Ontario auto reform a big achievement, says IBC

Great changes occurred in 2009, according to IBC

Ontario’s auto insurance industry led the way for change in 2009, including customized policies for consumers, a new driver distraction legislation and a Health Claims for Auto Insurance system, reported the Insurance Bureau of Canada (IBC) at the Annual General Meeting (AGM) on April 27, 2010.

 ”It’s one year later, and while insurers are still suffering financially, IBC has, in one short year, affected significant positive change that will help Canada’s P&C insurers overcome many of the obstacles that lie ahead,” Rowan Saunders, chair of IBC, said at the meeting.

 One of the most significant changes for association itself was the appointment of new president and CEO, Don Forgeron, who took the reins exactly one year ago.

 Forgeron came on board amidst a year of financial turmoil for the insurance industry, especially for Ontario auto insurers. Other key issues included an unstable economy, severe weather conditions, and minor injury cap challenges.

 Ontario Auto

 In Ontario, auto reform will take effect on September 1, 2010, and allow Ontario consumers to customize their auto insurance policies–building on a new “standard” insurance package– in order to meet individual needs.

 The reforms also address growing claims costs, said Saunders, noting that, “the huge problem of the over-assessment of injuries has been addressed through some important amendments to how claims are managed, including the implementation of a cap of $3,500 on minor injury medical-rehabilitation expenses.”

 Also in Ontario, IBC influenced the creation of Ontario’s new driver distraction legislation, which came into effect October 2009, and prohibits the use of all electronic hand-held devices while driving.

 Lastly, the launch of a new Health Claims for Auto Insurance (HCAI) system last September will provide information and training support to insurers and health care providers.

 ”The system completed its pilot program earlier this year, and evidence from user surveys conducted after the completion is clear and conclusive: HCAI works,” said Saunders. “Both insurers and health care providers have shown overwhelming support for the system, which has slowly expanded its user base without incident.”

 Full operation of the HCAI system is scheduled for the end of 2010. 

 Fraud Management

 Insurance fraud remains a challenge nationwide, especially within the auto insurance industry.

 Saunders said that IBC’s Investigative Services Division continues to fight for tougher penalties for insurance crime delinquents.

 A breakthrough occurred in 2009 when the Toronto Police Service charged six individuals who were involved in an alleged auto theft ring under the Criminal Code.

 ”These public policy victories for IBC may be the result of good government relations,” added Saunders. “But there is little doubt that good government relations depend upon good consumer relations, and here once again the association excelled.”

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