Police action, legislation required to combat insurance fraud: RBC Insurance roundtable

Police action and legislative changes are required to effect stronger penalties for insurance fraud, an RBC Insurance media roundtable concluded on July 28.
Insurance fraud cost the Ontario auto insurance industry about $1.3 billion (out of about $9 billion in collected premium), according to background materials prepared for the conference. The materials cited Insurance Bureau of Canada statistics.
“There is no legislation or fraud bureau in place to combat insurance fraud,” the RBC Insurance background materials note. “Jail sentences are uncommon for those who are caught committing insurance fraud.”
In her presentation notes, Cathy Honor, president of RBC General Insurance Company, suggested regulators could also do more to help combat insurance fraud by requiring the accreditation of medical clinics.
RBC Insurance reviewed seven accident benefits claims from both 2004 and 2009. All claims occurred in the Greater Toronto Area (GTA) and all involved similar diagnoses including soft tissue injuries, whiplash and psychological factors.
While the average cost of repairing the vehicle hovered at just under $4,000 for the claims occurring in both 2004 and 2009, the average medical assessment cost skyrocketed from just below $4,000 for the 2004 claims to well above $10,000 for the 2009 claims.