Ontario Auto Insurance Reforms ‘Excellent News’ for Consumers Says IBC

September 2, 2003

The Insurance Bureau of Canada lauded the Ontario government’s enactment of the latest package of automobile insurance reforms, indicating that they will help to cut costs and reduce fraudulent claims.

The reforms include: “a reduction in the insurance premium tax, a realignment of fees for medical rehabilitation health providers, a review of the Designated Assessment Centre system, a definition of serious and permanent injury for the purposes of tort claims, measures to reduce auto insurance fraud, and a road safety program designed to decrease the number of accidents on Ontario roads,” said the bulletin.

“The reform package introduced today is excellent news for Ontario consumers,” stated Mark Yakabuski, IBC’s Ontario vice president. “Insurers will now have the tools to better control sharply escalating costs for health care and legal expenses. These are the costs that have been fuelling higher premiums over the past couple of years. These measures will provide relief for consumers and will bring much needed stability to the Ontario auto insurance marketplace.”

In a separate announcement the IBC singled out the anti-fraud provisions signed into law by Premier Eves as being “significant measures to address the multi-million dollar problem of insurance fraud in Ontario. Specifically, only declared income can be used now as a basis for collecting insurance benefits, thus preventing individuals from claiming benefits on income never recorded with Revenue Canada. The government has established as well a special OPP task force to investigate insurance fraud and, lastly, has earmarked funds to provide special training for Crown Prosecutors so they better understand the crime and are more prepared to prosecute the crime and argue for stiffer sentences.”

“This is great news for all honest policyholders who pay the price for fraud,” indicated Terri MacLean, IBC’s Executive Vice-President Information and Investigations. “We estimate conservatively that fraud adds at least 10% to the cost of insurance premiums. These announced reforms will give us the additional resources required to reduce this costly crime. Today’s announcement addresses a significant area of fraud, enhances the capacity of police forces to investigate it, and arms the judicial system with what it needs to successfully prosecute it and impose appropriate penalties.”

She issued a warning to “those that commit or think of committing insurance fraud, that “they “better think again.” OPP officers are now “allocated to deal directly with insurance fraud investigations.” They will join with Crown Attorneys, who are trained in the intricacies of insurance fraud operations, specifically identifying, prosecuting and convicting known fraudsters. With these combined forces preventing and prosecuting insurance fraud “will now be so much easier.”

“The industry will work hard with the government to ensure that the changes are implemented as quickly and comprehensively as possible, said the IBC “The sooner we can generate savings, the better,” Yakabuski added. “Past experience shows that savings for insurers are fully passed on to consumers given Ontario’s highly competitive marketplace. This is exactly what will happen in the months to come. Although the reductions will vary from policyholder to policyholder, the savings will be significant.”

He also expressed the IBC’s satisfaction with the reduction in the premium tax, indicating that “we have been requesting this measure for many years. We are hopeful that other provincial governments will see this as an opportunity to provide their consumers with similar relief.”

Yakabuski congratulated MPP Rob Sampson for his efforts in spearheading the development of the government’s reform package.

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