A committee of the Ontario legislature has voted to conduct a “fair and balanced study” into auto insurance industry practices and trends.
The Standing Committee on General Government passed a motion on Apr. 16 to strike the select committee, which will hold public hearings and propose recommendations to the minority government. The motion was presented by NDP MPP Rosario Marchese and passed despite objections by Liberal MPP Donna Cansfield.
The mandate of the committee is wide-ranging, but will include an examination of:
• the profitability of the property and casualty industry, with an emphasis on auto insurance underwriting in Ontario;
• the adequacy of medical-rehabilitations treatment per the capped minor injury guideline;
• the current definition of “catastrophic injury;”
• the auto insurance dispute resolution system;
• the impact of fraud in the insurance industry and on insurance rates; and
• risk assessment factors of drivers and corresponding rates assigned to particular drivers.
“We’re basically saying to the government that it needs to take steps to find out why claim costs are ballooning and to get a handle on the spiraling cost of injury claims that are driving up auto premiums and hurting household budgets, especially in some areas like the GTA and others,” Marchese said to the Standing Committee on Apr. 16.
He cited a report from the Alliance of Community Medical and Rehabilitation Providers, which says 42% of treatment requests are now being rejected by insurers. In addition, in about 50% of the cases in which an independent examination has been ordered, it’s now taking longer than 30 days for the report to be produced, according to Marchese.
“Something is happening; I’d like to know what it is,” he said.
IBC has said in the past that the results of the Alliance survey should be read in the context of the province’s efforts to curb the number of fraudulent insurance claims.
Marchese, who represents the Trinity-Spadina riding in Toronto, also indicated the committee will examine “the relationship between insurance underwriters and their sales representatives and/or the role independent brokers of insurance play in the industry. This would include an in-depth look at the extent to which brokers that portray themselves as independent of insurers really are independent.”
Ontario’s Standing Committee on General Government is a three-party committee composed of nine MPPs and chaired by Liberal MPP David Orazietti.