Ontario auto insurance rate filings approved during 2011 Q2 - from Apr. 1, 2011 to June 30, 2011 - averaged an increase of 1%, based on the entire market, according to the Financial Services Commission of Ontario (FSCO).
For the 29.59% of the market that had rate changes approved in 2011 Q2, the average rate change was a 3.36% increase when weighted by market share.
Rate changes approved in the second quarter of 2011 become effective in the second quarter or later.
Among the 24 filings approved in 2011 Q2, only one company, The Dominion, received an approved rate decrease (-0.02%).
Tokio Marine and Nichido Fire Insurance Company, with a market share of 0.01%, and Lombard General Insurance Company of Canada, with a .94% market share, were approved for the largest rate increases for 2011 Q2 - a 14.76% increase for Tokio and a 13.63% increase for Lombard.
The Top 5 companies ranked by market share that applied for rate increases in 2011 Q2 received the following rate approvals:
1) The Dominion
Market Share (5.33%)
Rate Approval: -0.02%
2) Aviva Insurance Company of Canada
Market Share (4.65%)
Rate Approval: +0.03%
3) Allstate Insurance Company of Canada
Market Share (3.24%)
Rate Approval: +5.86%
4) Nordic Insurance Company of Canada
Market Share (3.03%)
Rate Approval: +9.70%
5) Traders General Insurance Company
Market Share (2.5%)
Rate Approval: -0.05%
Tuesday, July 19, 2011
Friday, July 15, 2011
Legal counsel for AB claimant not required to docket hours to receive credit at upper end of scale for hours worked: FSCO arbitrator
Legal counsel representing claimants in Ontario arbitrations are not required to docket their hours in order for claimants to receive their legal expenses at the high range of the scale determining hours worked, an Ontario arbitrator has ruled.
In Kamal Gogna and State Farm Mutual Insurance Company, an arbitrator at the Financial Services Commission of Ontario (FSCO) granted the insurance claimant Gogna his legal expenses of $12,000. The sum was based on 100 hours of work by two lawyers, multiplied by the counsel fee of $120 per hour.
In making his decision, the arbitrator rejected the insurer's argument that the 100 hours of legal work for which the claimant sought to be reimbursed was too high and should have been docketed by the law firm.
Gogna was injured in a motor vehicle accident in April 2004 and received accident benefits from State Farm. A dispute arose concerning his entitlement to an income replacement benefit.
An arbitration date was set, but the arbitration did not go to a hearing. Instead, the insurer settled with Gogna, who received his income replacement benefits.
The insurer noted the arbitration was not complex and did not raise any new issues of law. Therefore, since legal counsel for Gogna did not document their hours, they should not be entitled to claim their expenses at the high range of a standard scale used to calculate legal hours.
"Counsel for the applicant indicated that the lawyers at the firm do not docket their hours, noting however that 100 hours includes time for two lawyers to prepare for the hearing set in May 2010 (which was adjourned) and for one lawyer to prepare for the hearing set for October 2010," FSCO arbitrator Alec Fadel wrote. "It was also submitted that the significant amount of time a law clerk and junior lawyer had put into the file was not being claimed."
Fadel calculated the 100 hours based on a standard 3:1 ratio of days spent preparing for an arbitration against the number of actual arbitration hearing days. In this instance, the hearing (later adjourned because of the settlement) was scheduled to last four days.
Ratios used in arbitration decisions to estimate preparation time range from 1:1 to 4:1, with 4:1 usually being the uppermost level of the scale.
"I reject the insurer's suggestion that since the applicant has not provided dockets of their hours they should not be entitled to a ratio of 3:1," Fadel ruled.
"Rule 79.2(c) of the Dispute Resolution Practice Code (DRPC) lists examples of supporting documentation that must be provided. The Rule does not make mandatory that applicant's counsel keep dockets in order to be reimbursed at a higher rate, it merely indicates that if dockets are kept they must be provided.
"Also, I note that insurer's counsel has not provided me with their docketed hours, which would have assisted in my determination of a reasonable number of hours to permit."
In Kamal Gogna and State Farm Mutual Insurance Company, an arbitrator at the Financial Services Commission of Ontario (FSCO) granted the insurance claimant Gogna his legal expenses of $12,000. The sum was based on 100 hours of work by two lawyers, multiplied by the counsel fee of $120 per hour.
In making his decision, the arbitrator rejected the insurer's argument that the 100 hours of legal work for which the claimant sought to be reimbursed was too high and should have been docketed by the law firm.
Gogna was injured in a motor vehicle accident in April 2004 and received accident benefits from State Farm. A dispute arose concerning his entitlement to an income replacement benefit.
An arbitration date was set, but the arbitration did not go to a hearing. Instead, the insurer settled with Gogna, who received his income replacement benefits.
The insurer noted the arbitration was not complex and did not raise any new issues of law. Therefore, since legal counsel for Gogna did not document their hours, they should not be entitled to claim their expenses at the high range of a standard scale used to calculate legal hours.
"Counsel for the applicant indicated that the lawyers at the firm do not docket their hours, noting however that 100 hours includes time for two lawyers to prepare for the hearing set in May 2010 (which was adjourned) and for one lawyer to prepare for the hearing set for October 2010," FSCO arbitrator Alec Fadel wrote. "It was also submitted that the significant amount of time a law clerk and junior lawyer had put into the file was not being claimed."
Fadel calculated the 100 hours based on a standard 3:1 ratio of days spent preparing for an arbitration against the number of actual arbitration hearing days. In this instance, the hearing (later adjourned because of the settlement) was scheduled to last four days.
Ratios used in arbitration decisions to estimate preparation time range from 1:1 to 4:1, with 4:1 usually being the uppermost level of the scale.
"I reject the insurer's suggestion that since the applicant has not provided dockets of their hours they should not be entitled to a ratio of 3:1," Fadel ruled.
"Rule 79.2(c) of the Dispute Resolution Practice Code (DRPC) lists examples of supporting documentation that must be provided. The Rule does not make mandatory that applicant's counsel keep dockets in order to be reimbursed at a higher rate, it merely indicates that if dockets are kept they must be provided.
"Also, I note that insurer's counsel has not provided me with their docketed hours, which would have assisted in my determination of a reasonable number of hours to permit."
Monday, July 4, 2011
Licensed medical doctors, neuropsychologists should lead catastrophic impairment assessment: panel recommendation
Ontario's Catastrophic Impairment Panel is calling for medical doctors or doctorate-level neuropsychologists (in the case of brain injuries) to be the lead evaluators in the assessment of people with catastrophic impairments arising from auto injuries.
FSCO established the panel of medical experts last year to produce recommendations on the definition of a ‘catastrophic impairment' under the Statutory Accident Benefits Schedule (SABS).
FSCO also asked the panel of medical experts to provide recommendations on the training, qualifications and experience of assessors who conduct catastrophic impairment assessments for auto accident benefits. The panel's full report on the training, qualifications and experience of cat assessors can be found at:
http://www.fsco.gov.on.ca/english/insurance/auto/reform/documents/CAT_Report_PhaseII.pdf
The expert panel recommends that a lead evaluator be responsible for overseeing the catastrophic impairment assessment process.
Doctors or neuropsychologists acting as lead evaluators should have at least five years of licensing or registration in Canada, the panel recommends. Doctors must be licensed to practice by one or more Canadian Colleges of Physicians and Surgeons.
The panel also recommends that "all clinicians involved in the assessment of catastrophic impairment be trained, depending on their scope of practice, in the use of the American Spinal Injury Association (ASIA) classification for spinal cord injury, Extended Glasgow Outcome Scale (GOS-E) for traumatic brain injury in adults, the Spinal Cord Independence Measure for ambulation disorders, the Global Assessment of Functioning (GAF) for psychiatric disorders and/or the American Medical Association's (AMA) Guides to the Evaluation of Permanent Impairment, 4th edition for the assessment or physical impairments."
The panel has called on Ontario's auto insurance regulator, the Financial Services Commission of Ontario (FSCO), to develop transition guidelines while training is being implemented.
FSCO established the panel of medical experts last year to produce recommendations on the definition of a ‘catastrophic impairment' under the Statutory Accident Benefits Schedule (SABS).
FSCO also asked the panel of medical experts to provide recommendations on the training, qualifications and experience of assessors who conduct catastrophic impairment assessments for auto accident benefits. The panel's full report on the training, qualifications and experience of cat assessors can be found at:
http://www.fsco.gov.on.ca/english/insurance/auto/reform/documents/CAT_Report_PhaseII.pdf
The expert panel recommends that a lead evaluator be responsible for overseeing the catastrophic impairment assessment process.
Doctors or neuropsychologists acting as lead evaluators should have at least five years of licensing or registration in Canada, the panel recommends. Doctors must be licensed to practice by one or more Canadian Colleges of Physicians and Surgeons.
The panel also recommends that "all clinicians involved in the assessment of catastrophic impairment be trained, depending on their scope of practice, in the use of the American Spinal Injury Association (ASIA) classification for spinal cord injury, Extended Glasgow Outcome Scale (GOS-E) for traumatic brain injury in adults, the Spinal Cord Independence Measure for ambulation disorders, the Global Assessment of Functioning (GAF) for psychiatric disorders and/or the American Medical Association's (AMA) Guides to the Evaluation of Permanent Impairment, 4th edition for the assessment or physical impairments."
The panel has called on Ontario's auto insurance regulator, the Financial Services Commission of Ontario (FSCO), to develop transition guidelines while training is being implemented.
FSCO identifies consideration of administrative monetary penalties as priority
The Financial Services Commission of Ontario (FSCO) has made implementing administrative monetary penalties a priority.
In its Statement of Priorities & Strategic Directions, FSCO said it will work with the Ministry of Finance to enhance regulatory effectiveness by considering the enforcement tool of administrative monetary penalties in insurance.
Such a system would allow the regulator to levy fines, for example, without having to proceed by way of a quasi-criminal tribunal, as is now required by legislation.
Other priorities identified by the regulator include:
• conducting market conduct audit reviews of compliance with the 2010 auto insurance reforms, including Statutory Accident Benefits;
• working with stakeholders to identify measures addressing fraud and abuse in auto insurance industry;
• undertaking long-term initiatives extending from the 2010 auto insurance reforms - including a new Minor Injury Treatment Protocol, a new catastrophic impairment definition and a closed claims study; and
• performing market conduct review of suitability of product recommendations for insurance.
FSCO said it would be working with the auto insurance industry to conduct a study of closed auto insurance claims.
"Many existing data sources do not provide a detailed breakdown of claims costs," the report says. "The results of the study will assist industry and government actuaries in properly assessing the impact of past and future auto insurance reforms."
The market conduct review will determine how the insurance industry is ensuring that consumers are empowered to make informed decisions and are presented with suitable product recommendations.
"The focus of the review will be to understand and assess the process agents use in making recommendations to consumers and the processes in place at insurance companies when developing and distributing products," the report says.
In its Statement of Priorities & Strategic Directions, FSCO said it will work with the Ministry of Finance to enhance regulatory effectiveness by considering the enforcement tool of administrative monetary penalties in insurance.
Such a system would allow the regulator to levy fines, for example, without having to proceed by way of a quasi-criminal tribunal, as is now required by legislation.
Other priorities identified by the regulator include:
• conducting market conduct audit reviews of compliance with the 2010 auto insurance reforms, including Statutory Accident Benefits;
• working with stakeholders to identify measures addressing fraud and abuse in auto insurance industry;
• undertaking long-term initiatives extending from the 2010 auto insurance reforms - including a new Minor Injury Treatment Protocol, a new catastrophic impairment definition and a closed claims study; and
• performing market conduct review of suitability of product recommendations for insurance.
FSCO said it would be working with the auto insurance industry to conduct a study of closed auto insurance claims.
"Many existing data sources do not provide a detailed breakdown of claims costs," the report says. "The results of the study will assist industry and government actuaries in properly assessing the impact of past and future auto insurance reforms."
The market conduct review will determine how the insurance industry is ensuring that consumers are empowered to make informed decisions and are presented with suitable product recommendations.
"The focus of the review will be to understand and assess the process agents use in making recommendations to consumers and the processes in place at insurance companies when developing and distributing products," the report says.
Canada launches public consultations on the regulation of P&C demutualizations
The Department of Finance Canada has wasted no time launching its anticipated public consultation on the demutualization of Canadian property and casualty insurance companies, setting the deadline for submissions on July 31, 2011.
The Finance Department committed to establishing regulations for the demutualization of a Canadian P&C insurance company in its budget, released on June 6. The government officially launched public consultations on June 30.
The proposed regulatory framework is a required step before The Economical Mutual Insurance Company may proceed with its plan to demutualize.
Assuming mutual policyholders approve the company's plan, The Economical would be the first Canadian property and casualty insurance company to demutualize under the Canadian Insurance Companies Act.
But the company and its mutual policyholders must first wait until the federal government establishes a regulatory framework for the demutualization of a P&C insurer. Currently, no such regulations exist.
Finance Minister Jim Flaherty has said publicly that no Canadian P&C insurer will be allowed to demutualize until regulations are in place. The public consultation is the first step in that process.
The timing of the public consultations was a wild card in whether the regulations might be in place by the end of 2011 or in early 2012. The company has said it would be ready to present a concrete proposal for demutualization to its mutual policyholders within six months after the introduction of the new regulations.
The Finance Department committed to establishing regulations for the demutualization of a Canadian P&C insurance company in its budget, released on June 6. The government officially launched public consultations on June 30.
The proposed regulatory framework is a required step before The Economical Mutual Insurance Company may proceed with its plan to demutualize.
Assuming mutual policyholders approve the company's plan, The Economical would be the first Canadian property and casualty insurance company to demutualize under the Canadian Insurance Companies Act.
But the company and its mutual policyholders must first wait until the federal government establishes a regulatory framework for the demutualization of a P&C insurer. Currently, no such regulations exist.
Finance Minister Jim Flaherty has said publicly that no Canadian P&C insurer will be allowed to demutualize until regulations are in place. The public consultation is the first step in that process.
The timing of the public consultations was a wild card in whether the regulations might be in place by the end of 2011 or in early 2012. The company has said it would be ready to present a concrete proposal for demutualization to its mutual policyholders within six months after the introduction of the new regulations.
Friday, June 24, 2011
Privacy Commissioner audit finds Staples did not wipe data storage devices prior to resale
Canada's Privacy Commissioner has called on Staples Business Depot to review and improve compliance with its own privacy policies and procedures after an audit found the company had re-sold computers, hard drives and electronic memory devices without first wiping personal information from them.
In an audit report released on June 21, the privacy commissioner noted its audit of Staples had tested 149 data storage devices, including laptop and desktop computers, USB and internal hard drives, memory sticks and memory cards.
"The audit shows that Staples did not ensure data storage devices are wiped of all customer data prior to resale," the privacy commissioner concluded in its report. "In summary, we found that 54 of the 149 devices tested contained customer data.
"A number of these devices contained personal information that included government-issued identification numbers, email messages, personal correspondence and photographs, immigration documents, resumés, financial statements, custodial arrangements and personal contact lists."
The privacy commissioner noted Staples does have a corporate policy requiring that a vendor's personal information be wiped and removed from electronic devices prior to re-sale. Staples strengthened these policies after a 2009 investigation by the privacy commissioner into the same issue.
"While the revised procedures include key control mechanisms, they are not consistently applied," the report of the privacy commissioner found. "In 15 of the 17 stores audited, we noted instances where data storage devices were:
• resealed and verified as being wiped when such was not the case;
• not verified by a manager prior to being restocked; or,
• sent directly to the RTV [return to vendor] bin without being processed (wiped) by a technician."
In an audit report released on June 21, the privacy commissioner noted its audit of Staples had tested 149 data storage devices, including laptop and desktop computers, USB and internal hard drives, memory sticks and memory cards.
"The audit shows that Staples did not ensure data storage devices are wiped of all customer data prior to resale," the privacy commissioner concluded in its report. "In summary, we found that 54 of the 149 devices tested contained customer data.
"A number of these devices contained personal information that included government-issued identification numbers, email messages, personal correspondence and photographs, immigration documents, resumés, financial statements, custodial arrangements and personal contact lists."
The privacy commissioner noted Staples does have a corporate policy requiring that a vendor's personal information be wiped and removed from electronic devices prior to re-sale. Staples strengthened these policies after a 2009 investigation by the privacy commissioner into the same issue.
"While the revised procedures include key control mechanisms, they are not consistently applied," the report of the privacy commissioner found. "In 15 of the 17 stores audited, we noted instances where data storage devices were:
• resealed and verified as being wiped when such was not the case;
• not verified by a manager prior to being restocked; or,
• sent directly to the RTV [return to vendor] bin without being processed (wiped) by a technician."
Accident benefits not selected are not "available" to an insured; cannot be deducted from past income loss in tort
When an Ontario insured is required by law to select one of three statutory accident benefits, the benefits they do not select are not "available" to them. Therefore, they cannot be deducted from a claim for past income loss in a bodily injury action.
The Ontario Court of Appeal thus overturned a lower court ruling, which found a defendant in a tort case might indeed make such a deduction, in Sutherland v. Singh, released on June 22.
Section 267.8(1) of the Ontario Insurance Act provides that in an action for a loss or damage from bodily injury in an auto accident, the damages to which a plaintiff is entitled shall be reduced by payments for statutory accident benefits that the plaintiff has either received, or that were "available" to them.
The law is intended to prevent "double recovery," in which a plaintiff recovers from a defendant in tort and also receives accident benefits for a past income loss.
The plaintiff in this case, Derrick Sutherland, was rear-ended by defendant Gurmeet Singh. Sutherland has a wife and three children.
At the time of the accident, Sutherland was employed full-time as a machine operator at Winpack. He claimed he was temporarily unable to return to work and therefore perform caregiving duties for his three children.
Under s. 36(1) of the regulations for the Insurance Act, Sutherland must choose one out of three benefit options for lost income: an income replacement benefit (IRB), a non-earner benefit and a caregiver benefit (CGB).
The non-earner benefit did not apply, since Sutherland was working at the time. He elected to receive the caregiving benefits.
He later issued a statement of claim in which he claimed for past income loss, among other things. The defendants sought to deduct from Sutherland's past income loss the value of the income replacement benefits that Sutherland did not select.
Even though Sutherland chose to receive the caregiving benefits, the defendants argued, the IRBs were also "available" to the plaintiff at the time of the choice.
A lower court agreed with the defendants, but the Appeal Court overturned the finding.
The defendants' argument, "ignores the underlying purpose of s. 267.8, which is to prevent plaintiffs from double recovery for their losses," the Appeal Court concluded. "If the defendants' argument is correct, they will be entitled to both CGBs, which Mr. Sutherland received, and IRBs, which he never received.
"This would lead to a situation in which Mr. Sutherland is undercompensated and the defendants would receive a windfall. This would not be a fair result and it cannot have been intended."
The Ontario Court of Appeal thus overturned a lower court ruling, which found a defendant in a tort case might indeed make such a deduction, in Sutherland v. Singh, released on June 22.
Section 267.8(1) of the Ontario Insurance Act provides that in an action for a loss or damage from bodily injury in an auto accident, the damages to which a plaintiff is entitled shall be reduced by payments for statutory accident benefits that the plaintiff has either received, or that were "available" to them.
The law is intended to prevent "double recovery," in which a plaintiff recovers from a defendant in tort and also receives accident benefits for a past income loss.
The plaintiff in this case, Derrick Sutherland, was rear-ended by defendant Gurmeet Singh. Sutherland has a wife and three children.
At the time of the accident, Sutherland was employed full-time as a machine operator at Winpack. He claimed he was temporarily unable to return to work and therefore perform caregiving duties for his three children.
Under s. 36(1) of the regulations for the Insurance Act, Sutherland must choose one out of three benefit options for lost income: an income replacement benefit (IRB), a non-earner benefit and a caregiver benefit (CGB).
The non-earner benefit did not apply, since Sutherland was working at the time. He elected to receive the caregiving benefits.
He later issued a statement of claim in which he claimed for past income loss, among other things. The defendants sought to deduct from Sutherland's past income loss the value of the income replacement benefits that Sutherland did not select.
Even though Sutherland chose to receive the caregiving benefits, the defendants argued, the IRBs were also "available" to the plaintiff at the time of the choice.
A lower court agreed with the defendants, but the Appeal Court overturned the finding.
The defendants' argument, "ignores the underlying purpose of s. 267.8, which is to prevent plaintiffs from double recovery for their losses," the Appeal Court concluded. "If the defendants' argument is correct, they will be entitled to both CGBs, which Mr. Sutherland received, and IRBs, which he never received.
"This would lead to a situation in which Mr. Sutherland is undercompensated and the defendants would receive a windfall. This would not be a fair result and it cannot have been intended."
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