Currently, 75% to 80% of auto accident claimants in Ontario are ending up within the Minor Injury Guideline (MIG), but this should be of false comfort to insurers, said Adam Wagman, a lawyer with Howie Sacks & Henry LLP.
Wagman represented the plaintiff counsel's view during A Debate Between Plaintiff & Defence Counsel Concerning Those ‘Problem Cases' at the Canadian Defence Lawyers Accident Benefits seminar on Oct. 21 in Toronto.
"The stats we are hearing is that somewhere between 75% to 80% of people are currently ending up in the MIG," Wagman said. "If insurers are taking comfort in the number of people who are currently being placed in the MIG, they can continue to take comfort for as long as the mediation backlog will allow them to."
Approximately 30,000 cases are waiting to be heard by a Financial Services Commission of Ontario (FSCO) arbitrator, Wagman said.
"Once these cases start hitting arbitrators' doors, without telling you that I have a crystal ball, those people with whiplash or concussions - I think you're going to have a hard time keeping those people in the MIG," he said. "Even a 10% or 11% [reduction in the number of people in the MIG] is a really big difference. The comfort insurers are taking from this is a false sense of comfort."
Kadey B. J. Shultz, partner at Hughes Amys LLP, added defence counsel would be wise to "get creative" and work towards resolving questionable cases before arbitrations start trickling down from FSCO.
"The idea of being strategic, analytical and creative, this is the time to do it," she said. "Now is the time to be risk managers on top of being claims adjusters; not three years from now, when the decisions start to come out.
"It is time to manage the risk, to be creative, to think outside the box. Even though the accident benefits box is so codified and restricted, it does not mean you cannot be creative. It does mean that, to be creative, you need to take the time and engage in the discussion. You need to pick up the phone or respond to the [plaintiff's] call."
Friday, October 28, 2011
Liability lurks in positive employee references on social media: Advisen
An employer offering an employee a positive recommendation through social media is exposing the employer to potential liability, Advisen warns.
In its OneBeacon-sponsored report, Social Media: Employers' Liability for the Activities of their Employees, Advisen said the potential for a company to be involved in a lawsuit alleging defamation from a negative reference is fairly clear, but positive references are not without risk as well.
Many organizations have policies in place that prohibit employees from providing references. But social media sites like LinkedIn have created a feature by which an employee can easily provide a recommendation that is against company policy and without employer control over the content of the reference.
"For example, if an employer terminated an employee for poor performance and was currently being sued by that employee for wrongful termination, a positive recommendation by a supervisor or manager could hinder its defence that the termination was in fact for poor performance," it said.
To mitigate this risk, Advisen suggested organizations implement a policy that prohibits employee recommendations via social media sites without approval from Human Resources.
"The reality is that social media use by employees in the workplace is here to stay," the report says. "Social media technology is constantly evolving, [and] for this reason it is important that an employer understands its exposures, stays on top of the trends and issues and makes educated decisions about how best to protect itself."
In its OneBeacon-sponsored report, Social Media: Employers' Liability for the Activities of their Employees, Advisen said the potential for a company to be involved in a lawsuit alleging defamation from a negative reference is fairly clear, but positive references are not without risk as well.
Many organizations have policies in place that prohibit employees from providing references. But social media sites like LinkedIn have created a feature by which an employee can easily provide a recommendation that is against company policy and without employer control over the content of the reference.
"For example, if an employer terminated an employee for poor performance and was currently being sued by that employee for wrongful termination, a positive recommendation by a supervisor or manager could hinder its defence that the termination was in fact for poor performance," it said.
To mitigate this risk, Advisen suggested organizations implement a policy that prohibits employee recommendations via social media sites without approval from Human Resources.
"The reality is that social media use by employees in the workplace is here to stay," the report says. "Social media technology is constantly evolving, [and] for this reason it is important that an employer understands its exposures, stays on top of the trends and issues and makes educated decisions about how best to protect itself."
Regulatory tweaks required to prevent 'papering' of Ontario auto insurers with treatment plan submissions
The Statutory Accident Benefits Schedule (SABS) in Ontario is in need of further refinement to prevent insurers from getting "papered over" with an overwhelming number of treatment plans and assessments — a major component of auto insurance fraud.
"There are still miles to go [in preventing accident benefits fraud], and [treatment plan] inundation is a good example," said Gregory Jones, claims manager for State Farm Insurance Company, who was a speaker at the IBC's 11th Annual Regulatory Affairs Symposium in Toronto on Oct. 27.
"There's nothing [in the SABS] that prohibits claimants from papering us with 50 treatment plans per claimant, and that's a tremendous impediment."
Jones shared a few examples of current medical fraud investigations. In one example, he presented a photo of a nicked car bumper. The slight scratch resulted in the submission of 66 treatment plans (OCF-18s) on behalf of two claimants, as well as 42 Applications for Approval of Assessments (OCF-22s) from two treatment centres, he said. The total cost of recommended assessments, treatment plans and assistive devices from the two assessment centres amounted to $214,929.01.
"We didn't pay," Jones said. His audience included representatives of Ontario's insurance regulator, the Financial Services Commission of Ontario (FSCO).
In another example of "papering over" an insurer, Jones discussed two medical providers associated with 125 State Farm claim files. The files involved 250 claimants in total, two people per file. The two health care facilities in question submitted 50 treatment plans per claimant, for a total of 12,500 treatment plans from these facilities, Jones noted.
"This is just an example of an abuse of process," he said. "The overwhelming submissions, 50 treatment plans per claimant, are ... designed to inundate claim managers, to lessen their opportunity to investigate the claim. They have six days to do this, and 10 days to do that: we're working under a very regulated environment here. That is an example of ‘papering' an insurance company."
"Just think about that: 50 treatment plans. How could the first treatment plan possibly have had a chance to be effective?"
At a cost of $1,500 to resist each treatment plan, Jones calculated that it would cost an insurer $37,000 to resist such an inundation of claims submissions.
"There are still miles to go [in preventing accident benefits fraud], and [treatment plan] inundation is a good example," said Gregory Jones, claims manager for State Farm Insurance Company, who was a speaker at the IBC's 11th Annual Regulatory Affairs Symposium in Toronto on Oct. 27.
"There's nothing [in the SABS] that prohibits claimants from papering us with 50 treatment plans per claimant, and that's a tremendous impediment."
Jones shared a few examples of current medical fraud investigations. In one example, he presented a photo of a nicked car bumper. The slight scratch resulted in the submission of 66 treatment plans (OCF-18s) on behalf of two claimants, as well as 42 Applications for Approval of Assessments (OCF-22s) from two treatment centres, he said. The total cost of recommended assessments, treatment plans and assistive devices from the two assessment centres amounted to $214,929.01.
"We didn't pay," Jones said. His audience included representatives of Ontario's insurance regulator, the Financial Services Commission of Ontario (FSCO).
In another example of "papering over" an insurer, Jones discussed two medical providers associated with 125 State Farm claim files. The files involved 250 claimants in total, two people per file. The two health care facilities in question submitted 50 treatment plans per claimant, for a total of 12,500 treatment plans from these facilities, Jones noted.
"This is just an example of an abuse of process," he said. "The overwhelming submissions, 50 treatment plans per claimant, are ... designed to inundate claim managers, to lessen their opportunity to investigate the claim. They have six days to do this, and 10 days to do that: we're working under a very regulated environment here. That is an example of ‘papering' an insurance company."
"Just think about that: 50 treatment plans. How could the first treatment plan possibly have had a chance to be effective?"
At a cost of $1,500 to resist each treatment plan, Jones calculated that it would cost an insurer $37,000 to resist such an inundation of claims submissions.
Thursday, October 13, 2011
It's official: Banks now banned from promoting non-authorized insurance on their Web sites
Canada's new regulations prohibiting banks from promoting unauthorized insurance products and services on their Web sites are now official.
The regulations came into force with very few amendments to the pre-published draft of regulations posted for public comment on Feb. 12, 2011.
The only changes were to clarify that the new regulations apply to the banks' "business in Canada." Also, the ban on Web site insurance promotion does not apply if the banks are promoting insurers that deal "only" in authorized types of insurance (as defined by statute).
Under the section ‘Web Promotion,' the regulations state:
"[A] bank shall not, on a bank Web page, provide access to a Web page - directly or through another Web page - through which there is a promotion of a) an insurance company, agent or broker that does not deal only in authorized types of insurance; or b) an insurance policy of an insurance company, agent or broker, or a service in respect of a policy, that is not of only an authorized type of insurance."
In the Canadian Gazette, where the regulations are published (http://www.gazette.gc.ca/rp-pr/p2/2011/2011-10-12/pdf/g2-14521.pdf), the federal government says the new regulations "are required to extend government policy to the Web pages of deposit-taking financial institutions in a similar fashion as the regulatory framework that applies to insurance activities in branches."
Banks are currently not allowed to promote non-authorized insurance products and services in their branches.
The Insurance Brokers Association of Canada (IBAC), which has been lobbying the federal government for these changes for years, said it was "pleased" with the introduction of the new regulations.
"The announcement today by the government extends and clarifies the protection insurance consumers currently are afforded in bank branches from coercive and predatory pressures when it comes to their insurance needs," IBAC says in a press release. "This consumer empowerment now covers the on-line world."
IBAC CEO Dan Danyluk said: "We support the Minister of Finance in his desire for insurance consumers not to be pressured by the coercive environment Canadians face themselves when dealing with a credit grantor when they apply for credit.
"The principle that credit granting institutions ought not to be selling insurance at the point where they grant credit is one that allows Canadians to make a free choice when they decide on their insurance needs; a product that is essential in so many aspects of their lives."
The regulations came into force with very few amendments to the pre-published draft of regulations posted for public comment on Feb. 12, 2011.
The only changes were to clarify that the new regulations apply to the banks' "business in Canada." Also, the ban on Web site insurance promotion does not apply if the banks are promoting insurers that deal "only" in authorized types of insurance (as defined by statute).
Under the section ‘Web Promotion,' the regulations state:
"[A] bank shall not, on a bank Web page, provide access to a Web page - directly or through another Web page - through which there is a promotion of a) an insurance company, agent or broker that does not deal only in authorized types of insurance; or b) an insurance policy of an insurance company, agent or broker, or a service in respect of a policy, that is not of only an authorized type of insurance."
In the Canadian Gazette, where the regulations are published (http://www.gazette.gc.ca/rp-pr/p2/2011/2011-10-12/pdf/g2-14521.pdf), the federal government says the new regulations "are required to extend government policy to the Web pages of deposit-taking financial institutions in a similar fashion as the regulatory framework that applies to insurance activities in branches."
Banks are currently not allowed to promote non-authorized insurance products and services in their branches.
The Insurance Brokers Association of Canada (IBAC), which has been lobbying the federal government for these changes for years, said it was "pleased" with the introduction of the new regulations.
"The announcement today by the government extends and clarifies the protection insurance consumers currently are afforded in bank branches from coercive and predatory pressures when it comes to their insurance needs," IBAC says in a press release. "This consumer empowerment now covers the on-line world."
IBAC CEO Dan Danyluk said: "We support the Minister of Finance in his desire for insurance consumers not to be pressured by the coercive environment Canadians face themselves when dealing with a credit grantor when they apply for credit.
"The principle that credit granting institutions ought not to be selling insurance at the point where they grant credit is one that allows Canadians to make a free choice when they decide on their insurance needs; a product that is essential in so many aspects of their lives."
Ontario arbitrator finds injured trucker eligible for AB, despite his mistaken election of WSIB benefits in confusion following tribunal decision
A trucker seriously injured in an accident is entitled to accident benefits, even though he elected to receive Workplace Safety and Insurance Board (WSIB) benefits in confusion after the Workplace Safety and Insurance Appeals Tribunal (WSIAT) barred most of his tort claim.
Section 61 (formerly s. 59) of the Ontario Statutory Accident Benefits Schedule (SABS) says an insurer is not obligated to pay accident benefits if the insured person is entitled to receive benefits under any workers' compensation scheme (such as the WSIB).
An exemption says this does not apply to insureds who elect to bring a tort action under the Workplace Safety and Insurance Act, as long as the election to pursue a tort action "is not made primarily for the purpose of claiming benefits."
The AB applicant, Rimvydas Narusevicius, was seriously injured in a motor vehicle accident involving three tractor-trailers on Nov. 23, 2003. He applied for and received statutory accident benefits from Wawanesa, his accident benefits insurer.
The insurer and the insured agreed that Narusevicius was deemed to have elected to pursue a tort action when he did not file an election to collect benefits through the WSIB within three months of the accident.
Narusevicius commenced a court action against several of the drivers and owners of the tractor-trailers within the limitation period. In a decision dated Oct. 5, 2009, the WSIAT decided that at the time of the accident Mr. Narusevicius was a worker in the course of his employment and his tort claim was barred as against all but one of the defendants to the tort action.
Following release of the WSIAT decision, Narusevicius's spouse filled out and filed on his behalf an election to collect WSIB benefits dated Nov. 23, 2009.
Ms. Naruseviciene testified that following receipt of the WSIAT decision, she and her husband believed he had to apply for WSIB benefits. They noted that his lawyer had not explained the effect of the WSIAT decision on their lawsuit at that time.
According to Naruseviciene, the lawyer also indicated that Narusevicius had to continue with the lawsuit.
Naruseviciene testified that she sent in the WSIB election form since Narusevicius had no income for years and they felt he had no choice but to apply to WSIB after the WSIAT decision. Her husband was not receiving accident benefits as of this time.
The insurer argued that even if the initial election to pursue a tort action was bona fide, it is no longer so, since Narusevicius "re-elected" for WSIB benefits following the issuance of the decision by the WSIAT
"I do not accept that the applicant's evidence supports that he initiated a lawsuit primarily so that he could collect accident benefits as his evidence made clear that he was interested in suing the drivers responsible for the accident, in addition to medical benefits, so that he would have access to greater compensation," Financial Services Commission of Ontario (FSCO) arbitrator Alec Fadel wrote.
"Even if re-election was provided for in the relevant legislation, I find that the applicant's actions after the WSIAT decision are more reflective of the disappointment and confusion he experienced upon receiving the WSIAT decision and do not reflect an intention to no longer proceed with what they believed to be a valid tort claim."
Section 61 (formerly s. 59) of the Ontario Statutory Accident Benefits Schedule (SABS) says an insurer is not obligated to pay accident benefits if the insured person is entitled to receive benefits under any workers' compensation scheme (such as the WSIB).
An exemption says this does not apply to insureds who elect to bring a tort action under the Workplace Safety and Insurance Act, as long as the election to pursue a tort action "is not made primarily for the purpose of claiming benefits."
The AB applicant, Rimvydas Narusevicius, was seriously injured in a motor vehicle accident involving three tractor-trailers on Nov. 23, 2003. He applied for and received statutory accident benefits from Wawanesa, his accident benefits insurer.
The insurer and the insured agreed that Narusevicius was deemed to have elected to pursue a tort action when he did not file an election to collect benefits through the WSIB within three months of the accident.
Narusevicius commenced a court action against several of the drivers and owners of the tractor-trailers within the limitation period. In a decision dated Oct. 5, 2009, the WSIAT decided that at the time of the accident Mr. Narusevicius was a worker in the course of his employment and his tort claim was barred as against all but one of the defendants to the tort action.
Following release of the WSIAT decision, Narusevicius's spouse filled out and filed on his behalf an election to collect WSIB benefits dated Nov. 23, 2009.
Ms. Naruseviciene testified that following receipt of the WSIAT decision, she and her husband believed he had to apply for WSIB benefits. They noted that his lawyer had not explained the effect of the WSIAT decision on their lawsuit at that time.
According to Naruseviciene, the lawyer also indicated that Narusevicius had to continue with the lawsuit.
Naruseviciene testified that she sent in the WSIB election form since Narusevicius had no income for years and they felt he had no choice but to apply to WSIB after the WSIAT decision. Her husband was not receiving accident benefits as of this time.
The insurer argued that even if the initial election to pursue a tort action was bona fide, it is no longer so, since Narusevicius "re-elected" for WSIB benefits following the issuance of the decision by the WSIAT
"I do not accept that the applicant's evidence supports that he initiated a lawsuit primarily so that he could collect accident benefits as his evidence made clear that he was interested in suing the drivers responsible for the accident, in addition to medical benefits, so that he would have access to greater compensation," Financial Services Commission of Ontario (FSCO) arbitrator Alec Fadel wrote.
"Even if re-election was provided for in the relevant legislation, I find that the applicant's actions after the WSIAT decision are more reflective of the disappointment and confusion he experienced upon receiving the WSIAT decision and do not reflect an intention to no longer proceed with what they believed to be a valid tort claim."
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