Accident victims group, Ontario PC critic call for reform of auto insurers’ medical assessments

Both the Fair Association of Victims for Accident Reform (FAIR) and an opposition critic have taken issue with Bill 171, which proposes several changes to auto insurance regulations, by suggesting the bill does not address the issue of claims disputes over insurers’ medical assessments.

“Fix the quality of the insurer assessments and impose qualification criteria on the insurers’ preferred medico-legal assessors and the reports on which our courts rely will instantly improve,” FAIR stated Friday in a press release.

“System costs will drop. Cases will move through quicker in a system not clogged with tactical – but wrongful – denials of legitimate injury claims.”

FAIR, an advocacy group representing people injured in vehicle collisions, was reacting to Bill 171, which the ruling minority Liberal government tabled at Queen’s Park March 4.

If passed into law with no amendments, Bill 171 would change the Insurance Act, the Financial Services Commission of Ontario Act, the Licence Appeal Tribunal Act, the Motor Vehicle Accident Claims Act and the Repair and Storage Liens Act.

Bill 171, which would change the dispute resolution system, was tabled two weeks after the release of the Ontario Automobile Dispute Resolution System (DRS) Review, written by J. Douglas Cunningham, former associate chief justice of the Ontario Superior Court.

Among other things, Cunningham recommended the government appoint a “public sector administrative tribunal” for dealing with auto insurance disputes. He also recommended that the tribunal fall under a Cabinet minister instead of the superintendent of financial services.

The Ontario government is acting on that recommendation by proposing, in Bill 171, to move the DRS from the Financial Services Commission of Ontario (FSCO) to the Ministry of the Attorney General.

“This move would help create a more streamlined DRS, and a more streamlined DRS would help ensure that the system operates more efficiently and effectively, and remains accessible for accident victims,” Finance Minister Charles Sousa said in the legislature March 4. “This is an important step towards reducing consumer frustration as well as uncertainty and costs.”

Bill 171 would also “establish a transition strategy for the licensing of health service providers that bill auto insurers,” Sousa added. “If passed, only licensed providers will get paid directly by insurers – a key anti-fraud initiative.”

Sousa noted that Bill 171 “proposes to modernize licensing and disciplinary hearings for insurance agents and adjusters.” If it is passed into law, Sousa said, “FSCO would have the authority to revoke or immediately suspend the licences of agents and adjusters who act improperly and put the public at risk.”

But FAIR criticized the government for not addressing insurers’ medical assessments.

“We have watched the stakeholders and the legislators and their foremost experts spend two decades trying to get the Ontario auto insurance system to run right – but they have repeatedly and stubbornly ignored the key problem –  the poor quality of the medico-legal assessments that fuel the disputes which backlog the system,” FAIR stated in a release March 7.

The Progressive Conservative finance critic, Vic Fedeli, also suggested the government needs to address the issue of insurers’ medical assessments in auto claims.

The PC party “suggested a truly independent third party injury-assessment protocol in order to clarify injuries and mitigate the demands for mediation in the first place,” Fedeli said in the legislature March 4. That, he added, “is missing” from Bill 171.

Bill 171 changes the “prejudgment interest rate on general damages for pain and suffering” in auto claims, from the current 5% – which Sousa noted is “not linked to market conditions” and has not been updated since 1990. With Bill 171, the government is “proposing to lower this interest rate by linking it to market conditions.”

Sousa added the “current rate for economic damages … is linked to the Bank of Canada interest rate” at 1.3% per year.

But the proposed change to the prejudgment interest rate is opposed by the Ontario Trial Lawyers Association (OLTA), which contends that insurance carriers could  “earn greater returns by delaying settlement and investing the funds.”

FAIR echoed the OLTA’s concerns.

“There is no incentive to settle cases when insurers can make a fortune sitting on the dollars that are owed to the injured accident victim,” FAIR stated. “Reducing the rate paid out is another incentive for some unscrupulous insurers to create more delay (often through a bogus IME/IE)- not a disincentive to fraud.”

In 2012, FAIR had called on the Ontario government to take action against what FAIR calls “substandard” independent medical exams.

After the November 2012 release of the final report of the Ontario Automobile Insurance Anti-Fraud Task Force Steering Committee, FAIR chair Rhona DesRoches had said that doctors with multiple complaints against them will not necessarily have their names published by the College of Physicians and Surgeons of Ontario (CPSO).

In its report, the Anti-Fraud Task Force Steering Committee recommended in 2012 that the province require Ontario auto insurance carriers to disclose publicly how they choose and assess the performance of businesses and professionals they recommend or refer consumers to see, such as independent medical examiners (IMEs).

The steering committee noted at the time that IMEs are “often regarded with suspicion” and that the professional colleges should prescribe “best practices for maintaining professional independence and a reputation for fairness.” The task force also recommended a process for reviewing complaints and imposing sanctions, where professional colleges find that those conducting examinations “do not deserve the public’s trust.”

On March 7, FAIR noted that the anti-fraud task force had recommended in 2012 that “the insurance industry jointly develop standards for the delivery of third-party medical examinations, as well as qualifications” for those conducting the examinations. 

“I understand that this recommendation has not been implemented to date,” FAIR stated. “If we could remove all of the legitimately injured accident victims in the system whose claims have been wrongfully denied on the basis of a poor quality medical report – the preposterous wait times and high costs would be greatly reduced.”