May 11, 2016 by Angela Stelmakowich
Insurance adjusters will likely need to be re-educated and retrained on new medical terminology when the latest batch of Ontario auto insurance reforms – which include a revised definition catastrophic impairment – comes into force June 1, Laurie Walker, president of Walker Consulting & Auditing, said Tuesday.
“I think there’s going to be a definite need for education,” Walker told Canadian Underwriter during a break for the Insurance Institute of Ontario’s seminar on Ontario auto insurance reforms, where she was a main presenter.
“Insurance adjusters are going to have to learn a lot more about the medical terminology and how different tests work and how the implications work,” she said, noting that the test language and the basis of testing will be new for them.
Among other things, it includes new and/or updated definitions and criteria for traumatic brain injuries, amputations, ambulatory mobility, loss of vision, and mental and behavioural impairments.
“We went through a period of time where we were simply processing claims. Now we have to actually re-look at our medical fields and say, ‘Is this the correct understanding of how this definition has been worded? Am I applying it correctly?’” Walker said.
“So I do think there’s going to be a significant uptick in adjuster re-training into the medical side of things and understanding all those tests.”
A solid understanding will be key in light of the considerable changes that the reforms make to benefit levels, both for catastrophic and non-catastrophic injuries.
For non-catastrophic injuries, the existing benefits scheme allowed for $50,000 in medical and rehabilitation and $36,000 in attendant care; under the new scheme June 1, this has been combined and reduced to $65,000 in total. Optional benefits can be purchased to increase the total to $130,000.
For catastrophic injuries, the existing scheme allowed for $1 million apiece in medical and rehabilitation benefits, and in attendant care benefits; under the new scheme, this, again, has been combined and reduced to $1 million in total. Optional benefits of as much as $1 million can be purchased for a total of $2 million.
Walker’s view is “the intent is certainly to make sure that only those meeting this (catastrophic) test are going to be allowed to collect the increased limit,” said Walker. “I do think that they’ve tried very desperately to control the amount of claims that qualify for catastrophic,” she added.
What will happen in light of the fact that benefits have been substantially reduced from the existing benefits scheme? “I think the industry is certainly going to experience an influx of an attempt to get into the catastrophic levels, because the benefits have been reduced,” Walker suggested.
“Benefit reduction isn’t just about the insured or the insurer offering a less package. It’s also the insured co-sharing that risk because they’re not receiving and buying the same package that they had either,” she pointed out.
With none of the definitions having been tested, coupled with the substantial changes to the LAT (Licence Appeal Tribunal) process – in effect since Apr. 1, accident benefits disputes are handled by LAT – “I think, personally, that we will see more appeals just to see what the outcomes might be and to set that test,” Walker said.
As she sees it, there has been a big attempt made to bring “clarity around every definition and what the test and measure will be to that.”
Still, Walker said there cannot help but be some areas of grey. “I think there’s going to be that period of time where we’re going to be testing them (definitions) and having the courts make a decision surrounding that,” she told Canadian Underwriter.
Overall, “ I think it’s going to be an adapting to change model for all the players, whether you’re a broker, an agent, an underwriter, a claims person” or in a related field, she noted, simply because all the parts of the policy and all parts of the process have been impacted.
“There’s some significant, sweeping changes from all the players this time,” Walker suggested. On a positive note, she expects that “the industry as a whole is going to start operating as a full wheel” as opposed to individual spokes, focused only on their part of the process.
“When it comes to auto insurance, everyone plays a co-mingling role to the package,” Walker added.