Most readers are already familiar with the events leading up to Finance Minister Dwight Duncan’s proposed changes to the auto insurance regulations on November 2, 2009. Part VI of the Insurance Act governs the provision of auto insurance in the province of Ontario. As such, it also deals with all aspects directly and indirectly affecting the administration of the Statutory Accident Benefits Schedule. Review of Part VI is required every five years.
This first review officially commenced on June 3, 2008 with then-FSCO Superintendent Bob Christie’s call for submissions. Many submissions were received from a wide range of stakeholders. Christie submitted his report to Minister Duncan on March 31, 2009. It contained 39 far-ranging recommendations.
The review process so far has not been pretty, which perhaps should have been expected given the problems plaguing Ontario’s accident benefits regime and the polarity of stakeholders’ interests. This despite the fact that the benefits themselves are Canada’s most generous. At the time of publication, we were still awaiting an announcement of the precise date on which the new regulations will take effect.
Taken as a whole, Duncan’s proposals appear to be efficiency- and cost-driven, and follow four themes: reduction, de-listing, control and cost shifting.
The most noteworthy reduction is to the medical and rehabilitation benefits, whose maximum will go from $100,000, if you are not deemed catastrophically injured, to $50,000. The attendant care benefits for such claimants will also be halved to $36,000.
De-listing comes in the form of elimination of the housekeeping, home maintenance, caregiver and non-earner benefits for the non-catastrophically injured. Claimants’ entitlement to a so-called “rebuttal” assessment – a form of benefit that did not reduce the $100,00 maximum – to challenge an insurer’s rejection of an application for benefits will also be eliminated.
Control measures aim to improve the medical/rehabilitation cost/benefit balance, which insurers have long complained is tilted against them. Insurers have presented compelling evidence that assessment and treatment outlays do not always correlate with claimant outcomes. At the same time, the Ministry of Finance and FSCO (The Financial Services Commission of Ontario) seem to recognize that the complexity of the Statutory Accident Benefits Schedule regulations is beyond some adjusters’ clinical and administrative skills when it comes to day-to-day claims adjudication and file management. The result is inequitable decision-making and non-compliance with statutory time limits for decisions. Apparently unspecified measures are being taken to address this problem.
Cost shifting comes in the form of new coverage options for which policyholders will be required to pay an additional premium if they want to retain the coverage they had before the reductions took effect. In that regard, Duncan appears to have taken a page from the HR managers’ playbook. Readers who have been members of flexible benefits plans will recognize the similarities to the way those plans are introduced to replace conventional plans, with employees being given the option to “buy back” their original benefits should employer flex credits not be sufficient to do so.
That Mr. Duncan has yet to announce when the new regulations will be published is an indication that try as he might to extinguish the political fires, embers still glow. The rehabilitation community has waited this long; it can wait longer, provided the rules are clear, and the necessary changes are made to the auto insurance industry’s HCAI claims system.
