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Mutual policyholders of The Economical vote against dissident proposal to replace board

Mutual policyholders of The Economical Mutual Insurance Company voted 649-192 on May 26 against a motion that would have removed its current board of directors and replaced it with directors named by VC & Company Advisory Ltd.

VC & Company, a Toronto firm, represented dissident mutual policyholders that questioned the current board’s commitment to demutualize.

VC & Company urged mutual policyholders to support a motion at the company’s annual general meeting in Kitchener on May 26 calling for “the removal from office, effective immediately, of all directors of Economical whose term in office would otherwise continue following completion of the meeting.”

Before the vote, the current board gave a presentation on the work it has already done toward demutualization. After the vote, the chair of a committee formed to demutualize confirmed there would be “no turning back” from the company’s plan.

Nine hundred and thirty mutual policyholders were eligible to vote at the company’s annual general meeting. One hundred and thirty-six showed up to vote in person, and 580 voted by proxy, representing 77% of the eligible voters.

Market still “mushy” for Canadian P&C industry: MSA/Baron report

Canadian property and casualty commercial writers and reinsurers are still in a soft market phase, according to the MSA/Baron Outlook Report for 2010 Q4.

“Commercial writers and reinsurers continued (and still continue) to compete in a mushy market,” the report notes.

The report publishes data showing Canadian commercial insurers had a combined ratio (COR) of 90.1%

Nova Scotia auto product review suggests raising coverage and offering ‘buy down’ option

Nova Scotia’s auto insurance review is recommending that the province raise its standard auto insurance accident benefits package from its current level of $25,000 to $50,000, and then including a provision to allow policyholders to ‘buy down’ to a basic package equal to existing Section B benefits ($25,000).

In addition, CFN Consultants (Atlantic) Inc., which is conducting a review of the province’s auto product, is suggesting the province consider the regional customization of Alberta’s minor injury protocols for use in Nova Scotia.

CFN Consultants has also recommended the province develop and price an optional tort product, which, if purchased, would mean the insured would not be subject to the province’s $7,500 cap for payments related to soft tissue injuries, and could sue for pain and suffering.

These and other recommendations are part of the Interim Report Addressing the Nova Scotia Automobile Insurance Review.

The full report can be viewed at: http://www.gov.ns.ca/autoinsurancereview/NS_Auto_Insurance_Review_Interim_Report.pdf

Claims

Slave Lake and area wildfires destroy 433 lots, damage 84 others

The Government of Alberta has posted detailed wildfire damage maps showing a total of 433 lots destroyed in the Town of Slave Lake and Municipal District of Lesser Slave River areas, with another 84 damaged.

The maps show 374 lots destroyed in the Town of Slave Lake, with another 52 damaged. In the Municipal District of Lesser Slave River, 59 lots have been destroyed and another 32 damaged.

Backflow valves 85% successful in eliminating sewer backup

Backflow valves are 85% effective in eliminating sewer backup, according to Galen Heinrichs, stormwater utility manager with the City of Saskatoon.

Moreover, in the 15% of instances in which a home experienced some sewer backup despite having a backflow valve, the backflow valve was nevertheless 96% effective in reducing damage from the event, said Heinrich.

Heinrich spoke at the Institute for Catastrophic Loss Reduction’s Basement Flooding Symposium held May 26 in Toronto.

Beginning in 2003, the City of Saskatoon implemented a bylaw requiring all new homes to have a backwater valve. Around the same time, the city implemented a flood protection program to help mitigate basement flooding and sewer-backup issues in high-risk homes.

Regulation

B.C. Privacy Commissioner says credit score use must include explicit notification to consumers

B.C.’s Office of the Information and Privacy Commissioner has ruled that Economical Mutual Insurance Company must stop collecting and using credit scores until it provides customers with appropriate notification as required by the Personal Information Protection Act (PIPA).

The order notes The Economical did include the following disclosure statement in its 2003 CSIO insurance application form: “The applicants agree that reports containing personal, credit, factual record, premium payment or claims history information may be sought or exchanged in connection with this application for insurance or renewal, extension, variation or cancellation thereof.”

But this was not adequate notice of the purposes of collection of credit information within the meaning of PIPA, the B.C. Privacy Commissioner ruled in a May 6 order.

“The consent statement on the complainant’s application form did not expressly say that credit information might be obtained for the purpose of underwriting” the order reads. “In order to satisfy the notice requirements in ss. 7(1) and 10(1)(a) of PIPA, individuals must be informed that their credit information may be collected for the purpose of assessing future risk of loss in underwriting the policy.

“Without this information, it is not reasonable to expect that a consumer would understand how Economical actually uses this information and therefore could not meaningfully consent to its collection for this purpose.”

The full order can be read at:
http://www.oipc.bc.ca/PIPAOrders/2011/OrderP11-02.pdf

Court reverses FSCO decision in Pastore, disallows double-counting of psychological/physical injuries

The Ontario Divisional Court ruled in Aviva v. Pastore that the determination of a Class 4 (marked) or Class 5 (extreme) psychological impairment under subsection (g) should not include consideration for pain associated with physical injuries.The decision reverses a Financial Services Commission of Ontario (FSCO) Appeal decision.

In Aviva and Pastore, a FSCO director delegate ruled there is no inconsistency in defining an auto injury victim as “catastrophically impaired,” even though she suffered only a single Class 4 impairment, and her physical and psychological injuries individually fell well below the 55% threshold for a person to be classified as catastrophically impaired under s.2(1.1)(f) of the province’s Statutory Accident Benefits Schedule (SABS).

The Divisional Court, in a 2-1 split, also found that the SABS, AMA Guides and the Superintendent’s Guidelines make it clear all four areas of function are to be accounted for in an assessment of catastrophic impairment.

The Divisional Court majority set aside the decision of the FSCO director’s delegate without prejudice to the matter being re-heard by a different director’s delegate or, if appropriate, Anna Pastore could make a fresh catastrophic impairment application.