in writing,” FSCO’s bulletin notes.
In the following sample situations, New SABS will apply to the processing of old claims [A complete list is found in the bulletin.]:
• The accident benefit claim forms currently in use will no longer be approved for old claims. Only the revised forms will be approved.
• An application for determination of catastrophic impairment (OCF-19) must be prepared by a physician or, if the impairment is only a brain impairment, by a physician or neuro-psychologist.
• An assessment of attendant care needs (Form 1) must be completed by an occupational therapist or a registered nurse.
• Interest on amounts that become overdue on or after Sept.1, 2010 with respect to old accidents will accrue at the New SABS rate of 1% per month and be compounded monthly.
But in calculating benefit entitlements, Old SABS will apply to old accidents in the following scenarios (to name a few):
• Income replacement benefits will continue to be calculated at 80% of net income.
• Coverage limits (e.g., $100,000 for medical/rehabilitation benefits) will continue to be governed by the Old SABS.
• Entitlement to caregiver, housekeeping and home maintenance benefits will continue to be governed by the Old SABS.
• Attendant care benefits will continue to be based on the hourly rates that are in effect on the date of the accident.
• The "minor injury" definition, Minor Injury Guideline and $3,500 medical and rehabilitation limit referred to in the New SABS will not apply to old accidents.
• For the purposes of old accidents, references to the Minor Injury Guideline in the New SABS will be deemed to be references to the Pre-approved Framework Guidelines under the Old SABS.
Tuesday, April 20, 2010
Ontario Court of Appeal finds trial judge did not 'double deduct' IRBs from jury award
As long as a trial judge has not directed a jury to deduct income replacement benefits (IRBs) from their jury award, the trial judge may deduct IRBs from the jury award without fear of “double deduction,” the Ontario’s Court of Appeal has ruled.
In Karamzadeh v. Pierre, Heydar Karamzadeh was found by the Ontario Superior Court of Justice to have sustained a “minor soft tissue injury to the neck area,” and was awarded $15,000 in general damages and $17,500 for past lost income.
While the lower court’s jury deliberated, the trial judge found that Karamzadeh’s injuries did not constitute a permanent and serious impairment of an important physical, mental or psychological function. As a result, a statutory deduction of $15,000 applied, and he was not able to recover the general damages.
Furthermore, the trial judge applied a 20% reduction to the past income award and deducted income replacement benefits received by Karamzadeh, reducing the $17,500 for past lost income to nil.
Karamzadeh appealed, arguing that both counsel for the plaintiff and the defence mentioned to the jury — and also the trial judge — in their closing arguments that IRBs ought to be subtracted from any award for past income loss. This was the equivalent of instructing the jury to deduct the IRBs, Karamzadeh argued.
But, the Court of Appeal found that Karamzadeh failed to properly characterize what the trial judge said in his charge.
“The trial judge did make reference to counsel’s submissions, but counsel for the plaintiff now acknowledges that the trial judge did not specifically direct the jury to make a deduction for IRBs that had been paid to the plaintiff; nor did he provide to the jury any formula to calculate past income loss,” the panel wrote.
“We see no error made by [the trial judge] in deducting the IRB payments received by the plaintiff from the gross amount awarded by the jury. Accordingly, this ground of appeal must fail.”
In Karamzadeh v. Pierre, Heydar Karamzadeh was found by the Ontario Superior Court of Justice to have sustained a “minor soft tissue injury to the neck area,” and was awarded $15,000 in general damages and $17,500 for past lost income.
While the lower court’s jury deliberated, the trial judge found that Karamzadeh’s injuries did not constitute a permanent and serious impairment of an important physical, mental or psychological function. As a result, a statutory deduction of $15,000 applied, and he was not able to recover the general damages.
Furthermore, the trial judge applied a 20% reduction to the past income award and deducted income replacement benefits received by Karamzadeh, reducing the $17,500 for past lost income to nil.
Karamzadeh appealed, arguing that both counsel for the plaintiff and the defence mentioned to the jury — and also the trial judge — in their closing arguments that IRBs ought to be subtracted from any award for past income loss. This was the equivalent of instructing the jury to deduct the IRBs, Karamzadeh argued.
But, the Court of Appeal found that Karamzadeh failed to properly characterize what the trial judge said in his charge.
“The trial judge did make reference to counsel’s submissions, but counsel for the plaintiff now acknowledges that the trial judge did not specifically direct the jury to make a deduction for IRBs that had been paid to the plaintiff; nor did he provide to the jury any formula to calculate past income loss,” the panel wrote.
“We see no error made by [the trial judge] in deducting the IRB payments received by the plaintiff from the gross amount awarded by the jury. Accordingly, this ground of appeal must fail.”
Ontario auto insurers approved for rate increases averaging 5.61% in 2010 Q1
Ontario auto insurance rates continued their upward climb in 2010 Q1, with the province’s auto insurers getting approved rate increases averaging 5.61% when weighted by market share.
“The rate changes approved in 2004, 2005, 2006, 2007, 2008 and 2009 were -10.60%, -2.43%, -1.27%, +0.55%, +5.59% and +8.77%, respectively, for the entire market,” the Financial Services Commission of Ontario (FSCO) noted in a quarterly release announcing the rate changes.
Approved rate changes in the first quarter for the following 10 companies, listed in order of market share, are as follows:
State Farm Mutual Automobile Insurance Company
Market share: 12.46%
Rate Change: +7.24%
Intact Insurance Company
Market share: 7.55%
Rate Change: +0.60%
Economical Mutual Insurance Company
Market share: 6.21%%
Rate Change: +4.16%
Security National Insurance Company
Market share: 5.57%
Rate Change: +7.80%
Pilot Insurance Company
Market share: 4.89%
Rate Change: +18.50%
The Dominion of Canada General Insurance Company
Market share: 4.75%
Rate Change: +0.18%
Co-operators General Insurance Company
Market share: 4.57%
Rate Change: +2.49%
Wawanesa Mutual Insurance Company
Market share: 3.76%
Rate Change: +8.98%
Unifund Assurance Company
Market share: 3.62%
Rate Change: +2.27%
Allstate Insurance Company of Canada
Market share: 2.91%
Rate Change: -1.01%
“The rate changes approved in 2004, 2005, 2006, 2007, 2008 and 2009 were -10.60%, -2.43%, -1.27%, +0.55%, +5.59% and +8.77%, respectively, for the entire market,” the Financial Services Commission of Ontario (FSCO) noted in a quarterly release announcing the rate changes.
Approved rate changes in the first quarter for the following 10 companies, listed in order of market share, are as follows:
State Farm Mutual Automobile Insurance Company
Market share: 12.46%
Rate Change: +7.24%
Intact Insurance Company
Market share: 7.55%
Rate Change: +0.60%
Economical Mutual Insurance Company
Market share: 6.21%%
Rate Change: +4.16%
Security National Insurance Company
Market share: 5.57%
Rate Change: +7.80%
Pilot Insurance Company
Market share: 4.89%
Rate Change: +18.50%
The Dominion of Canada General Insurance Company
Market share: 4.75%
Rate Change: +0.18%
Co-operators General Insurance Company
Market share: 4.57%
Rate Change: +2.49%
Wawanesa Mutual Insurance Company
Market share: 3.76%
Rate Change: +8.98%
Unifund Assurance Company
Market share: 3.62%
Rate Change: +2.27%
Allstate Insurance Company of Canada
Market share: 2.91%
Rate Change: -1.01%
Monday, April 19, 2010
Ontario quoted auto rates soar in 2010 Q1: Kanetix
Auto rates quoted in Ontario in 2010 Q1 increased by 11.6% over 2009 Q1 quoted rates, according to Kanetix’s quarterly review of auto insurance.
The increase on the quoted rates “suggest that Ontario drivers are feeling the effects of rate increases approved in 2009,” said a Kanetix release.
“Reforms have been announced which, it is anticipated, could slow or possibly even reverse rate increases.”
Quebec drivers obtained quotes that were 4.6% lower this year than last. About 6% opted to see how much could be saved with a two-year policy commitment, and 7% more quotes were obtained by shoppers willing to bundle their home and auto insurance, making them eligible for a multi-line discount.
In Alberta, quoted rates decreased 1.6%. “This result is consistent with the industry-wide reduction of premiums implemented on Nov. 1, 2009 for mandatory basic auto insurance,” a Kanetix release says.
The increase on the quoted rates “suggest that Ontario drivers are feeling the effects of rate increases approved in 2009,” said a Kanetix release.
“Reforms have been announced which, it is anticipated, could slow or possibly even reverse rate increases.”
Quebec drivers obtained quotes that were 4.6% lower this year than last. About 6% opted to see how much could be saved with a two-year policy commitment, and 7% more quotes were obtained by shoppers willing to bundle their home and auto insurance, making them eligible for a multi-line discount.
In Alberta, quoted rates decreased 1.6%. “This result is consistent with the industry-wide reduction of premiums implemented on Nov. 1, 2009 for mandatory basic auto insurance,” a Kanetix release says.
FSCO orders claimant to produce medical records of alleged prior accidents
The Financial Services Commission of Ontario (FSCO) has ordered a claimant to produce OHIP records and the clinical notes of his family doctor dating back to motor vehicle accidents that allegedly occurred up to five years prior to the 2005 accident that was the subject of arbitration.
The applicant, Karel Paskoe, was involved in a motor vehicle accident on Aug. 23, 2005. He agreed to provide records of his family doctor and OHIP records to his insurer, Motors Insurance Corporation, up to one year prior to the 2005 accident.
Some of the medical documents he produced referred to previous accidents.
For example, a 2007 physiotherapy assessment report noted Paskoe was involved in a minor accident in 2000. And a separate 2007 Paramount Rehabilitation Centre Inc. report stated: “Mr. Paskoe reported that he had previous motor vehicle accidents in 2001 and 2002. He was injured but recovered.”
Motors took the position that since the condition about which Paskoe complained is progressive, it would be unfair to restrict the production of pre-accident medical records to one year — particularly in light of evidence that suggested Paskoe sustained injuries in motor vehicle accidents occurring in 2000, 2001 and 2002.
Paskoe said the apparent inconsistencies in the medical reports were not a result of how he reported the information to the medical assessors in question.
He further argued that in the absence of supporting and reliable evidence produced by the insurer about the relevance of the medical reports to be produced, the claimant should be given the benefit of the doubt.
But the “references in the medical reports to earlier accidents provide a foundation for Motors to amplify the scope of foundations,” FSCO arbitrator Judith Killoran wrote in her decision. “Motors requires further medical information to properly assess questions of causation and quantum….
“I find it is reasonable and relevant for Mr. Paskoe to produce OHIP records and the clinical notes and records of his family doctor dating back to prior motor vehicle accidents as early as 2000.”
The applicant, Karel Paskoe, was involved in a motor vehicle accident on Aug. 23, 2005. He agreed to provide records of his family doctor and OHIP records to his insurer, Motors Insurance Corporation, up to one year prior to the 2005 accident.
Some of the medical documents he produced referred to previous accidents.
For example, a 2007 physiotherapy assessment report noted Paskoe was involved in a minor accident in 2000. And a separate 2007 Paramount Rehabilitation Centre Inc. report stated: “Mr. Paskoe reported that he had previous motor vehicle accidents in 2001 and 2002. He was injured but recovered.”
Motors took the position that since the condition about which Paskoe complained is progressive, it would be unfair to restrict the production of pre-accident medical records to one year — particularly in light of evidence that suggested Paskoe sustained injuries in motor vehicle accidents occurring in 2000, 2001 and 2002.
Paskoe said the apparent inconsistencies in the medical reports were not a result of how he reported the information to the medical assessors in question.
He further argued that in the absence of supporting and reliable evidence produced by the insurer about the relevance of the medical reports to be produced, the claimant should be given the benefit of the doubt.
But the “references in the medical reports to earlier accidents provide a foundation for Motors to amplify the scope of foundations,” FSCO arbitrator Judith Killoran wrote in her decision. “Motors requires further medical information to properly assess questions of causation and quantum….
“I find it is reasonable and relevant for Mr. Paskoe to produce OHIP records and the clinical notes and records of his family doctor dating back to prior motor vehicle accidents as early as 2000.”
Tuesday, April 6, 2010
Motorcycle fatalities on upswing despite record lows for car crash fatalities
Motorcycles with anti-lock brakes are 37% less likely to be in fatal crashes per 10,000 registered vehicle years, according to the Insurance Institute for Highway Safety (IIHS).
Bike models with anti-locks also have 22% fewer claims for damage per insured vehicle year than the same models without antilock brakes, reports the Highway Loss Data Institute (HLDI). [A vehicle year is one vehicle insured for one year, two insured for six months, and so on.]
Crash avoidance technology like motorcycle anti-locks is especially important because more people are taking up riding and more are dying in crashes, says IIHS.
Rider deaths topped 5,000 in 2008 — more than in any other year since the U.S. federal government began collecting fatal crash data in 1975.
Motorcycle registrations also rose to 7.7 million in 2008, up from 4.3 in 2000.
The data is especially disturbing since the upswing has come amid record lows for fatalities in car crashes.
“Stopping a motorcycle is trickier than stopping a car,” the IIHS said. “In an emergency, a [motorcycle] rider faces a split-second choice to either brake hard, which can lock the wheels and cause an overturn, or hold back on braking and risk running into the emergency.”
Anti-locks can help reduce brake pressure when they detect impending lockup and increase pressure when traction is restored, “so riders may brake fully without fear of locking up.”
More than half of motorcycle owners surveyed by IIHS said they would get anti-locks on their next bikes.
Bike models with anti-locks also have 22% fewer claims for damage per insured vehicle year than the same models without antilock brakes, reports the Highway Loss Data Institute (HLDI). [A vehicle year is one vehicle insured for one year, two insured for six months, and so on.]
Crash avoidance technology like motorcycle anti-locks is especially important because more people are taking up riding and more are dying in crashes, says IIHS.
Rider deaths topped 5,000 in 2008 — more than in any other year since the U.S. federal government began collecting fatal crash data in 1975.
Motorcycle registrations also rose to 7.7 million in 2008, up from 4.3 in 2000.
The data is especially disturbing since the upswing has come amid record lows for fatalities in car crashes.
“Stopping a motorcycle is trickier than stopping a car,” the IIHS said. “In an emergency, a [motorcycle] rider faces a split-second choice to either brake hard, which can lock the wheels and cause an overturn, or hold back on braking and risk running into the emergency.”
Anti-locks can help reduce brake pressure when they detect impending lockup and increase pressure when traction is restored, “so riders may brake fully without fear of locking up.”
More than half of motorcycle owners surveyed by IIHS said they would get anti-locks on their next bikes.
Federal Court to hear State Farm's challenge of privacy law
The Federal Court of Canada in Halifax is scheduled to hear State Farm Mutual Automobile Insurance Company v. the Privacy Commissioner of Canada on Apr. 13, 2010.
The case concerns State Farm’s challenge of the privacy commissioner’s jurisdiction in an insurance fraud investigation.
In March 2005, Jennifer Vetter, a State Farm insured, was involved in a motor vehicle accident with Gerald Gaudet.
State Farm hired private investigators who conducted video surveillance of Gaudet.
Pursuant to the Personal Information Protection and Electronic Documents Act (PIPEDA), Gaudet requested the personal information State Farm had compiled, including copies of the surveillance reports and tapes.
State Farm denied the request stating PIPEDA did not apply to any information it held regarding Gaudet.
When the Privacy Commissioner intervened, State Farm argued the Office of the Privacy Commissioner had no jurisdiction regarding the disclosure of surveillance information.
The New Brunswick Court of Appeal ruled in early 2009 that the Federal Court was the proper jurisdiction to hear the case.
The case concerns State Farm’s challenge of the privacy commissioner’s jurisdiction in an insurance fraud investigation.
In March 2005, Jennifer Vetter, a State Farm insured, was involved in a motor vehicle accident with Gerald Gaudet.
State Farm hired private investigators who conducted video surveillance of Gaudet.
Pursuant to the Personal Information Protection and Electronic Documents Act (PIPEDA), Gaudet requested the personal information State Farm had compiled, including copies of the surveillance reports and tapes.
State Farm denied the request stating PIPEDA did not apply to any information it held regarding Gaudet.
When the Privacy Commissioner intervened, State Farm argued the Office of the Privacy Commissioner had no jurisdiction regarding the disclosure of surveillance information.
The New Brunswick Court of Appeal ruled in early 2009 that the Federal Court was the proper jurisdiction to hear the case.
Monday, April 5, 2010
Ontario auto cost insurers $900 million in 2009: IBC
Canadian property and casualty insurers writing Ontario auto lost an astounding $907 million in 2009, said Barbara Sulzenko-Laurie, vice president of policy at the Insurance Bureau of Canada (IBC).
Sulzenko-Laurie presented a ‘State of the Industry’ speech at the Swiss Re–IBC Breakfast in Toronto on Mar. 30, 2010.
The continued escalation of the “excesses and abuses” of Ontario’s no-fault SABS system resulted in a 23.5% increase in the direct loss ratio in Ontario AB lines, she continued. Between 2008 and 2009 the loss ratio increased from 124% to 148%.
Sulzenko-Laurie observed companies that had more exposure to Ontario auto — based on 50% or more of direct earned premium — were much more likely to have returns on equity (ROE) of less than 9%.
“For those companies that had more exposure to Ontario auto, 75% of those companies had an ROE of less than 9%, whereas those companies that were less exposed, almost 50% of those companies achieved an ROE greater than 9%,” she said.
The Financial Services Commission of Ontario remains “very optimistic” that the reforms coming into place Sept. 1, 2010 will meet its projected savings target of 31%, but Sulzenko-Laurie said she’s holding judgement.
She noted the plaintiff bar is already “trying to undermine the reforms” by holding information sessions on “how to get around” them. She read from a sheet of proposed legal seminars entitled, ‘How to Squeeze the Most out of $50,000,’ and ‘Catastrophic Impairment: New Directions.’
In her view, the reforms may have simply come too late.
Sulzenko-Laurie noted IBC approached the government as early as 2006 to take remedial action to curb rising AB costs. Between that time and 2010, when the reforms will actually be implemented, the loss ratio in Ontario auto increased by 19%.
“The results of the slowness of responding to obvious problems in the system is that in the past two years, Ontario insurers have lost $1.3 billion,” Sulzenko-Laurie said. “Ontario consumers have seen their average premiums rise by 10.5%.”
Sulzenko-Laurie presented a ‘State of the Industry’ speech at the Swiss Re–IBC Breakfast in Toronto on Mar. 30, 2010.
The continued escalation of the “excesses and abuses” of Ontario’s no-fault SABS system resulted in a 23.5% increase in the direct loss ratio in Ontario AB lines, she continued. Between 2008 and 2009 the loss ratio increased from 124% to 148%.
Sulzenko-Laurie observed companies that had more exposure to Ontario auto — based on 50% or more of direct earned premium — were much more likely to have returns on equity (ROE) of less than 9%.
“For those companies that had more exposure to Ontario auto, 75% of those companies had an ROE of less than 9%, whereas those companies that were less exposed, almost 50% of those companies achieved an ROE greater than 9%,” she said.
The Financial Services Commission of Ontario remains “very optimistic” that the reforms coming into place Sept. 1, 2010 will meet its projected savings target of 31%, but Sulzenko-Laurie said she’s holding judgement.
She noted the plaintiff bar is already “trying to undermine the reforms” by holding information sessions on “how to get around” them. She read from a sheet of proposed legal seminars entitled, ‘How to Squeeze the Most out of $50,000,’ and ‘Catastrophic Impairment: New Directions.’
In her view, the reforms may have simply come too late.
Sulzenko-Laurie noted IBC approached the government as early as 2006 to take remedial action to curb rising AB costs. Between that time and 2010, when the reforms will actually be implemented, the loss ratio in Ontario auto increased by 19%.
“The results of the slowness of responding to obvious problems in the system is that in the past two years, Ontario insurers have lost $1.3 billion,” Sulzenko-Laurie said. “Ontario consumers have seen their average premiums rise by 10.5%.”
Tuesday, March 30, 2010
Insurance industry ranked "below average" for e-customer service
The insurance industry performed well in phone customer service, but was ranked as below average when it came to customer service through email or the Web, an eGain survey found.
eGain Communications Corporation, a customer service software provider, evaluated multiple aspects of Web self-service and contact centre customer service of 175 companies in the U.S. and Canada.
The companies covered a spectrum of sectors, including, retail, insurance, healthcare, consumer goods manufacturing, financial services and pharmaceuticals.
Analysts used a “mystery shopper” approach. Aspects of the customer service experience were rated on a scale from zero to four (a score of less than one being ‘poor’ and above three as ‘exceptional’). Scores were abstracted to an overall service quotient for each of the companies, as well as for the industry sector and overall market.
The overall performance of the insurance sector was unchanged from 2008 with a “below average” score of 1.8.
Web self-service improved from 1.3 (below average) to 1.7 (still below average, but improved).
Email customer service dropped slightly from 2.2 (above average) to 2.1.
“The industry has yet to adopt eService [email, Web chat, co-browsing] best practices,” an eGain release says.
“For instance, a stunning 84% of the companies did not send an automatic acknowledgement of email queries, a common best practice that can help set the right expectations and elevate customer experience.”
Roughly 28% of the companies simply did not respond to email queries, ignoring revenue opportunities, it added.
eGain Communications Corporation, a customer service software provider, evaluated multiple aspects of Web self-service and contact centre customer service of 175 companies in the U.S. and Canada.
The companies covered a spectrum of sectors, including, retail, insurance, healthcare, consumer goods manufacturing, financial services and pharmaceuticals.
Analysts used a “mystery shopper” approach. Aspects of the customer service experience were rated on a scale from zero to four (a score of less than one being ‘poor’ and above three as ‘exceptional’). Scores were abstracted to an overall service quotient for each of the companies, as well as for the industry sector and overall market.
The overall performance of the insurance sector was unchanged from 2008 with a “below average” score of 1.8.
Web self-service improved from 1.3 (below average) to 1.7 (still below average, but improved).
Email customer service dropped slightly from 2.2 (above average) to 2.1.
“The industry has yet to adopt eService [email, Web chat, co-browsing] best practices,” an eGain release says.
“For instance, a stunning 84% of the companies did not send an automatic acknowledgement of email queries, a common best practice that can help set the right expectations and elevate customer experience.”
Roughly 28% of the companies simply did not respond to email queries, ignoring revenue opportunities, it added.
Friday, March 12, 2010
Fulfilling legal obligation to advise of policy cancellation does not prove insured knew his policy had been cancelled: FSCO
An insurer that has satisfied its legal requirement for policy cancellation has not automatically proven that the insured knew his policy had been cancelled, an Ontario arbitrator has ruled.
In Ersin Aksoy and Markel Insurance Company of Canada, the Financial Services Commission of Ontario (FSCO) found Markel had to pay Ersin Aksoy income replacement benefits and housekeeping expenses.
Aksoy was confined to a wheelchair after serious injuries he sustained in December 2006, when he lost control of his Jeep Grand Cherokee in Toronto and collided with a tractor-trailer traveling in the same direction.
Markel denied his application for income replacement benefits and housekeeping expenses.
(Kingsway General Insurance Company wrote the policy in 2006, but Markel was the defendant in the arbitration because it handled Aksoy's claim for accident benefits.)
Markel maintained Aksoy knew or ought to have known that he was driving without an insurance policy, which had been cancelled a few months prior to the crash. Kingsway cancelled the policy for non-payment.
FSCO arbitrator Fred Sampliner noted that Kingsway had in fact issued a policy cancellation notice to Aksoy by registered mail to the last-known address the insurer had on file. Aksoy had moved from that address in mid-2006 without notifying the insurer.
The signature on delivery was not Aksoy's name, and Markel argued it was entitled to infer that the person was authorized by Aksoy to pick up his mail for him. Aksoy denied that he ever received the notice of cancellation.
"Markel contends that Canada Post's verifications alone are sufficient evidence that Mr. Aksoy or someone authorized to act for him picked up Kingsway's registered letter, and therefore knew he did not have insurance at the time of the accident," Sampliner wrote. "Case law has established that this issue is an individualized inquiry of the entire circumstances, rather than whether Kingsway satisfied the statutory requirement to send Mr. Aksoy the cancellation notice by registered mail.
"Thus, I reject Markel's position that satisfaction of an insurer's statutory requirement for policy cancellation equates with Markel's burden to prove Mr. Aksoy knew or reasonably ought to have known he did not have insurance."
Kingsway had also advised Aksoy's insurance agent that the policy had been cancelled. But there was conflicting evidence in the arbitration as to whether or not the agent had ever explicitly told Aksoy the policy had been cancelled. (The agent did not keep records of the discussions.)
In Ersin Aksoy and Markel Insurance Company of Canada, the Financial Services Commission of Ontario (FSCO) found Markel had to pay Ersin Aksoy income replacement benefits and housekeeping expenses.
Aksoy was confined to a wheelchair after serious injuries he sustained in December 2006, when he lost control of his Jeep Grand Cherokee in Toronto and collided with a tractor-trailer traveling in the same direction.
Markel denied his application for income replacement benefits and housekeeping expenses.
(Kingsway General Insurance Company wrote the policy in 2006, but Markel was the defendant in the arbitration because it handled Aksoy's claim for accident benefits.)
Markel maintained Aksoy knew or ought to have known that he was driving without an insurance policy, which had been cancelled a few months prior to the crash. Kingsway cancelled the policy for non-payment.
FSCO arbitrator Fred Sampliner noted that Kingsway had in fact issued a policy cancellation notice to Aksoy by registered mail to the last-known address the insurer had on file. Aksoy had moved from that address in mid-2006 without notifying the insurer.
The signature on delivery was not Aksoy's name, and Markel argued it was entitled to infer that the person was authorized by Aksoy to pick up his mail for him. Aksoy denied that he ever received the notice of cancellation.
"Markel contends that Canada Post's verifications alone are sufficient evidence that Mr. Aksoy or someone authorized to act for him picked up Kingsway's registered letter, and therefore knew he did not have insurance at the time of the accident," Sampliner wrote. "Case law has established that this issue is an individualized inquiry of the entire circumstances, rather than whether Kingsway satisfied the statutory requirement to send Mr. Aksoy the cancellation notice by registered mail.
"Thus, I reject Markel's position that satisfaction of an insurer's statutory requirement for policy cancellation equates with Markel's burden to prove Mr. Aksoy knew or reasonably ought to have known he did not have insurance."
Kingsway had also advised Aksoy's insurance agent that the policy had been cancelled. But there was conflicting evidence in the arbitration as to whether or not the agent had ever explicitly told Aksoy the policy had been cancelled. (The agent did not keep records of the discussions.)
Fraud Charges Laid
A 48-year-old Sault Ste Marie resident has been charged with five courts of fraud and five counts of theft after allegedly misappropriating client’s funds as an insurance agent.
As of press time the allegations have not been proven in a court of law.
Jeffrey McWhinney was arrested and charged on Mar. 9 by Sault Ste. Marie police.
It is alleged that between Dec. 11, 1997 and Aug. 14 2002, McWhinney misappropriated client’s funds as an insurance agent by receiving and converting these funds for his own use, according to a police statement.
According to the police, the approximate fraud value is said to be $353,972 and five separate victims were involved.
McWhinney was associated with — but not an employee of —Schuster Boyd McDonald, who immediately ended its “associate” relationship after “officials first heard speculation of fraudulent activity last spring” and the company alerted the regulatory authorities, according to a company release, posted on SooToday.com.
McWhinney acted independently when it came to case management and client services, the company said.
Andrew Shepherd has been selected as the new Collision Training Director to oversee the delivery of I-CAR and partner training to the collision sector in Canada.
Shepherd brings with him an extensive background in training and professional development, as well as experience in association operations and national committee, according to the Automotive Industries Association (AIA) of Canada.
He will be responsible for building the infrastructure in Canada to deliver, monitor, track and grow training for all aspects of the collision repair industry.
Additional duties will include strategic planning, partnership development, industry relations, business planning, data collection, committee and advisory group development, creation of a trainer network and liaison with the I-CAR head office in the U.S, the association reports.
As of press time the allegations have not been proven in a court of law.
Jeffrey McWhinney was arrested and charged on Mar. 9 by Sault Ste. Marie police.
It is alleged that between Dec. 11, 1997 and Aug. 14 2002, McWhinney misappropriated client’s funds as an insurance agent by receiving and converting these funds for his own use, according to a police statement.
According to the police, the approximate fraud value is said to be $353,972 and five separate victims were involved.
McWhinney was associated with — but not an employee of —Schuster Boyd McDonald, who immediately ended its “associate” relationship after “officials first heard speculation of fraudulent activity last spring” and the company alerted the regulatory authorities, according to a company release, posted on SooToday.com.
McWhinney acted independently when it came to case management and client services, the company said.
Andrew Shepherd has been selected as the new Collision Training Director to oversee the delivery of I-CAR and partner training to the collision sector in Canada.
Shepherd brings with him an extensive background in training and professional development, as well as experience in association operations and national committee, according to the Automotive Industries Association (AIA) of Canada.
He will be responsible for building the infrastructure in Canada to deliver, monitor, track and grow training for all aspects of the collision repair industry.
Additional duties will include strategic planning, partnership development, industry relations, business planning, data collection, committee and advisory group development, creation of a trainer network and liaison with the I-CAR head office in the U.S, the association reports.
Wednesday, March 10, 2010
Ontario Auto Reforms Highlight Choice, Protection and Costs
Coverage choices, consumer protection and tight cost controls—that’s the future for Ontario’s auto insurance system, according to the province’s long-awaited changes.
The Financial Services Commission of Ontario (FSCO) presented a list of auto insurance reforms in a March 3 bulletin to insurers. The new framework includes many of the measures outlined in the commission’s Five-Year Review of Auto Insurance, stressing consumer choice when it comes to coverage, caps on assessment fees and limits on how insurers can use credit scores.
The changes will take effect September 1, 2010.
Accident benefits redefined
The amendments centre on a new Statutory Accident Benefits Schedule (SABS), establishing new minor injury guidelines—for whiplash disorders--capping minor injury medical and rehab assessment costs at $3,500, capping all other assessments at $2,000, and getting rid of “rebuttal examinations” altogether.
Drivers can choose $50,000 in standard, non-catastrophic medical and rehab coverage, or opt for richer, $100,000 or $1.1 million packages, as well as additional caregiver options.
The measures also attempt to streamline the claims process following an accident by simplifying the rules, combining treatment plans and assessment approvals into one process and eliminating certain forms.
They also do away with some red tape, making appraisals mandatory for property damage when requested by an insurer.
Consumer protection
But the consumer is at the core of many changes: insurers are prohibited from dragging out the claims process, either by discouraging or deflecting claims, and the first insurer to receive a completed application is now required to pay out a claim right away.
The new rules also put use of credit scores under the microscope, banning use of credit information for quoting or renewals, and further defining credit information to include not only a credit rating, but an credit-based insurance score, and even the place of residence or number of dependents.
The Financial Services Commission of Ontario (FSCO) presented a list of auto insurance reforms in a March 3 bulletin to insurers. The new framework includes many of the measures outlined in the commission’s Five-Year Review of Auto Insurance, stressing consumer choice when it comes to coverage, caps on assessment fees and limits on how insurers can use credit scores.
The changes will take effect September 1, 2010.
Accident benefits redefined
The amendments centre on a new Statutory Accident Benefits Schedule (SABS), establishing new minor injury guidelines—for whiplash disorders--capping minor injury medical and rehab assessment costs at $3,500, capping all other assessments at $2,000, and getting rid of “rebuttal examinations” altogether.
Drivers can choose $50,000 in standard, non-catastrophic medical and rehab coverage, or opt for richer, $100,000 or $1.1 million packages, as well as additional caregiver options.
The measures also attempt to streamline the claims process following an accident by simplifying the rules, combining treatment plans and assessment approvals into one process and eliminating certain forms.
They also do away with some red tape, making appraisals mandatory for property damage when requested by an insurer.
Consumer protection
But the consumer is at the core of many changes: insurers are prohibited from dragging out the claims process, either by discouraging or deflecting claims, and the first insurer to receive a completed application is now required to pay out a claim right away.
The new rules also put use of credit scores under the microscope, banning use of credit information for quoting or renewals, and further defining credit information to include not only a credit rating, but an credit-based insurance score, and even the place of residence or number of dependents.
Friday, March 5, 2010
New Ontario regulations to eliminate delays in benefit payments due to insurer disputes, ban credit scoring in auto lines
New auto insurance regulations to take effect in Ontario in September 2010 are designed to make it impossible for insurers to place an accident benefits claim on hold in order to resolve a dispute between insurers.
In addition, Ontario regulations now ban credit scoring in auto insurance lines as an "unfair or deceptive act or practice."
Tackling the issue of disputes among insurers, Ontario Regulation 283/95 now prohibits insurers from refusing applications or attempting to redirect claimants to other insurers while they work out which one owes payment.
It also prohibits insurers from attempting to prevent or discourage claimants from submitting applications to them.
The new rules require claimants to submit their applications for benefits to only one insurer, rather than all insurers that may be liable. They also require the first insurer to receive a completed application to provide benefit payments without delay.
On the issue of credit scoring, Ontario Regulation 7/00 has been amended by Ontario Regulation 37/10 to ensure that automobile insurers cannot use credit information for specific automobile insurance purposes.
A definition of "credit information" includes a person’s credit rating, credit score, credit-based insurance score, occupation, place of residence, number of dependants, education, profession, place(s) of employment, income, debts, cost of living and assets.
The regulation also prohibits insurers from requiring that a consumer consent to the collection and use of his/her credit information before providing an insurance quote or offering to renew a policy.
Insurers are not allowed to use credit information in order to treat consumers differently when they respond to requests for quotes, or process applications for automobile insurance or renewals of policies.
In addition, Ontario regulations now ban credit scoring in auto insurance lines as an "unfair or deceptive act or practice."
Tackling the issue of disputes among insurers, Ontario Regulation 283/95 now prohibits insurers from refusing applications or attempting to redirect claimants to other insurers while they work out which one owes payment.
It also prohibits insurers from attempting to prevent or discourage claimants from submitting applications to them.
The new rules require claimants to submit their applications for benefits to only one insurer, rather than all insurers that may be liable. They also require the first insurer to receive a completed application to provide benefit payments without delay.
On the issue of credit scoring, Ontario Regulation 7/00 has been amended by Ontario Regulation 37/10 to ensure that automobile insurers cannot use credit information for specific automobile insurance purposes.
A definition of "credit information" includes a person’s credit rating, credit score, credit-based insurance score, occupation, place of residence, number of dependants, education, profession, place(s) of employment, income, debts, cost of living and assets.
The regulation also prohibits insurers from requiring that a consumer consent to the collection and use of his/her credit information before providing an insurance quote or offering to renew a policy.
Insurers are not allowed to use credit information in order to treat consumers differently when they respond to requests for quotes, or process applications for automobile insurance or renewals of policies.
Demand for standalone intellectual property insurance outstrips capacity: Lloyd's
There is growing interest in buying standalone intellectual property insurance, Lloyd's of London says.
“There’s huge demand out there from customers," David Rees, vice president of the financial and professional risks practice at Marsh, tells lloyds.com. "In fact, there’s more demand than there is market capacity at the moment.”
Intellectual property insurance coverage pays for the legal fees of a policyholder that sues another company for stealing one of its ideas or tarnishing one of its brands.
The insurance market notes that companies can get some limited coverage for legal actions arising out of intellectual property disputes under their D&O or professional indemnity policies. Even so, more companies are inquiring about standalone insurance for protecting their intellectual property.
"That’s because in a global economy, where innovation can be the difference between success and failure, there are an increasing number of bitter wrangles between firms over who came up with a money-spinning idea," the insurance market says on its Web site.
“Every firm insures their physical property, but not everyone insures their intellectual property,” Rees says. “But for many firms their intellectual property is their unique selling point — it’s what they make their money from.”
Lloyd's notes such disputes can be "eye-wateringly expensive," with costs spiralling to millions of dollars before the case has even reached a courtroom.
"Companies as diverse as software firms, pharmaceutical companies, medical device manufacturers and toy makers have approached this niche insurance market…for cover," lloyds.com says.
“There’s huge demand out there from customers," David Rees, vice president of the financial and professional risks practice at Marsh, tells lloyds.com. "In fact, there’s more demand than there is market capacity at the moment.”
Intellectual property insurance coverage pays for the legal fees of a policyholder that sues another company for stealing one of its ideas or tarnishing one of its brands.
The insurance market notes that companies can get some limited coverage for legal actions arising out of intellectual property disputes under their D&O or professional indemnity policies. Even so, more companies are inquiring about standalone insurance for protecting their intellectual property.
"That’s because in a global economy, where innovation can be the difference between success and failure, there are an increasing number of bitter wrangles between firms over who came up with a money-spinning idea," the insurance market says on its Web site.
“Every firm insures their physical property, but not everyone insures their intellectual property,” Rees says. “But for many firms their intellectual property is their unique selling point — it’s what they make their money from.”
Lloyd's notes such disputes can be "eye-wateringly expensive," with costs spiralling to millions of dollars before the case has even reached a courtroom.
"Companies as diverse as software firms, pharmaceutical companies, medical device manufacturers and toy makers have approached this niche insurance market…for cover," lloyds.com says.
New Ontario auto insurance regulations to take effect Sept. 1, 2010
Regulations for Ontario's auto insurance reforms are now public, and will take effective on Sept. 1, 2010, the province's insurance regulator has announced.
The reforms include a new Statutory Accident Benefits Schedule (SABS) that will cap medical/rehabilitation and assessment/examination expenses for minor injuries at $3,500.
The new SABS also features a new Minor Injury Guideline for accidents.
A minor injury is defined under the new SABS as "a sprain, strain, whiplash associated disorder, contusion, abrasion, laceration or subluxation and any clinically associated sequelae." (Sequelae are symptoms arising as a result of any of the listed injuries.)
Reforms to the SABs will provide standard medical and rehabilitation coverage for non-catastrophic claims of $50,000, with optional coverage of $100,000 or $1.1 million.
The reforms will offer standard attendant care coverage for non-catastrophic claims of $36,000, with optional coverage of either $72,000 or $1.072 million.
For non-catastrophic claimants, insurers will supply optional caregiver, housekeeping and home maintenance benefits. Payment for in-home assessments will be available only to those claimants who have sustained more than a minor injury.
Assessments will be capped at $2,000. This applies to all assessments, be they requested by the claimant or the insurer. Rebuttal examinations will be eliminated, as will be a number of existing approval forms.
Several procedures will be simplified. For example, treatment plans and applications for approval of assessments or examinations will be merged into one process. And the rules governing claims processing will be simplified and consolidated.
Adjusters will have discretion in the use of insurer examinations.
The new SABS also contains a definition for "incurred expense".
The reforms include a new Statutory Accident Benefits Schedule (SABS) that will cap medical/rehabilitation and assessment/examination expenses for minor injuries at $3,500.
The new SABS also features a new Minor Injury Guideline for accidents.
A minor injury is defined under the new SABS as "a sprain, strain, whiplash associated disorder, contusion, abrasion, laceration or subluxation and any clinically associated sequelae." (Sequelae are symptoms arising as a result of any of the listed injuries.)
Reforms to the SABs will provide standard medical and rehabilitation coverage for non-catastrophic claims of $50,000, with optional coverage of $100,000 or $1.1 million.
The reforms will offer standard attendant care coverage for non-catastrophic claims of $36,000, with optional coverage of either $72,000 or $1.072 million.
For non-catastrophic claimants, insurers will supply optional caregiver, housekeeping and home maintenance benefits. Payment for in-home assessments will be available only to those claimants who have sustained more than a minor injury.
Assessments will be capped at $2,000. This applies to all assessments, be they requested by the claimant or the insurer. Rebuttal examinations will be eliminated, as will be a number of existing approval forms.
Several procedures will be simplified. For example, treatment plans and applications for approval of assessments or examinations will be merged into one process. And the rules governing claims processing will be simplified and consolidated.
Adjusters will have discretion in the use of insurer examinations.
The new SABS also contains a definition for "incurred expense".
Tuesday, February 23, 2010
23% drop in auto insurance premiums since Nova Scotia auto cap introduced in 2003: IBC
Nova Scotia's $2,500 cap on minor auto injuries has led to an average auto insurance premium reduction of 23% between the time the cap was implemented in 2003 and August 2009, the Insurance Bureau of Canada (IBC) says in a submission to the government.
The IBC's submission is part of the Province of Nova Scotia's review of the cap legislation. (The deadline for submissions was Feb. 15.)
The NDP government has vowed to review the cap as part of its mandate. Nova Scotia Premier Darrell Dexter said on the campaign trail in 2009 that he was in favour of scrapping the cap in favour of a deductible.
"As the government embarks on its review of the cap and considers alternatives for improving the auto insurance system, we believe that it is aware of the risk that eliminating or undertaking major changes to the cap on pain and suffering awards for minor injuries could jeopardize the current rate stability, affordability and availability of auto insurance for drivers in Nova Scotia," IBC says in its submission.
IBC's submission reviews four potential alternatives to the cap, although it does not take a position on any one of them.
The IBC reviews the following four alternatives:
• Increase the cap amount and index it to inflation.
• Add to the list of exceptions to the cap. (For example, injuries to internal organs; concussions with a confirmed loss of consciousness lasting one or more hours in duration; or fractures to legs/feet and the dominant arm/hand.)
• Move to a “first party” or “pure no fault” system. ("From the perspectives of market stability and premium affordability, the Ontario experience [with no-fault] has not been positive, as medical rehabilitation costs have proved difficult to contain and the system is characterized by extreme litigiousness," the IBC submission says.)
• Introduce a deductible to replace the cap.
As for the deductible, the IBC submission says "a warning comes from the
Ontario system, which in 1996 sought to control rising bodily injury costs by imposing a hefty deductible of $15,000 on non-pecuniary awards.
"Instead of producing cost containment, this deductible did not prevent bodily injury costs per vehicle from rising 165% between 1996 and 2002 (after which the deductible was doubled to $30,000 and a regulation further constraining access to non-pecuniary tort awards was introduced)."
The IBC's submission is part of the Province of Nova Scotia's review of the cap legislation. (The deadline for submissions was Feb. 15.)
The NDP government has vowed to review the cap as part of its mandate. Nova Scotia Premier Darrell Dexter said on the campaign trail in 2009 that he was in favour of scrapping the cap in favour of a deductible.
"As the government embarks on its review of the cap and considers alternatives for improving the auto insurance system, we believe that it is aware of the risk that eliminating or undertaking major changes to the cap on pain and suffering awards for minor injuries could jeopardize the current rate stability, affordability and availability of auto insurance for drivers in Nova Scotia," IBC says in its submission.
IBC's submission reviews four potential alternatives to the cap, although it does not take a position on any one of them.
The IBC reviews the following four alternatives:
• Increase the cap amount and index it to inflation.
• Add to the list of exceptions to the cap. (For example, injuries to internal organs; concussions with a confirmed loss of consciousness lasting one or more hours in duration; or fractures to legs/feet and the dominant arm/hand.)
• Move to a “first party” or “pure no fault” system. ("From the perspectives of market stability and premium affordability, the Ontario experience [with no-fault] has not been positive, as medical rehabilitation costs have proved difficult to contain and the system is characterized by extreme litigiousness," the IBC submission says.)
• Introduce a deductible to replace the cap.
As for the deductible, the IBC submission says "a warning comes from the
Ontario system, which in 1996 sought to control rising bodily injury costs by imposing a hefty deductible of $15,000 on non-pecuniary awards.
"Instead of producing cost containment, this deductible did not prevent bodily injury costs per vehicle from rising 165% between 1996 and 2002 (after which the deductible was doubled to $30,000 and a regulation further constraining access to non-pecuniary tort awards was introduced)."
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