Does Ontario need a consumer insurance bureau?

Personal injury lawyers believe that the province is in need of a protective watchdog – do brokers agree?

Risk Management News

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The Ontario government’s response to rising auto insurance premiums is “akin to bringing a bazooka to a pocket-knife fight” and as a result, the province is desperately in need of consumer watchdog organization, according to two personal injury lawyers writing for Law Times.
 
More particularly, Peter Cozzi and Darryl Singer allege that instead of combating fraud, the province has misdirected their efforts to no-fault accident benefits and the tort deductible, which serves as a “one-two punch” in benefiting the industry and hurting consumers.
 
As a result, they advocate for a consumer insurance bureau that will help auto accident victims obtain a meaningful award while also advocating on their collective behalf to legislators and government officials. The lawyers contend that $1 per vehicle could fund the venture.
 
While Cozzi and Singer believe that this bureau could instigate some “corrective balancing” for many of the woes facing the auto insurance market, including the fact that “worthy cases languish due to legislative changes,” they admit that the province is unlikely to ever establish such an agency.
 
“Do the province’s actions signal its disinterest in accident victims or is it that the significant revenue contribution from the HST charged on the millions of dollars paid by consumers in insurance premiums in conjunction with the taxes paid by those insurers and their tens of thousands of employees is the critical factor for a government concerned about fiscal responsibility?,” they ask.
 
While brokers may be able to see the eventual benefit of a consumer insurance bureau, they say it’s too early for Ontario to deem one necessary.
 
“While the government did admit that the system wasn’t working well before, the new legislation is intended to correct the situation, but it’s only been operational for a short amount of time,” said Nick Kandiuk, AVP and senior underwriter, Special Risk Insurance Managers Ltd. “It’s too early to say whether it’s going to work out or not, and I think they’re jumping the gun a bit by being too critical so soon.”
 
Kandiuk does note, however, that the authors mention that a consumer insurance bureau is already in place in Nordic countries, and questions why it hasn’t spread to other jurisdictions. Still, he admits that he’s unfamiliar with such an organization, and the best move right now is to simply wait to see how the province’s auto insurance reforms manifest.
 
“If it works, it should be something that’s adopted in other places, such as Ontario,” he said. “But I think the legislation deserves some time to see how it all pans out before we make too much of it.”
 

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