Insurance News - Tuesday, December 30, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, December 30, 2014:

• Bill 15 changes to prejudgement interest calculations will become effective on January 1, 2015.
• Many ride-sharing drivers are perplexed by the mixed messages that they receive and therefore opt for silence when it comes to informing their insurers. The situation is becoming problematic as ride-sharing programs expand and drivers are having accidents.
• As Uber collects a mountain of data from its ride-sharing app, it is very likely that the information will be used to expand into services, such as moving goods not just people.
• Once you get passed the rhetoric, what has become clear is that Uber has exposed flaws in taxi services in Canadian cities. Consumers look forward to reforms.
• California’s Department of Motor Vehicles will miss a year-end deadline to adopt a new set of rules for driverless cars and other cars of the future because there’s still no certainty that driverless vehicles are safe.

Insurance News - Tuesday, December 23, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, December 23, 2014:

• Over $1 million in stolen vehicles recovered and 7 people charged as police investigation nabs international car theft ring operating in Toronto, York Region and Durham Region.
• It appears Uber may be telling its California drivers that personal rather than commercial auto insurance is sufficient leaving them uncovered and driving illegally.
• Google unveiled its first prototype of a fully-functional, driverless car which has actually been built on a patchwork of auto parts.
• Not a surprise that Google is also seeking an auto industry partner to develop its driverless car because it does not want to be a car maker.
• The Nova Scotia government has changed its position on a controversial lawsuit to clawback a settlement award for an catastrophic claim involving a young woman with a severe brain injury.

Insurance News - Saturday, December 20, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Saturday, December 20, 2014:

• Smartphone applications and devices that record trip and vehicle data are set to infiltrate auto insurance at a rapid pace, bolstered by discounts of as much as 30 percent.
• A new Uber-like phone app lets stranded drivers summon the nearest tow truck. Is this a good or bad thing?
• It seems driverless cars do not do well in rain, snow and fog.  Just like we humans.
• Given the size of the Ontario auto insurance market, recent auto insurance reforms (Bill 15) could impact on the entire Canadian P&C market.
• Not everyone is happy about Bill 15. Tow trucks organized a protest at Queen's Park regarding provisions in Bill 15 dealing with towing regulation.
• Uber's process for vetting potential drivers is receiving a lot of scrutiny.

Are Insurers Using Cost Control Tools Properly?

I noticed an interesting section at the end of a recent bulletin issued by FSCO regarding recent regulation changes that I reviewed in a recent post.  Thrown in with the announcement of regulatory changes is a discussion on mileage expenses by health care providers.

The bulletin goes on to state that FSCO is aware that some health care providers are submitting mileage expenses to insurers to travel to an injured accident victim to provide services. Insurers are reminded that "authorized transportation expenses", as defined in the SABS, are intended to apply to expenses incurred by the insured person and not health care providers.  Details of what can be claimed by insured persons are subject to the Superintendent’s Transportation Expense Guideline.

The bulletin also reminds insurers that hourly fees in the Superintendent's Professional Services Guideline include all administration costs, overhead, and related costs, fees, expenses, charges and surcharges. Insurers are not liable for any administration or other costs, overhead, fees, expenses, charges or surcharges that have the result of increasing the effective hourly rates, or the maximum fees payable for completing forms, beyond what is permitted under the Professional Services Guideline.

My guess is that these aren't just friendly reminders.  More likely FSCO has become aware that health care providers are submitting for mileage and other expenses related to treatment of insureds, and insurers are paying them.  While the industry is lobbying government to reduce costs in the system, insurers are paying for expenses that do not fall under the SABS.

Having worked for the government for many years I am fully aware of the amount of lobbying in which stakeholders partake.  Insurance companies are not shrinking violets when it comes to lobbying efforts.  There is a constant list of suggested changes presented to government officials to reduce the cost of auto insurance.

It was frustrating to work on endless changes to the system that will never be fully utilized. We now have a complex set of rules, many proposed by the insurance industry, that are not always being used. It is a system that is too complex for many to properly understand and use.

Yet the government keeps churning out more regulation and rule changes to drive down costs.  But growing red tape and complexity likely have the opposite affect.  Transactional costs keep going up for insurers, health care providers and legal representatives which ensures that the price of auto insurance in Ontario remains high.

As the service provider licensing system is rolled out and soon to be followed by a new minor injury protocol I wonder which direction costs will go - up or down.

Insurance News - Thursday, December 4, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, December 4, 2014:

• The Supreme Court of Canada grants Zurich Insurance leave to appeal ruling over Ontario 'Dispute Between Insurer' regulation (O. Reg. 283/95) from last May.
• Project Whiplash has produced a 2-year conviction and $1.3 million in restitution for operating a staged collision ring in the GTA.
• On and after December 1, Ontario auto insurers cannot pay service providers directly if they do not have a FSCO licence.
• An undercover investigator hired by the city of Toronto reports that Uber poses ‘real and urgent’ safety problems.
• Google has taught its driverless cars to be aggressive, Google cars now nudge into traffic to compete with pushy drivers.

New Auto Insurance Regulations

In October the government posted a notice on their Regulatory Register inviting stakeholders who comment on proposed auto insurance regulation changes.  The regulations have now been approved by the Ontario Cabinet. The regulations dealing with the licensing of service providers are effective December 1, 2014.  The regulation amendment dealing with the interest on overdue payments is effective January 1, 2015.

Section 51 of the SABS (O. Reg. 34/10) has been amended (by O.Reg. 236/14) so that interest payments of 1 percent per month compounded monthly for overdue SABS payments only applies up to the date on which a mediation proceeding begins.  Once the dispute reaches mediation the interest on overdue SABS payments is calculated at the prejudgment interest rate described in the Courts of Justice Act that is used for past pecuniary loss.  The lower interest rate and is then payable until the date a settlement is reached or a decision is issued that finally disposes of the dispute.

Section 49.1 has been added (by O. Reg. 227/14) to the SABS (O. Reg. 34/10)  to cover invoicing by unlicensed service providers.  These providers must bill claimants using the Standard Invoice (OCF-21) and the claimant is to submit the invoice to their insurer.  It is the responsibility of the insurer to provide HCAI with billing information from invoices submitted by claimants when they reimburse a claimant.

The Unfair or Deceptive Acts or Practices regulation (O. Reg. 7/00) has been amended (by O. Reg. 231/14). An unlicensed service provider may not advertise that they are a licensed provider. A licensed provider that has had their licence suspended or revoked may not continue to advertise that they are licensed.

The Administrative Penalties regulation (O. Reg. 408/12) has been amended (by O. Reg. 230/14) to deal with significant contraventions of the regulations that can involve or potentially lead to improper billing practices by service providers.

The Service Providers – Standards for Business Systems and Practices regulation (O. Reg. 90/14) is amended (by O. Reg. 228/14) to introduce a duty to report accurately to the Superintendent of Financial Services, in the periodic return established under section 288.4(5) of the Insurance Act, all information necessary to calculate any applicable fees established pursuant to section 121.1 of the Insurance Act.

The Service Providers – Listed Expenses regulation (O. Reg. 89/14) is amended (by O. Reg. 229/14) to allow licensed service providers to seek payment for outstanding accounts directly from claimants where a full and final settlement has been reached and signed between the insurer and the insured person that includes these amounts.