December 6, 2017 by Staff
The government of Ontario released its Fair Auto Insurance Plan yesterday, aimed at cracking down on auto insurance fraud in the province and, in theory, lowering auto premiums for consumers.
Based on a report by David Marshall, the province’s advisor on auto insurance, the plan would standardize treatments for common auto collision injuries and establish independent examination centres to assess injuries from more serious collisions.
The province intends to launch a Serious Fraud Office in the spring of 2018, with a mandate to investigate and prosecute auto insurance fraud. It will also amend the Insurance Act to give the Financial Services Regulatory Authority (FSRA) more rule-making abilities.
Additionally, the Financial Services Commission of Ontario (FSCO) will review the risk factors used by insurers to calculate premiums to ensure drivers aren’t subjected to unfairly high rates.
Industry reaction to the announcement was swift, with Aviva Canada president and CEO Greg Somerville lauding the government’s plan to tackle fraud.
“Ontario’s decision to place treatment and care—not cash—at the heart of the recovery process must be applauded because genuinely injured claimants have one primary aim, which is to return their health and life back to normal,” Somerville said in a statement.
“We are also pleased with the commitment to establish a Serious Fraud Office in the spring of 2018, as recommended in Aviva’s recent Fraud Report 2017,” he continued. “The cost of auto insurance has nowhere to go but up if we fail to address the excessive numbers of injury claims in Ontario and the escalating costs surrounding them.”
The Insurance Bureau of Canada (IBC) also expressed support for the plan.
“We welcome this announcement and look forward to working with the government as its proposed auto insurance changes are implemented,” Kim Donaldson, vice-president of IBC’s Ontario region, said in a statement. “Comprehensive structural change is the only way to lower the cost of auto insurance for consumers.”
The reaction from the Insurance Brokers Association of Ontario (IBAO) was also supportive, but the association did express concern that the province’s plans could potentially lead to disruptive changes to auto insurance rates.
“While the IBAO supports the need for a quick and capable modern regulator that can adapt to evolving consumer needs, we are concerned about changing too much too soon without the proper control of outcomes,” the association said in a statement. “Any transition should be conducted in a controlled manner to prevent short-term swings in the market that could negatively affect consumers.”
This story was originally published by Canadian Insurance Top Broker.