Government needs to reform cat impairment definition: IBC

IBC responds to recent Ontario Court of Appeal decision

The recent Ontario Court of Appeal decision that could broaden the definition of catastrophic impairment highlights the need for the Ontario government to bring in reform, said Ralph Palumbo, vice president, Ontario, Insurance Bureau of Canada (IBC).

Read: Ontario Court ruling broadens definition of catastrophic impairment 

Recent decisions such as this one, he said, have left little clarity in the definition of  catastrophic impairment outlined in the Statutory Accident Benefits Schedule’s (SABS).

“As it stands now, the law changes with every decision that’s out there and where’s the clarity in that?” Palumbo told Canadian Insurance Top Broker.  “How are people to know whether they fit into that category or not? How are claimants to know? How are insurers to know?”

Palumbo said the ruling will “absolutely” have an effect on the insurance industry, and, ultimately, consumers will be the most affected by the decision.

Read: IBC has strong words for opponents of updated cat definition

“Any assumptions made by insurers in terms of cost based on the SABS definition of catastrophic impairment is now out the window,” he said. “It’s really difficult now for insurers to get any sense of how they’re supposed to cost out that benefit. That of course has an effect on premiums. Consumers, at the end of the day, are going to be the losers.”

Palumbo said the government needs to implement recommendations made by the Expert Panel.

“We think that it’s now, more than ever, time for the government to bring in reforms based on the Expert Panel’s report, he said. “What the goal should be is to make sure that there is a clear, unambiguous, science-based definition that’s objective, so that it’s absolutely clear when one assesses a claim as to whether a person has suffered a CAT impairment or not.”

Palumbo said the IBC will continue to lobby the government to bring in reform.

“If there’s certainty and an objective definition, transaction costs will go down. And if they go down, premiums will follow,” he added.

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