Ontario Auto Insurance Reform

Ontario has issued a series of new regulations to be effective September 1, 2010. The province plans to have further reforms which will be implemented at a later date. The basis of the new auto regime is to control costs and to provide consumers with more choices in their auto insurance coverage. The province is putting out a standard policy and consumers will have options to purchase higher levels of coverage or to increase deductibles. This will allow consumers to pay for the level of coverage that is best suited to their needs. Standard medical and rehabilitation benefit limits have been lowered to $50,000 from $100,000 for non-catastrophic injuries with the option to buy back up. The province is also tackling the issue of the increasing cost burden of assessments by capping the cost of an assessment at $3,500 for minor injuries. While there is no cap on the number of assessments, assessment costs are included in the $50,000 limit on medical and rehab benefits. Minor injuries, which include whiplash disorder, will have access to medical and rehabilitation benefits up to a maximum of $3,500. The definition of “Catastrophic impairment”, the level at which higher benefits are available, is going to be reviewed.

The province has a number of joint industry committees working on implementation. There will be a new set of forms developed which must be used by the Health Claims for Auto Insurance (HCAI) system which is in the process of being reimplemented. Insurers were to be on the HCAI by the end of March 2010.

Consumer education about the reforms is being done by insurance companies who will be required to send a point-of -sale disclosure document with renewal notices for renewals on or after September 1, 2010.

Auto- Bulletin A-01/10 Auto Insurance Reform Regulations

Regulation 34/10 is the new Statutory Accident Benefits Schedule (SABS). Key changes include:

• Capping medical assessment expenses at $3500 for minor injuries
• A new minor injury guideline replaces the PAF framework for Grade I and II whiplash disorders
• Standard medical coverage for non-catastrophic claims of $50,000 with optional coverage to $100,000 or $1,100,00
• Optional standard attendant care coverage for non-catastrophic claims of $36,000 (optional coverage of $72,000 and 1,072,000).
• Optional caregiver, housekeeping benefits for non-catastrophic
• Creating a definition of incurred expense

Regulation 7/00 (Unfair or Deceptive Acts and Practices)

This regulation has been amended by Ontario Regulation 37/10 to ensure that automobile insurers cannot use credit information for specific automobile insurance rating and underwriting purposes, or for differential quoting practices. Also, affiliated insurers that use the same distribution channel must provide a consumer with the lowest rate that is available through the channel.

Regulation 664

This regulation has been amended by Ontario Regulation 36/10 to provide amongst other changes, that accidents where the driver is found less than 25% at fault cannot be used for rating purposes.
 

• Other regulation changes include

Ontario Regulation 777/93 (Statutory Conditions – Automobile Insurance)
Ontario Regulation 283/95 (Disputes Between Insurers)
Ontario Regulation 403/96 (Statutory Accident Benefits Schedule – Accidents on or after November 1, 1996) This regulation has been amended by Ontario Regulation 35/10 to set out the transitional rules for accidents that occur before September 1, 2010.

Auto – Filing Guidelines

Further to the auto reforms, FSCO has posted bulletin No. A-02/10, Property & Casualty – Auto which sets out requirements for submitting automobile insurance rate and risk classification filings. The filings must be submitted to the Financial Services Commission of Ontario (FSCO) by April 15, 2010. FSCO will review reform-related filings only; non-reform filings will be attended to once reform-related filings have been approved.

Auto – Declaration Page Released

Further to the auto reforms, FSCO has posted bulletin No. A-03/10 Property & Casualty
– Auto which advises insurers of new requirements in the Certificate of Automobile Insurance (Ontario) form (also called the Declaration Page) for use with form OAP1. The new certificate must be used for all policies that are issued or renewed on or after September 1, 2010. A point-of-sale disclosure document informing consumers of their new coverage choices effective September 1, 2010 is being developed by FSCO and industry. Insurers will be required to include the document with the first renewal of any existing policy with a renewal date that falls on or after September 1, 2010.

1. Should telecommunications by investment or financial advisors to existing clients regarding financial products or services constitute telemarketing under the Rules? If so, under what circumstances?
    
2. Should telecommunications by insurance agents or brokers to existing clients regarding insurance products or services constitute telemarketing under the Rules? If so, under what circumstances?

The CRTC wants parties to address the impact of their proposed treatment of the telecommunications in question on the Commission's existing framework for unsolicited telecommunications to consumers, which is designed to prevent undue inconvenience and nuisance while giving due regard to freedom of expression.

The call for comments can be accessed by clicking here
Submissions are due by April 7.