Submitting information to OWCP

I frequently hear the complaint that "OWCP lost something that I sent in to my file." In a federal workers compensation claim, OWCP scans everything that you send them. If its got your file number on it, it is usually in your file. The folks who do the scanning are contractors, not your claims examiner. Anything you send to OWCP should have your file number clearly marked at the top right so that it is easy for someone to associate it with your file.

When items are scanned to your file, they are "coded" as correspondence, medical report, CA-1032 form, etc. A very common reason for a document to supposedly not be in your file is that it was incorrectly coded. For instance, it appears to me that about 75% of the time when one of my clients gets a nasty letter saying that the annual CA-1032 form was not received that is not actually true. OWCP did receive the CA-1032, but when it was coded, it was listed as correspondence or something other than being the CA-1032. Then, when your claims examiner reviewed incoming mail to see if it was listed as being received, since its coded wrong, it does not show up in the index to your file as being received.

Queen's Park Update

A surprise majority for the Liberals in the recent election is expected to set a different tone in Queen's Park after almost 3 years of minority government.  A minority government is all about survival, there is no long-term planning. The Liberals could not focus on deficit reduction, job creation, pensions or stabilizing the auto insurance product without the confidence of having the support of the Legislature.

Despite campaigning under an activist agenda, the Liberals are now signalling that they are serious about deficit reduction. Deb Matthews has been appointed President/Chair of Treasury Board/Management Board which traditionally has been a responsibility of the Ministry of Finance. Treasury Board is not well known outside of government but it is a powerful central agency that manages the fiscal plan of the government including all government spending and approving labour agreements.  A very powerful body.

Charles Sousa continues as Minister of Finance and appears to still be responsible for the auto insurance file.  His Deputy, Steve Orsini has been promoted to Secretary of Cabinet which is head of the Ontario Public Service.  His appointment is intended to also signal that the Liberals are serious about deficit reduction.  He replaces Peter Wallace also preceded Orsini as Deputy Minister of Finance.

There has been some restructuring in the Ministry of Finance.  The Insurance and Cooperatives Policy Unit (which includes auto insurance policy) and the Deposit Taking Institutions Unit of the Industrial and Financial Services Branch will be reconstituted as the Financial Institutions Policy Branch. They will continue to be led by Alvaro del Castillo. Tthe Financial Institutions Policy Branch will join the Securities Reform Division (SRD) reporting to Assistant Deputy Minister Frank Allen who replaces Pat Deutscher. To better reflect its broader mandate the SRD will be renamed the Financial Services Policy Division.

Next week, new MPPs will return to Queen's Park to elect a new Speaker of the Legislature (July 2), hear a new Speech from the Throne (July 3), then debate a re-introduced provincial budget on July 14. It is expected that shortly after that the Legislature will recess for the summer.  That might mean that the reintroduction of industry supported bills such as Bills 171 and 189 might have to wait until the fall.

New Practice Directions

As of July 1, 2014 there are new Practice Directions that come into effect across Ontario.  There is a new province-wide direction and well as new ones for each judicial region.  

Here is the link to the provincial direction:

http://www.ontariocourts.ca/scj/practice/practice-directions/provincial/

 
Here is the link to the regional directions:

http://www.ontariocourts.ca/scj/practice/practice-directions/

 

It is important to be aware of these Practice Directions because some of them change the requirements under the Rules; for example, whereas the Rules do not require factums for each motion, the Practice Direction says factums are required for all long motions. 

OWCP and new injuries - send your medical records directly to OWCP

When you suffer a work injury, it is your burden to provide sufficient information to document how your job caused your injury. You need to collect all of your medical records, mark your file number on them, and send them all directly to OWCP.  If someone at your employing agency instructs you to send your records through them, you may do so, but do not rely on that person to submit your records to OWCP for you. The same goes for your physicians. Even if those offices tell you that they know what to do, it is crucial that you still collect all of your records, mark your file number on the top right of each page, and send them directly to OWCP yourself.

The most common reason for an initial claim to be denied is that the medical information that would have been enough to get your file approved did not get into the OWCP file because the injured worker thought someone else was supposed to do that for them.

Rate Evasion Is The Latest Type of Fraud To Hit The GTA

Registering and insuring your vehicle using your parent's address in a neighbouring city might seem like a clever way to save money on your auto insurance rates.

Doing so can save hundreds of dollars.  Using an online quoting system, I found that a 30 year old man, driving a 10 year old Toyota with no tickets or accidents would pay $1,998 if he lived in North York. Change the address to one in Barrie and the rate drops to $1,489. That's a $500 difference.

While fibbing on an address may seem harmless enough, it's a practice known as rate evasion, and it's considered a form of insurance fraud.

With rate evasion, people claim to live in another city or that their car is garaged there, in order to pay lower insurance rates.  If you say you live in Barrie but actually live in Toronto, you're posing a risk in Toronto but you're not paying for that risk. Toronto residents whose vehicles are registered in the right location end up covering some of your share of the costs by paying higher auto insurance rates.

Rate evasion occurs in regions with high auto insurance rates.  It's difficult to detect in the GTA since vehicle plates do not reveal where your car is registered.  In some urban areas in the U.S. it is a little more obvious.  In certain areas of New Jersey, especially northern, urban areas, and the southern part of the state bordering Pennsylvania, it's not uncommon to see plenty of cars with out-of-state license plates regularly parked in people's driveways and on residential streets.  Recently I was involved in a minor collision and the other driver provided me with his driver's licence, vehicle registration and insurance card.  Each document had a different address.  It made me just a little suspicious.

Auto insurance is a pooling system where everyone pays premiums and the pool of funds are used by an insurer to pay claims to those who have accidents.  Everyone is rated based on their risk profile which includes where you live.  To certain extent there is always going to be some form of cross-subsidization based on the rules an insurer follows.  For example, an insurer cannot determine premiums based on whether the policyholder has access to collateral benefits from a workplace (e.g., supplementary health benefits). Those with access to collateral benefits are going to claim less than those without yet they may be rated the same, all things being equal.

When consumers try to beat the system by registering their vehicle at a false address, they are being cross-subsidized by other policyholders.  The difference is they are operating outside of the rules and the law. Therefore, it's fraud.  Still, high premiums in the GTA will continue to tempt some drivers.

Insurance News - Friday, June 20, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, June 20, 2014:

• IBC will be lobbying for more auto insurance reforms in in Ontario now that there is a majority government.
• Why it's so easy to steal from insurance companies – and what to do about it.
• Should Canada revisit credit rating for auto underwriting?
• Auto insurance claims drop with Honda collision warning system - a taste of what driverless cars can offer.
• So what happens when two self-driving cars are at an intersection and their clocks tell them both they arrived first?
• FSCO has revised the Standard Benefit Statement that insurers must send to claimants every 2 months beginning Sept 1.

Consent to Receive the Ontario Insurance Law Blog

Thank you for subscribing to the Ontario Insurance Law Blog. On July 1, 2014, Canada's new Anti-Spam Legislation law takes effect. It requires companies to have your consent to continue sending you information by email. Please click on the following link to continue receiving the Ontario Insurance Law Blog by email. You may unsubscribe by clicking the link at the bottom of the email.

https://www.surveymonkey.com/s/HGLG2F8

 

Laches Applies to Loss Transfer Actions

Insurers dealing with loss transfers should be aware of the decision in Zurich Insurance Company v. TD General Insurance Company, 2014 ONSC 3191 (S.C.J), where the Court dismissed the claim.

The claim arose out of a motor vehicle accident that occurred July 14, 1999.  In 2010, approximately 11 years after the accident, TD sent Zurich a Notice of Loss Transfer alleging Zurich's insured was 100% at fault.  Shortly after, TD made two requests for indemnification.  In 2011, TD brought an application requiring Zurich to participate in an arbitration.  Zurich brought a motion to decide a preliminary issue as to whether the application was barred by the equitable doctrine of laches and the Limitations Act.  The arbitrator dismissed the motion and Zurich appealed.

Justice Lederman held that TD's claim was not barred by the Limitation Act, relying on decision in Markel Insurance v. ING Insurance Company of Canada, 2012 ONCA 218 (CanLII), where the Court of Appeal held that the limitation period runs from the day the first party insurer requests loss transfer from the second party insurer.

However, Justice Lederman held that laches applied in the circumstances.  Applying laches in the circumstances was consistent with the fusion of law and equity to achieve just results.  He held that acquiescence is a stand-alone basis for laches, and there need not be prejudice for the doctrine to apply.  The 11-year delay coupled with a directive that the first party insurer notify the second party insurer promptly and the fact the TD is a sophisticated insurer, gave rise to an inference that it had abandoned or waived its rights to the claim. 

Insurance News - Wednesday, June 18, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, June 18, 2014:

• Ontario Court of Appeal finds insurer must indemnify and and defend woman who let her driver's licence expire.
• The WSIB has been relying more on surveillance to investigate questionable claims.
• Government prepares regulations to enable large-scale testing of self-driving cars on Dutch roads.
• Driverless cars are going to change just about everything.
• Other than Ekos, why did none of the polls pick up on a Liberal majority?

What the Liberal Majority Government Means For Ontario Auto Insurance

The Liberal platform for auto insurance was essentially set out in the 2014 Spring Budget which never proceeded beyond first reading before the election was called.  Now that the Liberals have a majority, it is expected that they will proceed with those commitments.  It also means the NDP will no longer be able to influence government policy.

In the Spring, the Liberals indicates that the rate reduction strategy is on target and average rates will be 8% lower by August 2014 and 15% lower by August 2015. However, the Budget document does not point to any specific initiative that will specifically work towards achieving those targets. Average rates are down 5.6% as of the end of the first quarter of 2014.

The Liberals will  have a challenge bringing down rates further without a few significant systemic changes.  More and more it appears costs have been rising over past few quarters so it should be interesting to see the second half data for 2013.  Rising costs can be attributed to a number of factors including:

• a severe winter
• higher claims volumes
• the backlog of decisions awaiting arbitration
• deterioration of reforms as parties begin to discover how to work the system
• claims staff "fatigue"
• residual fraud

Governments are more likely to make unpopular decisions early in a mandate than immediately before an election.  So there is a possibilities that some tougher decisions make be made on the auto insurance file to stabilize costs and ensure consumers will see lower rates.

The Premier has committed to bringing back the Legislature on July 2 to re-introduce the Budget Bill following a Throne Speech. The Budget Bill itself had no auto insurance provisions.

Instead, legislative amendments to the Insurance Act were part of Bill 171, the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 which was introduced in March 2014.  The Bill included legislative amendments for the transformation of the dispute resolution system, and further action to crack down on fraud and abuse, as well as other cost-saving measures. The government was to take further steps on developing a dedicated investigation and prosecution office on serious fraud, with an initial focus on auto insurance fraud. The development of this fraud office would be based on the Auto Insurance Anti-Fraud Task Force’s principle that fraudsters should be vigorously pursued and prosecuted where evidence warrants.

There is no timetable for re-introducing Bill 171.  There were some strong objections expressed over several provisions in the Bill - barring access to the courts for accident benefit disputes and reducing the prejudgment interest rate.  It will be interesting to see if there are any changes should the Bill be re-introduced.

The Liberals had also introduced legislation to regulate the towing industry that never passed.  Bill 189, the Roadside Assistance Protection Act would require towing and storage providers to publish their rates, provide an itemized invoices, accept payment by credit card if requested and to disclose to the consumer any interest a towing and storage provider may have in a location or facility to which a vehicle may be towed for repair or storage.  If passed into law, Bill 189 would also stipulate the consumers be given access to towed vehicles in order to remove personal property.

FSCO has been proceeding with the licensing of treatment and assessment facilities on the auto insurance sector.  The licence application process opened up on June 1.  Facilities will have to be licensed on December 1 in order to submit invoices through HCAI.  Application fees were also recently announced.

Perhaps even some outstanding issues, such as the definition of catastrophic impairment and a new minor injury treatment protocol will finally be addressed.

Insurance News - June 12, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, June 12, 2014:

• What do politics have to do with Ontario auto insurance rates anyway?
• The Ontario election is too close to predict but that doesn't stop people from predicting.  Go out and vote.
• Self-driving cars along with car sharing schemes could take up to 80% of traffic off the roads of congested cities.
• A fake city built at the University of Michigan is to be used to test self-driving cars.
• The legal costs to the telematics industry of handling subpoenas and other information requests will quickly rise.
• Auto risk management - how 'telematics' is revolutionizing insurance.

The “Curtain” of Asserted Claims of Privilege Lifted to Permit a Full Examination of all Available Evidence

In Tomasone v. Capo, Sgro LLP, 2014 ONSC 2922 (CanLII) the defendant had provided two legal opinions to the plaintiffs which the plaintiffs claimed failed to meet the requisite standard of care. The plaintiffs sued the defendant in negligence. The defendant brought a motion for summary judgment asserting that the plaintiffs’ claim was statute barred by the Limitations Act, 2002.

In defence to the summary judgment motion, the plaintiffs put forward affidavit evidence suggesting they discovered their claims against the defendant after retaining counsel. Their counsel also swore affidavits but during cross-examinations they refused to answer any questions about when or how they discovered those claims.

In advance of the summary judgment motion, the defendant moved for answers to refusals with respect to discoverability, particularly dealing with information and documentation the plaintiffs claimed privilege over.

Master Short considered whether the plaintiffs could rely on privilege in these circumstances and concluded at paragraph 48 as follows:

The plaintiff ought not to be allowed to rely on discoverability arguments to seek to avoid a limitations defence, without making full disclosure with respect to all relevant facts relating to what knowledge was acquired and when.

Master Short also considered the defendant’s argument that even if privilege applied, the plaintiffs waived privilege. Master Short agreed, taking into account the following factors inter alia:

1) the plaintiffs undertook to prove their action was not statue-barred and they put their state of mind and their lawyer’s mind in issue to argue that the action was not statute-barred;

2) the plaintiffs relied upon the affidavit evidence of their lawyer; and

3) the plaintiffs subpoenaed former counsel to give evidence.

Master Short went on to review the guidance provided by the Supreme Court of Canada in Hryniak v. Mauldin, 2014 SCC 7 regarding the importance of full disclosure in light of the court’s power on the hearing of summary judgment motions to assess the quality and sufficiency of the evidence and the requirement that the parties "put their best foot forward".

The plaintiffs were ordered to answer the questions they refused related to the timing of receipt and review of relevant documents and the timing of investigations into possible claims against the defendant.

Insurance News - Friday, June 6, 2014

Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, June 6, 2014:

• A number of experts think that self-driving cars could hold a big promise for public transportation.
• Almost  80% of Canadians are still unfamiliar with usage-based insurance.
• Telematics will become so popular that within 10 years drivers will likely have to opt out.
• Lawyers and expert witnesses are cashing in when auto insurance claims go to court and driving up costs.
• Armed with digital devices, consumers are filling many legacy insurance roles and driving insurers crazy.
• An interesting report by Lloyds on self-driving cars - opportunities and risks for insurers.

FSCO's Licensing Process for Service Providers Has Begun

The licensing process for auto insurance service providers, first recommended by the Auto Insurance Anti-Fraud Task Force in 2012, has officially begun.  

As if June 1, the application process was opened up by FSCO.  Service providers must be licensed by December 1 to continue to use HCAI and bill insurers directly.  As well, FSCO states that an application received after August 31 may not be processed before December 1.

Service providers can apply as a:

• Sole proprietor
• Partnership
• Corporation

The application fees are now available as well.  There is a one-time application fee of $337. Then there is a annual regulatory fee that is tied to the volume of business conducted with auto insurance companies. Service providers will be charged $15 for each claimant in the system in the calendar year plus $128 for each location it operates from.

So a chiropractor that sees 2 auto insurance claimants per month and operates one clinic will pay:

($15 * 24) + $128 = $488.

A larger provider operating from 5 locations with each location accepting 40 new claims a month will pay:

($15 * 2400) + ($128 * 5) = $36,640.

Regulatory fees will be payable on April 1, 2015 and will be prorated from December 1, 2014 (four months). 

For more information check the FSCO website.