April 28, 2010 by Canadian Underwriter
As of Sept. 1, 2010, as a general rule, the New Statutory Accident Benefits Schedule (SABS) enshrined in Ontario’s new auto insurance reforms “will govern claims processing relating to old accidents,” as well as “the determination of amounts payable by insurers on account of expenses paid to establish benefit entitlements arising out of old accidents,” the Financial Services Commission says in a recent bulletin.
“Old accidents” are defined in the bulletin as automobile accidents occurring on or after Nov. 1, 1996 and before Sept. 1, 2010.
Old SABS will continue to apply, however, to the calculation of benefit entitlements for old accidents.
FSCO’s bulletin outlines some of the transition rules in play when the Ontario auto insurance reforms are implemented on Sept. 1, 2010. The bulletin is available at: http://www.fsco.gov.on.ca/english/pubs/bulletins/autobulletins/2010/a-04_10.asp
Coverages and coverage limits available in accordance with the Old SABS under any automobile insurance policy in effect prior to Sept. 1, 2010 will remain unchanged until the policy expires or is terminated. “The only exception is if the named insured and insurer agree otherwise in writing,” FSCO’s bulletin notes.
In the following sample situations, New SABS will apply to the processing of old claims [A complete list is found in the bulletin.]:
• The accident benefit claim forms currently in use will no longer be approved for old claims. Only the revised forms will be approved.
• An application for determination of catastrophic impairment (OCF-19) must be prepared by a physician or, if the impairment is only a brain impairment, by a physician or neuro-psychologist.
• An assessment of attendant care needs (Form 1) must be completed by an occupational therapist or a registered nurse.
• Interest on amounts that become overdue on or after Sept.1, 2010 with respect to old accidents will accrue at the New SABS rate of 1% per month and be compounded monthly.
But in calculating benefit entitlements, Old SABS will apply to old accidents in the following scenarios (to name a few):
• Income replacement benefits will continue to be calculated at 80% of net income.
• Coverage limits (e.g., $100,000 for medical/rehabilitation benefits) will continue to be governed by the Old SABS.
• Entitlement to caregiver, housekeeping and home maintenance benefits will continue to be governed by the Old SABS.
• Attendant care benefits will continue to be based on the hourly rates that are in effect on the date of the accident.
• The “minor injury” definition, Minor Injury Guideline and $3,500 medical and rehabilitation limit referred to in the New SABS will not apply to old accidents.
• For the purposes of old accidents, references to the Minor Injury Guideline in the New SABS will be deemed to be references to the Pre-approved Framework Guidelines under the Old SABS.