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Insurance Bureau calls for ‘tough measures’ in Ontario to fight auto claims fraud


June 18, 2014   by Greg Meckbach, Associate Editor


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Now that the Ontario Liberals have been returned to power with a majority government, the Insurance Bureau of Canada is urging the provincial government to re-introduce Bill 171, which died on the order paper when the election was called last month.

During a speech in Toronto Wednesday, IBC president and chief executive officer Don Forgeron described Bill 171, known as the Fighting Fraud and Reducing Automobile Insurance Rates Act, as “a bold step toward affordable auto insurance.”

Forgeron also suggested IBC plans this fall to provide the industry with “greater detail” on recommendations to address auto claims fraud, distracted driving and educating consumers on auto coverage in Ontario.

“In the months ahead, we intend to support the government with actions that will address what consumers have told us they want in an auto insurance system,” such as lower premiums, Forgeron told attendees at the Economic Club of Canada. He added IBC “will be exploring … how to close down the many opportunities for fraud and abuse in the system.”

Other issues IBC plans to “explore,” Forgeron said, include “how to provide meaningful incentives for safe driving,” as well as how to “put an end” to distracted driving and how the industry can help consumers “better understand that they have options” when buying auto coverage.

“While I don’t have every detail of our work in these areas, I can tell you today that this represents a skeleton of our direction forward,” Forgeron said. “In the fall we will be providing you with greater detail.”

Before the legislature was dissolved in May, the Liberals only held 48 seats out of 107 at Queens Park. The June 12 provincial election was called after both the New Democratic Party and the Progressive Conservatives declared they would not vote in favour of the 2014-15 budget, which Liberal Finance Minister Charles Sousa tabled May 1.

In essence, any bill that was not passed into law before the dissolution of the legislature would not become law unless it is tabled again. Bill 171, which passed second reading April 14, proposed to allow only licenced health care providers to be paid on auto claims directly by insurance carriers. 

The bill also had proposals to regulate towing and storage providers. For example, Sousa proposed to give the government the authority to “reduce the number of days, currently at 60, within which a storer has to give notice, where required, to owners of vehicles and still claim a lien.”

Bill 171 “was a good example of how government can bring forward measures that reduce costs to achieve rate stability,” Forgeron said Wednesday, adding the proposed law was an attempt to “stem the flow of money from injured motorists to those who profit from the benefits provided by the auto product through their criminal and abusive practices.”

Forgeron was quick to add that not all medical rehabilitation providers are abusive or fraudulent.

But he emphasized that Ontario consumers want lower auto rates.

“We need tough measures against those who take advantage of the system,” Forgeron said. “We need innovation that rewards safe drivers and places fair but aggressive penalties on dangerous driving. And we need educated consumers who know their insurance rights and options.”  

In Ontario, Forgeron said, the insurance industry “needs to show leadership in product reform,” suggesting insurers were “singled out” when the NDP called for a 15% reduction in private passenger auto premiums.

“You rarely hear of this in other industries,” Forgerson said. “It would be akin to walking into an auto assembly plant and demanding that cars be sold 25% cheaper even if no changes are made to the car parts or its features.”

The Liberals did require auto insurers, when making rate filings, “to propose rates and a risk classification system that contribute adequately to the achievement of” a 15% industry-wide target reduction.

But Forgeron praised Premier Kathleen Wynne when “she said that costs needed to be removed from the system in order to make this work.”


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