Industry reacts to Ontario auto insurance study

Another review of problems plaguing Ontario’s auto insurance sector will likely duplicate ongoing government-sponsored initiatives, according to Insurance Bureau of Canada (IBC). IBC was responding to the recent announcement of a study by the Ontario Standing Committee on General Government into auto insurance industry practices and trends. “IBC believes that most, if not all, of the issues being referred to the committee are already being dealt with by the government elsewhere,” says Ralph Palumbo, IBC vice president of Ontario. In particular, he cites the anti-fraud task force formed by the McGuinty government and the expert panel examining an appropriate definition of catastrophic impairment. “For example, the CAT issue was the subject of lengthy and rigorous review by an expert panel of health care providers,” Palumbo says. “All stakeholders were provided with the opportunity to make submissions, both in writing and before the panel itself. There is no need for another review.” Other groups welcomed the news of a government-led auto insurance study, especially related to catastrophic impairment. “We are optimistic that the formation of this committee will at least forestall any changes to CAT and will certainly provide an opportunity for our organization to engage in a meaningful dialogue relating to what we see as fundamental flaws in the current auto insurance system,” states Paul Harte, president of the Ontario Trial Lawyers Association in a notice to members. It appears that committee intends to conduct a rare, far-reaching inquiry into insurance industry practices,” Harte adds. “This takes the business of insurance from the policy backrooms of FSCO and the Ministry of Finance to center stage at the legislature.” Rick Orr, president of the Insurance Brokers Association of Ontario (IBAO), observed the actions of the standing committee appear to duplicate current ongoing efforts within the industry and government in areas such as auto reform review and fraud. However, the association is interested in the examination of intermediary independence, according to Orr. “We are pleased that they are looking at all intermediaries, not just brokers,” Orr said. “IBAO has a longstanding position against the ownership and control of brokers by insurers. I expect our discussions with the committee will . . . focus on issues such as strengthened transparency and disclosure.” Both IBC and IBAO representatives indicated they would participate in the standing committee’s review process