Financial Services Commission of Ontario recently announced it has eliminated its mediation backlog for disputes related to auto insurance claims – but for independent brokers, there was never a backlog to start with.
“That is the advantage of being an independent,” said Jonathan Levitt, a broker with Levitt Insurance Brokers in Toronto. “We can deal with any disputes as they come on a one-on-one basis. It is the personal approach that our clients appreciate.”
The regulator announced that it had eliminated the “unprecedented” backlog of applications for mediation as of August 19, which began around 2008, and appears to show no signs of slowing down – and may in fact be on the increase.
“Beginning in 2008, we saw an unprecedent number of applications,” said Kristen Rose, senior communications officer with FSCO. “We saw during that four-year period the number of applications almost triple. But we’ve eliminated that backlog.” (continued.)
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According to a recent provincial study, some of the factors that contributed to the backlog were “industry practices in the handling and processing of statutory accident benefit claims are leading to more disputes; and more claimants, represented by legal professionals, are disputing decisions made by insurers.”
In addition, the Auto Insurance Anti-fraud Task force’s Interim report cited more complex accident benefits have expanded the issues or coverages that can be mediated; and “more questions about the legislative and regulatory changes including recent amendments to statutory accident benefits,” coupled with economic conditions creating financial pressures.
“There has been a steady increase in Applications for Arbitration since 2006-07,” said Rose. “As a result of clearing the mediation backlog and other external factors, this trend is continuing.”
About 72 per cent of failed mediations proceed to arbitration at FSCO and the regulator said it is continuing to use the private service provider to assist with arbitration files – a private dispute resolution service that FSCO credits with helping to clear up the backlog, in conjunction with its online scheduling system (eCalendar).
Any backlog that existed at FSCO didn’t affect Levitt or his clients, he told InsuranceBusiness.ca – something that independent brokers can take pride in.
“It is the personal approach that our clients appreciate,” he said. “Any backlog there was at FSCO didn’t affect us or our auto insurance clients.” (continued.)
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According to FSCO, a mediator is required to attempt to effect a settlement of a dispute within 60 days after the date on which the application for the appointment of a mediator is filed. If mediation does not take place within 60 days and the parties have not mutually agreed to extend the time limit, then the mediation is deemed to have failed.
Here is a breakdown of the numbers from FSCO:
The number of applications for mediation
2007-08 – 2,747
2008-09 – 3,045
2009-10 – 3,421
2010-11 – 4,193
2011-12 – 5,260
2012-13 – 10,510
Percentage variance over prior year
2007-08 – 3.6
2008-09 – 10.8
2009-10 – 12.3
2010-11 – 22.6
2011-12 – 25.4
2012-13 – 99.8
