Earlier this month, Ontario’s Minister of Finance introduced Bill 171, the “Fighting Fraud and Minimizing Automobile Insurance coverage Costs Act”.
In accordance to a finance ministry press release the bill includes “new initiatives to safeguard the 9 million drivers in the province”.
The Insurance Bureau of Canada, representing the car insurance industry, has issued a press release supporting the bill.
So let’s examine a few of the approaches that Ontario drivers will be “protected”.
A actual way would be by encouraging insurance coverage companies to settle situations rapidly.
But 1 provision of the bill offers an incentive for insurance organizations to delay settlements and payments to those injured in motor automobile accidents.
Bill 171 would reduce the sum of curiosity insurers are essential to shell out on money owed to accident victims.
The present fee is 5% but underneath Bill 171 the rate would fall to 1.3% and be modified quarterly.
Ontario’s finance minister says this will “help reduce claims costs.” I’m confident it will. For the insurers.
The Ontario Trial Attorneys Association, representing attorneys acting for plaintiffs, objects to the adjust.
In accordance to the OTLA, “insurers will be set to revenue especially in severe instances as they can earn better returns by delaying settlement and investing the money.” Fair Association of Victims for Accident Insurance Reform also objects to the modify stating, “there is no incentive to settle cases when insurers can make a fortune sitting on the dollars that are owed to the injured accident victim.”
Another real way to safeguard drivers is to offer arbitrators with the electrical power to penalize insurers that act unreasonably in withholding or delaying penalties.
Truly, arbitrators hearing accident benefits instances presently have that power underneath the Insurance Act.
They can award a lump sum of up to 50% of the quantity withheld or delayed, along with curiosity, at the fee of 2% compounded monthly.
Curiously, Bill 171 eliminates that power.
So far, it doesn’t seem to be supplying significantly protection to Ontario drivers.
But the centrepiece of Bill 171 is the elimination of the arbitration perform from the Financial Services Commission Ontario and giving it to Ontario’s Licence Appeal Tribunal. Surely, that is a good thing for Ontario’s drivers?
Let’s see: FSCO arbitrators have a lot of years of expertise dealing with accident benefit disputes. They are total-time, unionized public sector workers, are seen to be independent and are respected.
What about the Licence Appeal Tribunal? At present its members are element-time (other than the Associate Chair), appointed for temporary terms, receive per diem rates ranging from $ 398 to $ 664 (other than the Associate Chair), and are government appointees. Reappointment is at the pleasure of the Ontario cabinet.
What about experience? Most LAT selections relate to impoundment of vehicles and liquor licence instances, although the LAT also hears other circumstances below a lengthy checklist of legislation, none of which covers the sort of problems witnessed day-to-day by FSCO arbitrators.
So, we will be moving from expertise to no knowledge, full-time operate to element-time, job security to precarious or no occupation safety.
That does not appear to be conducive to far more safety for Ontario’s drivers.
But what is most objectionable about Bill 177 is the haste with which it has been launched — just 2 weeks following release of the Ontario Car Insurance coverage Dispute Resolution Program Assessment by J. Douglas Cunningham, a former associate chief justice of the Ontario, Superior Court of Justice.
That must be some sort of velocity record.
But with this haste there has been no possibility for input by stakeholders.
It is just as the Ontario government did in December when it modified accident rewards, efficient Feb. 1, in element to overturn a current Ontario Court of Appeal choice.
I can see in which reduction of interest charges, elimination of special awards and shunting circumstances away from skilled, independent arbitrators would benefit insurance coverage organizations.
But where is the advantage to drivers and accident victims?
Oh yes, there’s that promised 15% insurance coverage fee reduction. We’ll see.