Canadian Underwriter

Ontario floats regulatory changes to fight fraud

January 31, 2013   by

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The Ontario government is proposing several regulatory amendments, slated to go into effect June 1, as part of ongoing efforts to fight auto insurance fraud in the province.

The regulatory changes include:
•    Requiring insurers to provide claimants all reasons for denying a claim.
•    Giving claimants the right to receive a bi-monthly, detailed statement of benefits paid out on their behalf.
•    Increasing the role of claimants in fraud prevention (e.g. require them to confirm attendance at health clinic).
•    Making providers subject to sanctions for overcharging insurers for goods and services and banning them from asking consumers to sign blank claim forms.

The changes come in part as a response to the final report from the Auto Insurance Anti-Fraud Task Force. That report outlined about 40 recommendations for fighting fraud, which many in the insurance industry consider a major problem that leads to much higher premiums for all Ontario drivers.

“The importance of our auto insurance reforms and the impact they will have on Ontario drivers cannot be underestimated,” Finance Minister Dwight Duncan noted in a January government statement. “The government will continue to take the necessary steps to crack down on fraud which will help lower premiums, increase road safety and ensure people hurt in car accidents get the treatment they need.”

The Insurance Brokers Association of Ontario commended the government on its first steps in implementing the report recommendations.

“IBAO is pleased to see that action is being taken with the initial first steps announced today,” IBAO CEO Randy Carroll commented. “However, there is still much more to do in order to tackle the fraud problem in Ontario auto insurance.”

In related news, the ability for the Financial Services Commission of Ontario (FSCO) to impose administrative monetary penalties (AMPs in the province’s insurance sector went into force January 1, a long-considered move that has been applauded by some within the industry.

In the 2012 Ontario Budget, the government announced that it would implement AMPs in the insurance sector as a way for FSCO to promote compliance and address violations of its regulations.