Ontario follows FSCO’s lead on auto reform, waters down proposed cap on non-catastrophic injuries

Ontario’s long-awaited 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 — FSCO’s proposed cap on medical/rehab benefits for non-catastrophic injuries was reduced to Cdn$50,000, and not Cdn$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:
•    In addition to lowering the cap on med/rehab benefits for non-catastrophic injuries to Cdn$50,000, an optional Cdn$100,000 medical and rehabilitation benefit would be introduced in addition to the existing Cdn$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 Cdn$20,000 from its current level of Cdn$30,000.
•    A cap on medical assessment costs of Cdn$2,000 per assessment (a fee for completing forms would be capped to Cdn$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 reform package also includes a lengthy to-do list involving consultations with medical, insurance, legal and consumer groups on such things as:
•    training adjusters on the needs of claimants with serious injuries;
•    improving consumer awareness and expectations around treatment and outcomes;
•    establishing a best approach for controlling medical and rehabilitation costs; and
•    the creation of an advisory committee to help advise the government on longer-term reforms.
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.”