Insurance companies had better prepare for the effects of the Ontario insurance regulator's stated intent to clear a backlog of mediation cases.
Eric Grossman, a founding partner of Zarek Taylor Grossman Hanrahan LLP, moderated a panel discussion about the case backlog at the 45th Annual Canadian Insurance Claims Managers Association (CICMA)/ Canadian Independent Adjusters' Association (CIAA) Ontario Chapter Joint Conference on Feb. 7, 2012 in Toronto.
Grossman noted there is a mediation backlog of roughly 34,000 cases in Ontario.
Insurers have noted that the case backlog has made it difficult to determine the precise impact of Ontario's 2010 auto insurance reforms, since their claims costs are tied to the final outcome of the cases.
The Financial Services Commission of Ontario (FSCO) recently sent a letter warning insurance companies to, in Grossman's words, "batten down the hatches," because they are going to be helping to clear the backlog.
"Everyone needs to manpower-up to be able to handle it on [the insurers'] end, because we are going to move this elephant through the snake," as Grossman put it.
Philippa Samworth, a partner at Dutton Brock, said the FSCO notice might cause insurers to think about retaining enough legal counsel to help FSCO's push forward. The notice, she said, "went to users of the system, frequently flyers, telling us that you better hire 50 lawyers to deal with all of this stuff because they [at FSCO] are not going to let us get away with saying we are not available," she said.
Becky Cameron, claims manager at Aviva Canada, questioned the impact FSCO's push would have on the overall process. She noted FSCO is already exerting pressure on insurers to "just get it done, get it settled."
Exerting even more pressure to resolve the backlog may in fact be harming the unbiased nature of mediation, she observed.
"That unbiased perspective, as far as the mediation, isn't happening now," she said. "You increase that [pressure] and quadruple the amount of effort that is there, I think that you are going to have sacrifice quality - even more so."