IDT911 expands in Canada to offer privacy breach services to insurers and businesses

IDT911, an identity management and data risk management services provider, has expanded into Canada to help businesses minimize the chance of breaches and manage them when they occur. The Arizona-based company, which has offices in Toronto, partnered with Economical Insurance and Trisura Guarantee Insurance Company earlier this year to provide privacy breach resources to Canadian businesses. Now, its products, which include data security education and training, proactive exposure mitigation tools, breach response services, and identity management services for consumers, will now be available to clients throughout Canada. It will also offer its expertise to insurance carriers to create privacy products that fit their policyholders’ specific needs. IDT911 also has a training methodology to help brokers promote cyber-security products and services to their clients. Privacy risks within and outside of Canadian businesses are increasing, especially with more technology in the workplaces, IDT911 notes. Employee errors, lost or stolen laptops and other mobile devices and deliberate, target attacks all present major concerns for privacy breaches. Though its offerings are built for businesses of all sizes, small and mid-sized businesses are often most unprepared and unprotected, the company notes.

Low interest rates a drag on investment returns for insurance industry

The low interest rate environment and declining investment returns are putting stress on the insurance industry and having a significant impact on re/insurers, Kurt Karl, chief economist for Swiss Re, noted in a blog post on Sept. 5. “The vulnerability of different lines of business depends on the importance of investment income as a source of revenue and the ability to hedge interest rate risks,” Karl writes. “Life savings products are more sensitive to interest rates than long-tail non-life products,” he adds. “Non-life insurers can periodically attempt to re-price their products as policies are renewed, allowing them to restore profitability.”

Canadian P&C outlook stable to year-end: A.M. Best

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Best TEXT SIZE 2012-09-06 -------------------------------------------------------------------------------- The outlook for the Canadian property and casualty market for the remainder of 2012 is stable, with a low level of change to companies’ ratings, notes a senior financial analyst with A.M. Best Company. This is despite economic uncertainty in many parts of the world, Jackie Catrino Lentz commented during the rating agency’s 2012 Insurance Market Briefing in Toronto on Sept. 6. “We see no significant drivers emerging currently that would indicate a near-term change to the stable outlook.” The vast majority, 97%, of companies are “secure” in terms of financial strength rating (FSR), Catrino Lentz said. Industry consolidation from mergers and acquisitions has led to movement in ratings, mainly companies improving their ratings. “Companies are looking for market share in a very competitive environment,” she said. Among the top 10 rated companies, which include companies that have seen M&A activity in recent months, market share has grown from 58% to 68% between 2007 and 2011, she added. Since 2011, there also have been no ratings downgrades. While the first six months of 2012 have developed favourably, severe weather events in various provinces across Canada may have a negative impact in 2012 Q3. Results for the P&C market overall have been very favourable compared to the last three years, with the auto segment helping to drive the industry to a modest underwriting profit. That strength has been offset by severe damage from major storms across Canada and the United States, including the Slave Lake fire and hail storms in Alberta, Catrino Lentz said. In the coming year, industry consolidation will continue to be a key issue and may test companies’ abilities to merge cultures and even leadership styles, she added. Some companies may have to simplify their business models and refocus on profitable lines, she added.

Insurance fraud in U.S. a $30-billion problem: Deloitte

Property and casualty insurers need to adopt a multi-pronged approach to combat a growing fraud problem in the United States, notes a recent report from Deloitte. The report, A Call to Action: Identifying Strategies to Win the War Against Insurance Claims Fraud, says auto insurance and workers’ compensation are the two biggest sources of an estimated $30 million in insurance fraud. Deloitte also states the National Insurance Crime Bureau (NICB) reported that in 2011 questionable claims for the first time had exceeded 100,000 referrals and had increased by 19% compared to 2009, and specific categories saw even larger increases, such as casualty and miscellaneous claim types. To deal with claims fraud, Deloitte recommends insurers to create an integrated fraud management strategy that rests upon four pillars. Its four pillars of an integrated fraud management program include: •developing a fraud management strategy; •aligning the operating model; •improving information quality; and •leveraging advanced technology tools and analytics. “While many insurers have invested resources in an effort to improve fraud management, few have taken a broad or integrated approach,” Deloitte observes in the report. “Some companies have invested in improving data quality and adopting technology tools, but still lack the business processes, workforce competencies and organizational structure needed to act on the insights gained from data analysis.”

York Regional Police lay 142 charges in alleged auto fraud scheme called "Project Sideswipe"

Forty-six suspects have been charged in connection with an alleged auto fraud scheme called Project Sideswipe involving staged collisions and suspected false medical billings in Ontario. One hundred and forty-two charges have been laid to date, including conspiracy to commit an indictable offence, fraud under $5,000, fraud over $5,000 and obstruction of a police officer, notes a statement from the York Regional Police (YRP). Project Sideswipe involved nine alleged staged collisions that occurred in York Region, as well as suspected associated false medical billings from several medical rehab and assessment centres in Brampton, Toronto and Mississauga, notes a statement from the Insurance Bureau of Canada (IBC). The allegations have not been proven in court. Police believe a ring of recruited drivers and passengers staged collisions to support accident benefit insurance claims. Medical rehab and assessment centres would then use the names, signatures and college registration numbers of medical practitioners, without their proper authorization, and invoice insurance companies for services that were not rendered, the IBC reports. Rick Dubin, vice president of investigation services for the IBC, characterized the efforts as yet, "another step at driving a wedge into one of the alleged sophisticated fraud networks, operating throughout the Greater Toronto Area.” “The potential loss to nine insurers is still being calculated, but it is estimated to be somewhere in the neighbourhood of $5 million,” Dubin notes in the statement. “Insurance premiums are driven by claims costs and right now costs have been driven through the roof in Ontario as a result of fraud and abuse in the system.” Results from a KPMG study estimate the annual cost of auto insurance fraud in Ontario to be in the range of between $770 million and $1.6 billion per year.

FSCO rejects insurer's motion to obtain academic course records of injured woman's daughter/caregiver

A Financial Services Commission of Ontario (FSCO) arbitrator has rejected the motion of an insurer to obtain a copy of the academic course record of the daughter of a woman injured in an auto accident. The insurer in the matter, Security National, argued the course schedule of the daughter, who attended the University of Toronto between 2008 and 2010, was necessary to confirm whether or not the daughter was a full-time or part-time student. This information would then shed light on whether or not the daughter provided housekeeping and caregiving services to her mother as claimed. Mary Anothonipillai was injured in an auto accident on Apr. 21, 2008 and applied for statutory accident benefits. Security National disputed the amount she claimed for housekeeping and caregiving expenses, contending the costs were too high. Security National attempted through correspondence with Anthonipillai’s daughter, Sharel George, to establish George’s status as a student, so it could assess the amount of time she may have taken away from school to provide care for her mother A Financial Services Commission of Ontario (FSCO) arbitrator has rejected the motion of an insurer to obtain a copy of the academic course record of the daughter of a woman injured in an auto accident. The insurer in the matter, Security National, argued the course schedule of the daughter, who attended the University of Toronto between 2008 and 2010, was necessary to confirm whether or not the daughter was a full-time or part-time student. This information would then shed light on whether or not the daughter provided housekeeping and caregiving services to her mother as claimed. Mary Anothonipillai was injured in an auto accident on Apr. 21, 2008 and applied for statutory accident benefits. Security National disputed the amount she claimed for housekeeping and caregiving expenses, contending the costs were too high. Security National attempted through correspondence with Anthonipillai’s daughter, Sharel George, to establish George’s status as a student, so it could assess the amount of time she may have taken away from school to provide care for her mother. George did not supply the information to Security National, which then brought a motion asking FSCO to compel George to provide her academic course schedule during the period at issue (between 2008 and 2010). FSCO did not allow the motion, questioning the relevance and the probative value of the documents. “I am not persuaded that the records are so relevant that their non-disclosure now would prejudice a just and fair hearing so that I should therefore set aside privacy concerns around documents that contain information personal to a third party [George] but none about a party to this proceeding [Anthonipillai],” FSCO arbitrator Jessica Kowalski wrote in her decision. “Nor am I persuaded that the academic schedule is as probative as Security National asserts. That schedule will not disclose how often, or even whether, Ms. George attended her classes.”

Pocket bike is not an automobile for insurance purposes: FSCO arbitrator

An insurance company has won an appeal that a motorized pocket bike should not be considered an automobile for insurance purposes under the Ontario Statutory Accident Benefits Schedule (SABS). Motors Insurance Corporation appealed the original ruling by Financial Services Commission of Ontario (FSCO) arbitrator Denise Ashby in January 2011 that a pocket bike met at least one of the three tests for classification as an automobile. In that original ruling, Motors Insurance and Bouchard, there was an agreed statement of facts that Cassondra Bouchard was injured while riding Kristin Stratton's uninsured pocket bike at Stratton's property on Jan. 13, 2008. In Adam v. Pineland Amusements Ltd., decided in 2007, the Ontario Court of Appeal developed the following three-part test to determine what is an “automobile”: • Is the vehicle an “automobile’ in ordinary parlance? If not, then, • Is the vehicle defined as an “automobile” in the wording of the insurance policy? If not, then, • Does the vehicle fall within any enlarged definition of “automobile” in any relevant statute? Ashby determined that the first two conditions did not apply in Motors Insurance, so she looked to the Off-Road Vehicles Act (ORVA). Ashby interpreted the ORVA to mean that if the pocket bike had required insurance, that would have made it an “automobile.” If so, then Bouchard should have access to accident benefits under her father's automobile policy. Ashby held that the pocket bike met the definition of an off-road vehicle under s. 1 of the ORVA, since it was “a vehicle propelled or driven otherwise than by muscular power or wind and designed to travel [on] not more than three wheels.” Section 15(1) of the ORVA goes on to require off-road vehicles to be insured under a motor vehicle liability policy in accordance with the Insurance Act, with the exception under s. 15(9) “where the vehicle is driven on land occupied by the owner of the vehicle.” Ashby concluded that the pocket bike was required to be insured under the ORVA despite the time and circumstances of the incident because s. 15(9) is a “very narrow exclusion.” However, FSCO arbitrator David Evans disagreed with this assessment in a June 20 appeal decision. He found that the pocket bike was being operated on Stratton's property when the incident occurred. In those circumstances and at that time, the ORVA did not require Stratton's pocket bike to be insured under an automobile insurance policy. Therefore, Bouchard was not operating a motor vehicle and was not involved in an accident within the meaning of s. 2(1) of the SABS. The appeal was allowed in favour of Motors Insurance.

Anti-Fraud Task Force committee seeks public input on proposed measures to combat auto insurance fraud

The Steering Committee of the Ontario Auto Insurance Anti-Fraud Task Force is seeking public comment on several potential recommendations before it submits its final report to the government in the fall of 2012. The steering committee also reported its difficulty in pegging a precise dollar figure to Ontario auto fraud, citing a KPMG study that put auto insurance fraud in 2010 anywhere in the neighbourhood of between $769 million and $1.6 billion. The steering committee report goes on to note that Ernst & Young is reviewing the KPMG figures. Ernst & Young has indicated that KPMG may be underestimating the extent of overall auto insurance fraud in Ontario “because it does not specifically address premeditated fraud, which, as Ernst & Young noted, could range between $130 to $260 million per year.” The steering committee is seeking public input on the following anti-fraud initiatives, among others: • Regulation of health clinics. • Regulation of the towing industry. The Steering Committee of the Ontario Auto Insurance Anti-Fraud Task Force is seeking public comment on several potential recommendations before it submits its final report to the government in the fall of 2012. The steering committee also reported its difficulty in pegging a precise dollar figure to Ontario auto fraud, citing a KPMG study that put auto insurance fraud in 2010 anywhere in the neighbourhood of between $769 million and $1.6 billion. The steering committee report goes on to note that Ernst & Young is reviewing the KPMG figures. Ernst & Young has indicated that KPMG may be underestimating the extent of overall auto insurance fraud in Ontario “because it does not specifically address premeditated fraud, which, as Ernst & Young noted, could range between $130 to $260 million per year.” The steering committee is seeking public input on the following anti-fraud initiatives, among others: • Regulation of health clinics. • Regulation of the towing industry. • Enhanced authority for the Financial Services Commission of Ontario (FSCO), including the ability to regulate the business practices of health care treatment and assessment facilities. • Tightened controls on the delivery of auto accident benefits, including a proposal that would allow insurers to bill claimants $500 as “a form of cost recovery” if claimants fail to attend a medical examination requested by the insurer. • An ability to share personal information in a way that conforms with privacy legislation, but that would allow insurers and authorities to detect and prevent fraud. • Providing insurers with broader civil immunity, so that insurers might be protected from civil suits for reporting to regulators or the police when they have suspicions of fraudulent behaviour by their own policyholders.

Insurer cannot pro rate attendant care based on economic loss: Ontario Court

An Ontario Superior Court judge has held that an insurer cannot take a proportional approach to the payment of attendant care benefits based on the extent of the economic losses suffered. In Henry v. Gore Mutual Insurance Company, the insurer argued that its liability for attendant care benefits was limited to the number of hours that the attendant care provider lost from work. Ontario Superior Court Justice Timothy Ray, however, ordered that Gore Mutual had to pay the full amount of attendant care benefits as set out in the standard auto insurance policy in Ontario. In Henry, an 18-year-old man catastrophically injured in a motor vehicle accident elected to have his mother provide attendant care. The mother took a leave of absence from her full time employment at a retail store to care for her son. The attendant care needs were assessed at $9,500 per month, with the maximum payable by Gore Mutual of $6,000 per month to a lifetime maximum of $1 million, as agreed upon by a Form 1 assessment. Gore calculated that its liability for attendant care payments to the injured victim (applicant) should be limited to the number of hours that the victim’s mother was working as a proportion of the total attendant care hours assessed, or a pro rated version of the $6,000 per month. Specifically, Gore took the position that if the service provider — the applicant’s mother — could show that she had sustained an economic loss, then the expense payable would be to indemnify her to the extent of her financial loss, according to court documents. However, rather than paying her lost income, Gore calculated her number of hours and paid her a proportion of the attendant care expense. The court found in favour of the applicant. In his decision, Ray wrote: “A plain reading of the section provides that if a family member stays home from work, loses income in order to provide all reasonable and necessary attendant care to the insured — and the insured is obligated to pay, promises to pay or does pay the family member, then the definition in section 19(1) has been met. All reasonable and necessary attendant care expenses must then be paid to the insured as described in the Form 1.” (emphasis in original ruling)

Sunrise Propane explosion in Toronto causes more than $25 million in property damage: lawsuit

The law firms representing plaintiffs in an action arising out of a deadly propane explosion in Toronto four years ago report the blast caused more than $25 million in property damage. One employee and an emergency responder died following the massive explosion at the Sunrise Propane distribution plant on Aug. 10, 2008. About 12,500 residents had to be evacuated, notes a statement from Stevensons LLP, Falconer Charney LLP and Sutts Strosberg LLP. The claim includes facts that have not yet been established in court. Class counsel in this matter include Harvin Pitch of Stevensons LLP, Theodore P. Charney of Falconer Charney LLP and Harvey and Sharon Strosberg of Sutts Strosberg LLP. The action has been certified as a class action by the Ontario courts, the statement notes. The certification order allows the matter to proceed against the defendants, including Sunrise Propane Energy Group Inc., the Technical Standards and Safety Authority and a number of suppliers to Sunrise Propane.

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Man in default of auto accident judgments cannot challenge their validity in follow-up actions to recoup amounts: court

A man in default of two court judgments ordering him to pay a total of $80,000 in damages to two injury victims in a 1992 auto accident is not entitled to challenge the validity of those judgments in subsequent actions intended to recoup the outstanding payments, the Court of the Queen’s Bench in Alberta has found. Maurice Riendeau did not defend himself and was noted in default in a personal injury action arising from a September 1992 auto accident, in which Arlene Helen Zawaski and Shawn Bruce McNamara (a passenger in Zawaski’s car) were injured. Zawaski and McNamara commenced an action against Riendeau, who was noted in default, and Alberta’s Administrator of the Motor Vehicle Accident Claims Act stepped in to defend the claims on behalf of Riendeau. After serving Riendeau personally and hearing nothing back, the administrator consented to — and paid — the judgments entered against Riendeau ($35,159.84 to Zawaski and $44,888.78 to McNamara). The administrator later filed renewal actions to recoup payments in both the Zawaski and McNamara judgments in 2006-07, following a $500 payment Riendeau made against the Zawaski judgment in order to restore his driver’s licence when he moved back to Alberta. Riendeau filed statements of defence and counterclaims against the administrator’s renewal actions in an effort to recover the $500 he paid for the Zawaski judgment. The administrator sought summary judgment in the renewal actions and a summary dismissal of Riendeau’s counter-claims on the basis that the court had already adjudicated the Zawaski and McNamara matters. The court agreed with the administrator. “I am satisfied that the circumstances of this particular case warrant the application of the doctrine of res judicata [a legal term referring to a matter already adjudicated],” Alberta Court of Queen’s Bench Justice D.R.G. Thomas wrote for the court. “Further, there is evidence that the amount of $500 was paid by Riendeau on the Zawaski judgment on Mar. 21, 2006. That is evidence that he recognized and accepted the validity of the Zawaski and McNamara judgments. He is now estopped [prevented] from challenging their validity on the basis of this one payment, notwithstanding his claim that he had to make the payment to renew his Alberta driver’s licence.”

Key driving behaviours better indicators of risk than traditional rating variables: Progressive

Key driving behaviors — for example, actual miles driven, braking and time of day of driving — can predict the likelihood of a claim far better than traditional insurance rating variables such as a driver's demographic profile, age, and the year, make and model of the insured vehicle, research by Progressive suggests. Progressive released new findings from an analysis of 5-billion real-time driving miles, concluding that driving behavior has more than twice the predictive power of any other insurance rating factor. Loss costs for drivers with the highest-risk driving behavior are approximately two and a half times the costs for drivers with the lowest-risk behavior, Progressive says in a press release. The company believes the results suggest auto insurance rates can be far more personalized than they are today. Progressive has been collecting and analyzing real-time driving data for 15 years. It says it has doubled the number of miles it has analyzed in the last 18 months since the launch of Snapshot, a usage-based insurance (UBI) program. “It's a case where the data confirms everyone's intuition,” said Progressive president and CEO Glenn Renwick. “We believed that driving behavior was the most predictive rating factor — but didn't expect the difference to be this dramatic. Actual driving behavior predicts a driver's risk more than twice as strongly as any other factor. “It shows that we're not members of an arbitrary actuarial class — we're individuals with our own set of driving habits, which should be reflected in the price we pay for our insurance.” Progressive found that 70% of drivers who signed up for its Snapshot UBI program paid less for their insurance, with customers saving an average of $150 a year.

Sending AB application to the wrong insurer a "reasonable explanation" for a delay in reporting the claim to the proper insurer: arbitrator

An Ontario arbitrator has awarded a $5,000 ‘special award’ against Economical Mutual Insurance Company after the company denied a claim on the basis that the claimant, Roda Egal, had not provided a reason for a delay in making her application following her injury in a motor vehicle accident. Four months after the accident, Egal’s lawyer had provided Economical a reason for the delay — confusion, basically. Approximately three months after her injury, the claimant applied for benefits to the wrong insurer, the American Home Assurance Company, which had approved her treatment plan and began to pay accident benefits. Economical subsequently took two years to obtain Egal’s file from the firm adjusting the claim. The claimant was injured on Apr. 29, 2009, while travelling with two friends in a rental vehicle that was struck on the passenger side (Egal was sitting in the front seat). She was taken by ambulance to a Toronto hospital, where she left before receiving treatment, and was bed-ridden for six days. Egal testified she was away from work for approximately two weeks after the accident, since she could not turn her neck left or right, her chest hurt and she had back pain, knee pain and headaches. She saw a chiropractor every day until the summer of 2010. Egal originally sent her application for accident benefits in error to American Home Assurance. An adjuster from Crawford Adjusters Canada Inc. was assigned to the file. An Ontario arbitrator has awarded a $5,000 ‘special award’ against Economical Mutual Insurance Company after the company denied a claim on the basis that the claimant, Roda Egal, had not provided a reason for a delay in making her application following her injury in a motor vehicle accident. Four months after the accident, Egal’s lawyer had provided Economical a reason for the delay — confusion, basically. Approximately three months after her injury, the claimant applied for benefits to the wrong insurer, the American Home Assurance Company, which had approved her treatment plan and began to pay accident benefits. Economical subsequently took two years to obtain Egal’s file from the firm adjusting the claim. The claimant was injured on Apr. 29, 2009, while travelling with two friends in a rental vehicle that was struck on the passenger side (Egal was sitting in the front seat). She was taken by ambulance to a Toronto hospital, where she left before receiving treatment, and was bed-ridden for six days. Egal testified she was away from work for approximately two weeks after the accident, since she could not turn her neck left or right, her chest hurt and she had back pain, knee pain and headaches. She saw a chiropractor every day until the summer of 2010. Egal originally sent her application for accident benefits in error to American Home Assurance. An adjuster from Crawford Adjusters Canada Inc. was assigned to the file. In separate correspondence dated Aug. 11 and June 8, 2009, the adjuster acknowledged receipt of Egal’s application and treatment plan, which American Assurance approved in full. In late August 2009, counsel for Egal forwarded correspondence to Economical with an application for accident benefits and an authorization and direction. On Sept. 2 and 18, Economical requested the reason for Egal’s delay in reporting the claim. “On Sept. 28, 2009, Ms. Egal’s counsel forwarded an explanation for the delay to Economical stating that Economical failed in explaining Ms. Egal’s rights to her and did not provide her with an accident benefits package,” the arbitrator noted. “Therefore, her application was not forwarded until after she retained counsel.” Economical said it did not deal with Egal’s claims because of time that had elapsed between the accident and her application. Ontario accident benefits legislation requires that applicants for related benefits must notify their insurers within seven days of the accident, “or as soon as practicable afterwards.” The saving provision in the legislation is that a person is not disentitled from proceeding with a claim if the applicant has a reasonable explanation. “I find no merit in Economical’s position that it had no responsibility to adjust Ms. Egal’s file until receiving a reasonable explanation for her delay in applying,” the arbitrator ruled. “Economical received a reasonable explanation for the delay. Economical was also aware that documentation had been sent to the wrong insurer and persisted in refusing Ms. Egal’s claims long before it had received her file. “I find that Economical failed egregiously in its responsibilities to its first party insured, Ms. Egal. It did not follow up expeditiously in obtaining her file from American Assurance and it made decisions about her entitlement in its absence.”

Ontario court awards punitive damages against insurer, distinguishing between fraud and maximizing insurance recovery

Wawanesa Mutual Insurance Company employed a high-stakes litigation strategy designed to intimidate homeowners seeking damages, a choice that demands significant, but proportionate punishment, an Ontario court has ruled. In Brandiferri v. Wawanesa Mutual Insurance, et al., Ontario Superior Court Justice P.D. Lauwers dismissed the insurer’s allegations of fraud against the policyholders in a decision related to a fire at the home of Salvatore and Linda Brandiferri on Aug. 8, 2000. The fire destroyed the home’s contents and resulted in smoke penetrating the house. The Brandiferris sued Wawanesa and Strone Construction, arguing the latter is liable for deficient remedial construction work and the insurer was also liable because it selected the contractor that provided the poor work. The homeowner’s insurance policy provided “guaranteed replacement cost” coverage for the house and contents, and included a “single inclusive limit” of $564.000. Wawanesa paid slightly more than $479,000, but the Brandiferris sought $178,093.74 from Wawanesa and Strone for the house not being completely or acceptably restored. Counsel for Wawanesa submitted that the Brandiferris had brought an action without determining the amount at issue by way of appraisal. Pina Naccarato, the Brandiferris’ daughter, prepared the proofs of loss. Once completed, they were submitted to the Bradiferris’ lawyer. The proofs of loss prepared on the Brandiferris’ behalf were completed by someone who had never done these before and had no instructions on how to do so, the court determined. The court notes that everything in the house — which had earlier been taken away — was included on the list. Naccarato did not know which items were damaged. “By swearing the proof of loss, the Brandiferris swear that the items listed were destroyed in the fire,” counsel for Wawanesa submitted. As such, those statements were false. “They were not claiming these items in the context of an honest claim for indemnity, but rather in an attempt to secure the maximum payout from the policy and turn this fire as a source of gain.” Justice Lauwers notes the law in Ontario is that it is not automatically fraud for a plaintiff to put in a claim that might be seen as exaggerated. “I am not persuaded on the evidence that the Brandiferris committed fraud in preparing and filing the first or subsequent proofs of loss, even though they did seek to maximize their recovery.” Justice Lauwers determined that, in light of correspondence, it was plain that Wawanesa, through its counsel, “waived its right to insist on an appraisal, in writing, and therefore cannot now insist that it is a condition precedent to the plaintiffs’ right to recovery in this action.” The decision further notes: “The fraud allegation was late-breaking and was only made after the action was started in the statement of defence and counterclaim." Part of an insurer’s duty of utmost good faith in investigating, assessing and attempting to resolve claims must attach to the insurer’s litigation strategy against the insured when the claims is disputed, the ruling adds. Justice Lauwers calculated $108,257.78 as the amount needed to put the home in the condition it was before the fire. He ordered Wawanesa to pay $100,000 in punitive damages.

Family of Quebec man killed when a tree fell on his car should go to province's auto insurer for compensation: Supreme Court

A Quebec man killed when a tree fell on the vehicle he was driving in the City of Westmount must turn to the province’s auto insurer for compensation, the Supreme Court of Canada has ruled, thus rejecting the man’s civil lawsuit against the city. In August 2006, a tree in the City of Westmount fell on a vehicle occupied by Gabriel Anthony Rossy, killing him. His family sued the city for damages, alleging that the city, as the owner of the tree, had failed to properly maintain it. The city sought to dismiss the lawsuit, arguing that the injury resulted from an accident caused by an automobile. Therefore, any compensation should come from the no-fault benefits scheme administered by the Société de l’assurance automobile du Québec under the province’s Insurance Act. The province’s no-fault insurance scheme applies to any accidents in which injury or damage was “caused by an automobile, by the use thereof or by the load carried in or on an automobile.” The Supreme Court agreed with the city’s position. “Although the vehicle may have been stationary or moving through an intersection, the evidence on the record is that [Rossy] was using the vehicle as a means of transportation when the accident occurred,” the Supreme Court ruled, thus overturning the outcome in the Quebec Court of Appeal. “This is enough to find that the damage arose as a result of an ‘accident’ within the meaning of the act and that the nofault benefits of the scheme are triggered. Therefore, the civil claim is barred and [Rossy’s] parents and brothers must turn instead to the Société de l’assurance automobile du Québec for compensation.” Elsewhere, the court wrote: “The vehicle’s role in the accident need not be an active one. The mere use or operation of the vehicle, as a vehicle, will be sufficient for the act to apply.”

Insurers have "no choice" but to tap into social media: Accenture

The issue is not if, but how, insurers should leap into the world of social media, a new report from Accenture has concluded. “Insurers, of course, really have no choice about participating in social media,” the consulting firm noted in its study, Insurers and Social Media: Vast Potential, Significant Challenges. “With people engaged in social media all around them, the real question is how to participate.” It found the financial services industry as a whole has not generated significant social media “engagement,” although 28 insurers listed in the Fortune 500 have established Facebook pages and 20 have Twitter accounts. “Insurers are only now beginning to explore the real potential of integrated social media campaigns,” according to Accenture. The consulting firm illustrated three distinct stages for social media awareness amongst insurers: • Listen: conduct social media monitoring and analysis. • Engage: initiate marketing campaigns and customer interaction. • Optimize: link social media to customer relationship management (CRM) and building a “single view” of the customer. Accenture observed that insurers succeeding in social media will “build engagement and generate customer interest at much higher levels than many other industries. . . . “However, many insurers will need to re-examine their current IT infrastructure — particularly legacy policy administration systems — to make sure that the capabilities are in place to support (social media) initiatives at scale.”

Lawyers resign from Ontario auto insurance committee

Several lawyers are protesting recently announced changes to the definition of catastrophic injury for accident victims by quitting an auto insurance committee created by the Financial Services Commission of Ontario (FSCO). The Toronto Star reported the group of personal injury lawyers, who include Richard Halpern, partner at Thomson Rogers, Roger Oatley of Oatley Vigmond Personal Injury Lawyers LLP, Nigel Gilby, partner at Lerners LLP and Stephen Firestone of Lackman Firestone, resigned because their recommendations on catastrophic impairment were ignored. “The Ontario government is looking at narrowing the definition of catastrophic impairment,” Halpern told the Star. “This will in turn deprive many seriously injured victims of the support they reasonably need and expected from the protection they thought they were buying with their auto premium dollars.” The insurance industry “is always trying to get governments to roll back the rights of accident victims,” added Oatley. “The government will now claim they consulted with stakeholders, including lawyers and consumers. “We were invited because of our expertise, but ignored. We resigned because the process was a sham. Can you imagine, for example, that in this day and age, emotional injury has to be ignored when assessing the impact of an injury – even though our highest court recently said it should be taken into account?” The informal legal committee was established by FSCO Superintendent Philip Howell to seek advice on auto insurance. On June 12, the Ontario regulator made its recommendations to the provincial finance minister on rules for determining catastrophic impairment. FSCO supported the findings of an expert medical panel in its proposals, including not combining physical impairments with psychiatric or mental/behavioural factors for catastrophic injury, an interim status for claimants who require intensive and prolonged rehabilitation to receive immediate treatment and the use of several clinical and diagnostic tools in determining catastrophic impairment.

Big Data represents big challenge for insurance industry: study

The growth of unstructured, disparate information will create problems for insurance companies that don’t have the technology infrastructure or tools to handle it, according to a recent report from consulting firm Novarica. ‘Big Data,’ defined as data sets that are too large or complex to work with using traditional database systems, could create a broad “analytics” gap between large and midsize insurers, noted Matthew Josefowicz, Novarica’s managing director, partner and co-author of the study, Analytics and Big Data at Insurers: Current State and Expectations. “While data analysis has always been at the core of the insurance industry, legacy technology environments and business practices have inhibited the embrace of Big Data by insurers,” Josefowicz stated. “But the hype around Big Data has renewed focus on little data — traditional enterprise data and analytics — which is still an area of underinvestment for many insurers, especially midsize insurers.” In a survey of 86 insurers, 15% to 20% said they are preparing their technology infrastructure for Big Data projects. Josefowicz noted that adoption rate of technology around Big Data was “tepid” in the insurance industry and lags behind other sectors of the economy. “When it comes to Big Data areas like geospatial data, Internet clickstreams, audio data, social media content, mobile data, telematics, video data and others, usage rates are still very low,” Josefowicz commented. “And while few insurers have invested in the specialized infrastructure required to manage Big Data, a sizeable minority are planning to do so within 12 months.”

Global study shows consumer support for bank branches offering insurance

A new study from Cisco indicates 65% of respondents globally would favour bank branches offering an expanded portfolio of financial and advisory services, including insurance. The Cisco Internet Business Solutions Group (IBSG) Omnichannel Study: Winning Strategies for Omni-Channel Banking surveyed 5,300 consumers in both developed and emerging countries, including Canada, France, Germany, United States, United Kingdom, Brazil, China and Mexico. The suggestion to have bank branches offer an expanded portfolio — including financial education, legal accounting, tax and insurance — had more appeal in emerging countries than in developed countries. The expansion was supported by 56% in developed countries and 81% in emerging countries. Overall, the Cisco statement notes, “the study shows consumers want banks to deliver financial advice and banking services through both virtual and physical channels, ushering in a new era of omnichannel banking.”