Ontario Follows FSCO’s Lead On Auto Reform

Ontario’s reforms to the auto insurance product follow closely along the lines of what the Financial Services Commission of Ontario (FSCO) recommended in March 2009, except on one major point important to insurers — the cap on medical/ rehab benefits for non-catastrophic injuries was reduced to $50,000, and not $25,000 as initially proposed.

In total, Ontario’s department of finance unveiled a package of 41 reforms to automobile insurance in the province.

The intent of the reforms is “to streamline a number of processes for insurers and health care providers, create a less complex auto insurance system, and protect consumers while giving them more choice to buy coverage that best meets their protection needs and budgets,” the government announced in a press release.

A complete list of the government’s reforms is available at: http://news.ontario.ca/mof/en/2009/11/ontarios-proposed-auto-insurance-reforms.html

Ontario adopted several of FSCO’s initial 39 recommendations, including:

• An optional $100,000 medical and rehabilitation benefit would be introduced in addition to the existing $1-million optional benefit. Consumers would have options to increase these coverages.

• An option to reduce tort deductibles on court awards in personal injury cases to $20,000.

• A cap on medical assessment costs of $2,000 per assessment (a fee for completing forms would be capped to $200).

• Making housekeeping and home maintenance expenses and caregiver benefits optional.

• Reviewing the SABS to identify provisions that are overly complicated and could be simplified without changing the regulations.

• Limiting the availability of in-home assessments to seriously-injured claimants only.

• Prohibiting objectionable quoting practices including the use of credit scoring, delays in providing quotes, requiring written applications for quotes and certain screening techniques.

• A review, including consultation with the medical community, of the definition of “catastrophic impairment” and the court threshold for catastrophic brain injuries.

The government said it intends to implement the auto insurance reforms “as part of a regulations package that would become effective in summer 2010, and continue to explore further long-term measures.” •