- Quebec is not being as aggressive as Ontario with regard to telematics since the take-up for auto usage-based insurance products has been lackluster to date.
- It's hard to imagine tomorrow’s transportation infrastructure to support driverless cars when haven't gotten around to fixing today’s infrastructure.
- In New York insurers and and trial lawyers agree the state’s no fault insurance law needs reforming but they don't agree on how. Sounds like Ontario.
- New Jersey has a bill that today is advancing in the Legislature that would establish a program to allow people to obtain endorsements on their driver’s licenses to operate and test driverless vehicles.
Wednesday, October 29, 2014
Insurance News - Wednesday, October 29, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Wednesday, October 29, 2014:
The Importance of Certainty When Pursuing the Deduction of Collateral Benefits
The jury in Gilbert v. South et al., 2014 ONSC 3485 (CanLII), awarded the plaintiff general damages, future care costs and damages for past and future income loss and loss of housekeeping.
The plaintiff had been injured in a motor vehicle accident in 2010. The plaintiff’s injuries were non-catastrophic. He was entitled to certain statutory accident benefits including up to $100,000 for medical and rehabilitation, subject to a 10-year time period.
The plaintiff had received some medical benefits totalling $14,822.50 and housekeeping benefits totaling $14,822.50. The plaintiff had neither applied for nor received income replacement benefits or attendant care benefits and the time period to receive same had expired. The time period had also expired for the plaintiff to receive future housekeeping benefits. The defendant did not seek relief in relation to the benefits that may have been available to the plaintiff but were not pursued.
Prior to judgment being formally entered, the defendant brought a motion seeking various forms of relief relating to “certain futurestatutory accident benefits and other collateral benefits” received or to be received by the plaintiff.
The defendant relied on s.267.8 of the Insurance Actwhich in certain prescribed circumstances imposes trust, payment and assignment obligations on plaintiffs who in motor vehicle accident cases obtain certain types of litigated recovery for losses which also may be addressed by certain collateral benefits (para 8).
Justice Leach set out the general principals relating to the application of this section, including the following (pars 9):
· the object of these provisions is to prevent “double recovery” by the plaintiff. The provisions assume that the plaintiff has obtained, through litigation, damages covering the same loss otherwise covered by the collateral benefits;
· concern of double-recovery is balanced by concern that a plaintiff should receive full compensation and not recover less than that to which he is entitled. Statutory provisions of this nature are strictly interpreted and applied;
· deductions from a plaintiff’s damage award to prevent double-recovery will be made only if it is absolutely clear that the plaintiff’s entitlement to such collateral benefits is certain, and the plaintiff received compensation for the same benefits in the tort judgment. Evidence of “likelihood” and “probability” is not enough to warrant a deduction. A “very strict onus of proof” applies in relation to such matters, and it must be “patently clear” that the preconditions for an appropriate deduction have been established.
Justice Leach held that there were too many uncertainties as to entitlement and overlap to grant the relief requested and the defendant’s motion was denied. There was no evidence as to the total amount or the nature of statutory accident benefits the plaintiff would definitely receive.
A further obstacle to the relief requested by the defendant was that the jury awarded the plaintiff $57,250.00 for “future care costs” but the jury did not indicate, and was not asked to indicate, the extent to which any of this amount was allocated to the time period during which the plaintiff may be entitled to medical and rehabilitation benefits. Of importance, Justice Leach notes that this uncertainty may have been avoided by the posing of more specific questions to the jury.
This decision stresses the importance of quantifying future entitlement to collateral benefits in advance of trial and the importance of taking care to ask the necessary questions of the jury in order to identify any overlap between the tort award and collateral benefits.
It's a whole new ballgame in PIP litigation, thanks to an SJC decision
I have written before, here, about why it is difficult to sue PIP carriers who fail to pay claims. PIP claims are by their nature small: generally not more than $2000 and never more than $8000. The PIP statute provides that the insurer must pay the claimant's attorney's fees if a judgment against the carrier enters. Up until now, an insurer could avoid paying those fees if it forced a claimant to file suit, conduct discovery and go to trial and then, minutes before judgment enters, paid the claim. Of course if the claimant proved bad faith in the insurer's actions then attorney's fees were available under Mass. Gen. Laws ch. 93A, but bad faith is harder to prove than mere failure to pay a claim when due. Although some wiggle room was found by various decisions of the Massachusetts Appellate Division (a court that does not set precedent), see here and here, PIP cases in general were simply a bad risk.
The Supreme Judicial Court of Massachusetts has changed all that.
In Barron Chiropractic & Rehabilitation, P.C. v. Norfolk & Dedham Group, 469 Mass. 800 (2014), the SJC has held that an unpaid party who has brought suit may refuse the insurer's tender of PIP amounts due, proceed with suit, and obtain a judgment for those amounts as well as its costs and attorney's fees.
The plaintiff, Barron Chiropractic & Rehabilitation, provided chiropractic services to Nicole Jean-Pierre after an auto accident. Jean-Pierre's PIP carrier was Norfolk & Dedham.
Jean Pierre's chiropractor at Barron and Norfolk & Dedham disagreed about the length of treatment made necessary by the accident and about the proper price for her treatment. The disputed amount was $1,544.05.
Barron sued Norfolk & Dedham in District Court. Norfolk & Dedham determined that its anticipated litigation costs would substantially exceed the amount of the disputed medical fees. Six days prior to trial it sent Barron a check for the disputed amount with an attached check stub that stated "full and final settlement." Barron's counsel returned the check to Norfolk's counsel with a letter stating that its offer of settlement was rejected.
The SJC held that under contract law Barron was not required to accept the tender of settlement for the amount due after the time for payment under the PIP statute had passed. It also held that it would be unfair and against the purpose of the PIP statute to allow the insurer to escape costs and attorney's fees by paying the PIP amount that was due after forcing the claimant to file suit.
Tuesday, October 28, 2014
Insurance News - Tuesday, October 28, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Tuesday, October 28, 2014:
- Japanese insurer is about to launch a smartphone service that warns drivers when their vehicles are approaching locations where traffic accidents frequently occur.
- Companies such as Google and Amazon may pose some of the biggest threats to insurers, as consumers increasingly trust technology behemoths to provide services such as insurance.
- A recent study concluded that Americans wasted $124 billion sitting in traffic in 2013 and traffic cost the average household $1,700 a year.
- Insurance Bureau of Canada warns UberX drivers about insurance coverage (or lack of it).
- The use of anti-fraud technology by insurers in North America is on the rise however, many companies are still struggling with the deployment of proactive predictive analytics tools because of resource constraints, according to a study.
Thursday, October 23, 2014
Insurance and global warming
The New York Times has an article about the reaction (and non-reaction) of insurers to higher risk of property damage as a result of global warming.
My guess is that the government will find itself more and more in the property insurance business. Just as it entered the flood insurance market through the National Flood Insurance Program, the government will have to make a choice about whether to abandon owners of property now at high risk for hurricanes and other disasters or to subsidize them.
My vote would be a gradually phased-out subsidy, perhaps with an income-based component. Just as I don't think that taxpayers should have to pay to protect the houses of people who choose to build on unstable lands prone to falling into oceans or canyons, I don't think that over the long-term taxpayers should have to pay to protect property that is highly likely to be destroyed by relatively predictable weather disasters. But I also don't want to see those property owners suffer a unilateral loss as a result of global warming, an event we have all caused and should all bear responsibility for. And I want to see poorer people with more protections for their limited assets.
Sunday, October 19, 2014
Ontario's Rate Reduction Strategy Likely To Fall Short
This week FSCO released rate filings approved for third quarter of 2014. Nine insurers, representing 26.65% of the market based on premium volume, had rates approved in the third quarter of 2014. Approved rates decreased on average by 0.11% when applied across the total market.
In the backdrop is the Ontario government's commitment to reduce rates in the province by 15% before August 15, 2015. The chart below breaks down the quarterly rate approval changes following the announcement of the rate reduction strategy last year. The third quarter of 2013 has been included although many of the rate approvals for that quarter may have been filed well before the strategy was announced.
The accumulative rate reductions approved by FSCO during this period have been under 6%. With just 10 months remaining, the government is considerably short of its target with no real strategy to bring down rates another 9-10%.
In the backdrop is the Ontario government's commitment to reduce rates in the province by 15% before August 15, 2015. The chart below breaks down the quarterly rate approval changes following the announcement of the rate reduction strategy last year. The third quarter of 2013 has been included although many of the rate approvals for that quarter may have been filed well before the strategy was announced.
Quarter | Rate Change |
2013 – 3Q | -0.68% |
2013 – 4Q | -3.98% |
2014 – 1Q | -1.01% |
2014 – 2Q | +0.22% |
2014 – 3Q | -0.11% |
Bill 15, the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 will likely be passed by the legislature within the next 10 months. The Bill contains provisions to transform Ontario's auto insurance dispute resolution system into a more robust system. Other provisions would regulate the towing and vehicle storage industries through measures that tackle questionable practices. The bill would amend provisions in the Repair and Storage Liens Act and give the province authority to change the current 60-day period that a vehicle can be stored after an accident, accruing charges, without notice to the owner. The government has also served notice through the Regulatory Register that it will reduce the rate of interest on overdue SABS payments.
However, all of these initiatives as well as the proposed legislation to regulate the towing industry and the expected introduction of a new minor injury protocol could not possible bring down rates a further 9% in less that a year.
However, all of these initiatives as well as the proposed legislation to regulate the towing industry and the expected introduction of a new minor injury protocol could not possible bring down rates a further 9% in less that a year.
Friday, October 17, 2014
Insurance News - Friday, October 17, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Friday, October 17, 2014:
- Studies show voice activated smartphones, dashboard infotainment systems can distract drivers.
- No surprise here that OPP statistics indicate that speeding and distracted drivers are the leading causes for road fatalities.
- An interesting article on how connectivity is enabling a new paradigm for auto mobility.
- Volvos will soon have a 360 degree accident avoidance systems in its cars that will plot 'escape routes' to avoid crashes.
- A Wall Street Journal article on how driverless cars with change retirement.
- The Ontario government is behind on its rate reduction commitment but still insists it will deliver.
Wednesday, October 15, 2014
The Test to Determine Whether an Insured "Permitted" the Unauthorized use of a Motor Vehicle
A recent decision looked at the test to determine whether an insured permitted someone else to drive his vehicle when she was not authorized to do so.
In O’Connell v.Personal Insurance Co., (2014 ONSC 1469 (S.C.J.), the insured let his girlfriend borrow his motor vehicle. The insured’s girlfriend was involved in an accident. It turned out that the insured’s girlfriend only had a G1 license and therefore she was not authorized to drive alone or on a 400 series highway, where the accident occurred. The insured stated that he had assumed his girlfriend had a full license. At trial, the insured’s girlfriend testified that she had not told the plaintiff that she did not had have a full license because she was embarrassed. The insurer denied a defence and indemnity on the bases that the insured had breached statutory condition 4(1) of the Ontario Regulation 777/93 and section 1.4.5 of the OAP, by allowing someone else to drive his vehicle when they are not authorized to do so.
In O’Connell v.Personal Insurance Co., (2014 ONSC 1469 (S.C.J.), the insured let his girlfriend borrow his motor vehicle. The insured’s girlfriend was involved in an accident. It turned out that the insured’s girlfriend only had a G1 license and therefore she was not authorized to drive alone or on a 400 series highway, where the accident occurred. The insured stated that he had assumed his girlfriend had a full license. At trial, the insured’s girlfriend testified that she had not told the plaintiff that she did not had have a full license because she was embarrassed. The insurer denied a defence and indemnity on the bases that the insured had breached statutory condition 4(1) of the Ontario Regulation 777/93 and section 1.4.5 of the OAP, by allowing someone else to drive his vehicle when they are not authorized to do so.
The court held that the insured had not “permitted” his girlfriend to drive when she was not authorized to do so. In reaching this conclusion, the court held that the test to determine whether an insured permitted the use of their vehicle by an unauthorized driver is whether the insured took all reasonable and prudent precautions to see that the statutory condition was not contravened. The court held that the insured knew his girlfriend had a driver`s license and it looked the same has his full G license, he had heard her anecdotes involving driving in the past and she had never told him that she only had a G1 license. Given this, the court held that the insured acted as reasonably and prudently as an average individual in similar circumstances, the statutory condition was not breached and the insurer was bound to defend and indemnify the insured.
Update On Fraud
It has been nearly two years since Ontario's Auto Insurance Anti-Fraud Task Force delivered its final report to the Liberal government. The task force's final report was the result of a 16-month review and contained 38 recommendations dealing with fraud prevention, fraud detection, investigation and enforcement, as well as regulatory responsibilities.
Following the release of task force report, it seems as if every auto insurance announcement released by the Ontario government has mentioned fraud. This is a strong indication that the government is very aware of the impact of fraud. To its credit, the government and the industry began implementing task force recommendations as soon as the report hit the streets. Despite all the work undertaken to implement the task force recommendations there still remain recommended action that are outstanding.
MORE POWER TO FSCO
The Financial Services Commission of Ontario (FSCO) and the insurance industry have created educational material in different media that instruct consumers at critical moments - such as when they learn to drive, select an insurer, collide with another vehicle or make an insurance claim - on how to avoid, detect and report improper activity. Insurance Bureau of Canada (IBC) and FSCO are active on social media, providing consumers with valuable tips and information.
It is now easier to report suspected fraud. Both IBC and FSCO operate fraud hotlines that consumers can use to provide anonymous tips of suspicious activity.
The government amended Ontario's Insurance Act in 2013 to enhance FSCO's powers. The Superintendent is now able to investigate anyone who was previously in the business of insurance; licensed service providers; or anyone else the superintendent considers may be engaged in unfair or deceptive acts or practices. This would include examining records, books and other information held by a licensed service provider.
A number of regulatory changes also became effective in 2013 specifically to combat fraud. The government has amended the Statutory Accident Benefits Schedule (SABS) so that claimants play a more active role in helping to detect and prevent fraud. As well, the list of unfair or deceptive acts or practices has been expanded.
Insurers now have the ability to examine a claimant under oath, where this is necessary to determine which insurer should be responsible for coverage, without prejudice to the right for an examination under oath with respect to questionable claims.
Finally, the government has broadened the terms of reference for the required review by the superintendent of Part VI of the Insurance Act to reflect the additional powers and responsibilities assigned to FSCO. In addition, the amended Insurance Act provision now requires the review to be conducted at least every three years.
A WORK IN PROGRESS
Although there has been considerable progress made in developing tools and mechanisms to combat fraud, there are still outstanding task force recommendations. The previous government's minority status and the recent election have contributed to delays in implementing a number of recommendations. Now that the Liberals have returned to power with a majority, it is expected that adoption of the remaining task force recommendations will accelerate.
A positive sign was the introduction of Bill 15, Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 shortly after the spring election.
Should Bill 15 be passed by the legislature - and there is no reason to believe it will not be - it will implement a number of outstanding task force recommendations.
Included are provisions to transform Ontario's auto insurance dispute resolution system into a more robust system. Responsibility would be transferred to the Licence Appeal Tribunal under the Minister of the Attorney General.
Other provisions would regulate the towing and vehicle storage industries through measures that tackle questionable practices. The bill would amend provisions in the Repair and Storage Liens Act and give the province authority to change the current 60-day period that a vehicle can be stored after an accident, accruing charges, without notice to the owner.
In 2013, the insurance industry established CANATICS, or Canadian National Insurance Crime Services, a not-for-profit organization focused on using state-of-the-art analytical tools to identify potentially suspicious claims in insurance industry pooled data, to facilitate further investigation by individual insurers. CANATICS recently added a 10th insurer as a member and now has access to data from 75% of the market based on direct written premiums in Ontario. CANATICS is expected to begin operations in 2015.
Health Claims for Auto Insurance (HCAI) has developed the Professional Credential Tracker to assist regulated health professionals in preventing their identities from being misused by health care facilities. HCAI continues to look at additional anti-fraud tools.
FSCO is well on its way to licensing health clinics that treat and assess auto insurance claimants and to sanction clinics that are not following FSCO's business-practice standards. FSCO has a wide range of sanctions at its disposal, including the ability to limit or curtail a facility's access to HCAI. The licensing system is expected to be operational in December 2014.
There are a number of other ongoing initiatives identified by the task force that the insurance industry is eager to see completed. FSCO continues to lead the work on developing treatment protocols for minor injuries that are based on scientific evidence. Meanwhile, the Ministry of Transportation is still working on its Electronic Collision System project.
MORE WORK TO BE DONE
Although it is anticipated that Bill 15 will pass, there are still a number of legislative and regulatory changes recommended by the task force that the government has not acted on. There still has been no legislation introduced to protect individuals who report suspected fraud from reprisals and retribution. The government has also not amended the regulation to permit insurers to collect a cancellation fee from claimants who fail to attend a medical examination without a good reason, and to suspend income replacement benefits when there is compelling evidence the claimant has submitted a fraudulent claim for medical or rehabilitation accident benefits.
There were also a number of recommendations that dealt with information sharing that have yet to be developed. There is a need for protocols for active information sharing about suspicious cases among the investigative divisions of FSCO, the Workplace Safety and Insurance Board, the Law Society of Upper Canada and the Ontario Health Insurance Plan. In addition, protocols are needed to permit FSCO investigators to exchange information with investigators from relevant federal entities (such as the Canada Revenue Agency). The insurance industry is still waiting for these regulatory bodies and agencies to begin work out these issues.
The task force report contained several recommendations directed at introducing greater transparency with respect to independent assessments that have not been implemented. This includes requiring insurers to disclose publicly how they choose and assess the performance of independent medical examiners they refer consumers to see. Health regulatory colleges are also expected to work together to develop professional standards, guidelines and best practices to improve the quality of independent assessments of auto insurance claimants conducted by their members.
The fight against fraud is far from over but progress has been made. Under prevention, consumer awareness has been enhanced and a new licensing system for service providers will soon be operational. The industry will be in a better position to detect fraud when CANATICS is fully operational next year. FSCO's powers have been expanded to allow for more effective fraud investigation and enforcement. All this would not have been possible without the co-operation of government, the insurance industry, police services and service providers.
Following the release of task force report, it seems as if every auto insurance announcement released by the Ontario government has mentioned fraud. This is a strong indication that the government is very aware of the impact of fraud. To its credit, the government and the industry began implementing task force recommendations as soon as the report hit the streets. Despite all the work undertaken to implement the task force recommendations there still remain recommended action that are outstanding.
MORE POWER TO FSCO
The Financial Services Commission of Ontario (FSCO) and the insurance industry have created educational material in different media that instruct consumers at critical moments - such as when they learn to drive, select an insurer, collide with another vehicle or make an insurance claim - on how to avoid, detect and report improper activity. Insurance Bureau of Canada (IBC) and FSCO are active on social media, providing consumers with valuable tips and information.
It is now easier to report suspected fraud. Both IBC and FSCO operate fraud hotlines that consumers can use to provide anonymous tips of suspicious activity.
The government amended Ontario's Insurance Act in 2013 to enhance FSCO's powers. The Superintendent is now able to investigate anyone who was previously in the business of insurance; licensed service providers; or anyone else the superintendent considers may be engaged in unfair or deceptive acts or practices. This would include examining records, books and other information held by a licensed service provider.
A number of regulatory changes also became effective in 2013 specifically to combat fraud. The government has amended the Statutory Accident Benefits Schedule (SABS) so that claimants play a more active role in helping to detect and prevent fraud. As well, the list of unfair or deceptive acts or practices has been expanded.
Insurers now have the ability to examine a claimant under oath, where this is necessary to determine which insurer should be responsible for coverage, without prejudice to the right for an examination under oath with respect to questionable claims.
Finally, the government has broadened the terms of reference for the required review by the superintendent of Part VI of the Insurance Act to reflect the additional powers and responsibilities assigned to FSCO. In addition, the amended Insurance Act provision now requires the review to be conducted at least every three years.
A WORK IN PROGRESS
Although there has been considerable progress made in developing tools and mechanisms to combat fraud, there are still outstanding task force recommendations. The previous government's minority status and the recent election have contributed to delays in implementing a number of recommendations. Now that the Liberals have returned to power with a majority, it is expected that adoption of the remaining task force recommendations will accelerate.
A positive sign was the introduction of Bill 15, Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014 shortly after the spring election.
Should Bill 15 be passed by the legislature - and there is no reason to believe it will not be - it will implement a number of outstanding task force recommendations.
Included are provisions to transform Ontario's auto insurance dispute resolution system into a more robust system. Responsibility would be transferred to the Licence Appeal Tribunal under the Minister of the Attorney General.
Other provisions would regulate the towing and vehicle storage industries through measures that tackle questionable practices. The bill would amend provisions in the Repair and Storage Liens Act and give the province authority to change the current 60-day period that a vehicle can be stored after an accident, accruing charges, without notice to the owner.
In 2013, the insurance industry established CANATICS, or Canadian National Insurance Crime Services, a not-for-profit organization focused on using state-of-the-art analytical tools to identify potentially suspicious claims in insurance industry pooled data, to facilitate further investigation by individual insurers. CANATICS recently added a 10th insurer as a member and now has access to data from 75% of the market based on direct written premiums in Ontario. CANATICS is expected to begin operations in 2015.
Health Claims for Auto Insurance (HCAI) has developed the Professional Credential Tracker to assist regulated health professionals in preventing their identities from being misused by health care facilities. HCAI continues to look at additional anti-fraud tools.
FSCO is well on its way to licensing health clinics that treat and assess auto insurance claimants and to sanction clinics that are not following FSCO's business-practice standards. FSCO has a wide range of sanctions at its disposal, including the ability to limit or curtail a facility's access to HCAI. The licensing system is expected to be operational in December 2014.
There are a number of other ongoing initiatives identified by the task force that the insurance industry is eager to see completed. FSCO continues to lead the work on developing treatment protocols for minor injuries that are based on scientific evidence. Meanwhile, the Ministry of Transportation is still working on its Electronic Collision System project.
MORE WORK TO BE DONE
Although it is anticipated that Bill 15 will pass, there are still a number of legislative and regulatory changes recommended by the task force that the government has not acted on. There still has been no legislation introduced to protect individuals who report suspected fraud from reprisals and retribution. The government has also not amended the regulation to permit insurers to collect a cancellation fee from claimants who fail to attend a medical examination without a good reason, and to suspend income replacement benefits when there is compelling evidence the claimant has submitted a fraudulent claim for medical or rehabilitation accident benefits.
There were also a number of recommendations that dealt with information sharing that have yet to be developed. There is a need for protocols for active information sharing about suspicious cases among the investigative divisions of FSCO, the Workplace Safety and Insurance Board, the Law Society of Upper Canada and the Ontario Health Insurance Plan. In addition, protocols are needed to permit FSCO investigators to exchange information with investigators from relevant federal entities (such as the Canada Revenue Agency). The insurance industry is still waiting for these regulatory bodies and agencies to begin work out these issues.
The task force report contained several recommendations directed at introducing greater transparency with respect to independent assessments that have not been implemented. This includes requiring insurers to disclose publicly how they choose and assess the performance of independent medical examiners they refer consumers to see. Health regulatory colleges are also expected to work together to develop professional standards, guidelines and best practices to improve the quality of independent assessments of auto insurance claimants conducted by their members.
The fight against fraud is far from over but progress has been made. Under prevention, consumer awareness has been enhanced and a new licensing system for service providers will soon be operational. The industry will be in a better position to detect fraud when CANATICS is fully operational next year. FSCO's powers have been expanded to allow for more effective fraud investigation and enforcement. All this would not have been possible without the co-operation of government, the insurance industry, police services and service providers.
Saturday, October 11, 2014
Appeals Court reminds us that when it comes to insurance, it's usually Buyer Beware
In Kleycamp v. USAA Casualty Ins. Co., 86 Mass. App. Ct. 1113, 2014 WL 4799608 (unpublished), the Massachusetts Appeals Court affirmed summary judgment to a defendant insurer that had not recommended that the plaintiffs purchase underinsured coverage with their auto policy.
The plaintiffs had never specifically inquired of the insurer about underinsured coverage, and the insurer never made any specific assertions or representations about the adequacy of the plaintiffs' coverage.
The court noted that the general rule in Massachusetts is that insurers and their agents do not have a general duty to recommend insurance coverage, or to guarantee that insurance policies are adequate for a particular insured's needs. There is an exception only for special circumstances, such as reliance on specific assertions or representations concerning the adequacy of coverage.
In a footnote the court noted that the same analysis might not apply to homeowner's policies.
In my view, underinsured and uninsured coverages are among the most important insurance you can buy. They can't protect you against the risk that another driver's carelessness will injure you; but they do protect you against the risk that that careless driver doesn't have enough insurance to cover your injuries.
Wednesday, October 8, 2014
"Buyer's Remorse" Does Not Entitle Plaintiff to Rescind Settlement
In almost every settlement, there is an element of compromise. In some cases, there is "settlor's remorse" and one of the parties tries to rescind the agreement. Fortunately, the courts generally hold litigants to their bargains.
An example is Morant v. Sun Life Assurance Company of Canada, 2014 ONSC 2876 (S.C.J.). The parties attended a mediation where they reached a settlement. Approximately two weeks letter, the plaintiff's counsel wrote advising his client wished to resile from the settlement and would bring a motion to set it aside. Plaintiff's counsel filed an affidavit deposing that at the time of the settlement, the plaintiff was in emotional and physical pain, extremely fatigued and felt unduly stressed and pressured. The plaintiff herself did not file an affidavit.
Justice Daly dismissed the motion to set aside the settlement. Justice Daley held that as a general rule parties are held to their agreements, although there are certain situations where courts may exercise discretion not to enforce a settlement:
An example is Morant v. Sun Life Assurance Company of Canada, 2014 ONSC 2876 (S.C.J.). The parties attended a mediation where they reached a settlement. Approximately two weeks letter, the plaintiff's counsel wrote advising his client wished to resile from the settlement and would bring a motion to set it aside. Plaintiff's counsel filed an affidavit deposing that at the time of the settlement, the plaintiff was in emotional and physical pain, extremely fatigued and felt unduly stressed and pressured. The plaintiff herself did not file an affidavit.
Justice Daly dismissed the motion to set aside the settlement. Justice Daley held that as a general rule parties are held to their agreements, although there are certain situations where courts may exercise discretion not to enforce a settlement:
In the circumstances, there was no evidence that counsel did not have authority, that the plaintiff lacked capacity or that the settlement was unconscionable. At most, the plaintiff's evidence was that she had a change of heart or "buyer's remorse", which does not constitute proper grounds for setting aside a settlement.[34] As a general rule parties are to be held to their bargains and to settlements which they negotiate and conclude. The court may exercise its discretion not to enforce the terms of a settlement where there is evidence that:(a) the resulting agreement and settlement was unconscionable, fraudulent or based on a party’s misapprehension of a material fact which was known to the opposite party;(b) the solicitor representing the party was not retained or did not have authority to settle the action and this limitation was known to the opposite party; and(c) the party lacked the legal or mental capacity to enter into the settlement agreement at the material time.
Monday, October 6, 2014
Insurance News - Monday, October 6, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Monday, October 6, 2014:
- How do you determine the appropriate premium fro a driverless car?
- Here is a list of America's most ticketed cars.
- Volvo is the only car company on the planet to make a commitment to develop and build cars that result in zero deaths or serious injuries by 2020. But the deadline appears to more marketing than a real goal.
- Some experts think new car technology may not lower insurance rate.
- Ontario health minister orders inspection and investigation reports on private clinics made public.
OWCP changes case jurisdiction for some FECA claims arising in Maryland to the Philadelphia district office
Continuing a trend that started some years ago, OWCP has taken more cases away from the Washington DC district office and assigned them to the Philadelphia district office. This means that anyone with a claim that has been reassigned should assume that their claim is going to receive a renewed level of scrutiny.
It is critical that your file has current narrative medical reports addressing causation and your ongoing need for benefits from OWCP. Many of the cases being transferred to Philadelphia have not gotten much attention in a long time.
As a general rule of thumb, you should be seeing a doctor regarding your conditions not less than once every four months. OWCP expects to see "current" (not more than six months old) medical information from your doctor about your injury.
If there is not current information in your file you should expect to be shopped for a second opinion examination.
Here is the link from OWCP explaining the reassignment of case jurisdiction.
http://www.dol.gov/owcp/dfec/casejurisdiction.htm
It is critical that your file has current narrative medical reports addressing causation and your ongoing need for benefits from OWCP. Many of the cases being transferred to Philadelphia have not gotten much attention in a long time.
As a general rule of thumb, you should be seeing a doctor regarding your conditions not less than once every four months. OWCP expects to see "current" (not more than six months old) medical information from your doctor about your injury.
If there is not current information in your file you should expect to be shopped for a second opinion examination.
Here is the link from OWCP explaining the reassignment of case jurisdiction.
http://www.dol.gov/owcp/dfec/casejurisdiction.htm
Thursday, October 2, 2014
Ontario Ministry of Finance Has Provided Notice On Intent To Introduce New Rules For Service Providers
The Ministry of Finance is proposing to amend O. Reg. 7/00 to make it an unfair or deceptive act or practice (UDAP) for a person who provides or offers to provide goods or services for the benefit of a person who claims statutory accident benefits to communicate any false, misleading or deceptive information regarding their business or billing practices, services provided, or any other matter related to licensing.
This UDAP is intended to apply to both licensed and unlicensed service providers. An unlicensed service provider may not advertise that they are a licensed provider. A licensed provider that has had their licence suspended or revoked may not continue to advertise that they are licensed. This amendment would ensure that consumers can identify licence holders and avoid confusion about what licence holder status means. This will also discourage inaccurate claims about what a licence signifies.
In addition, the Ministry is proposing regulatory amendment to allow the Superintendent to apply variable administrative monetary penalties (AMP) to deal with significant contraventions of the regulations that can involve or potentially lead to improper billing practices. The service provider would have the opportunity for a hearing before the Financial Services Tribunal on the proposed AMP.
The Ministry is also proposing to amend O. Reg. 90/14 (Service Providers – Standards for Business Systems and Practices) to introduce a duty to report accurately to the Superintendent of Financial Services, in the periodic return established under section 288.4(5) of the Insurance Act, all information necessary to calculate any applicable fees established pursuant to section 121.1 of the Insurance Act.
The Ministry is proposing to amend O. Reg. 89/14 (Service Providers – Listed Expenses) to prohibit licensed service providers from invoicing claimants directly - they will receive direct payment from insurers. The proposed amendment will allow licensed service providers to seek payment for outstanding accounts directly from claimants in prescribed situations (where a full and final settlement has been reached and signed between the insurer and the insured person that includes these amounts).
Finally the Ministry is also proposing to amend O, Reg. 34/10 (SABS) to require claimants who go to unlicensed service providers to obtain specified billing information from their service provider and submit this information to their insurer when seeking reimbursement.
The SABS would also be amended to require insurers to provide HCAI the billing information when they reimburse a claimant for a "listed expense". These amendments will ensure the continuity of robust and more complete data collection by HCAI. It will avoid possible loss of data that may otherwise occur when claimants are invoiced directly by service providers who are not licensed to be paid directly through the central processing agency.
The Ontario government's Regulatory Registry is inviting stakeholders and interested parties to provide comments on these proposed regulations (that have yet to be made public). The deadline for comments is November 6, 2014.
Ontario's Regulatory Registry provides information on new proposed regulatory initiatives that could affect Ontario businesses and recently approved regulations that affect business. Regulations are approved by the provincial Cabinet.
Once a regulation is approved, a plain language summary of the regulation is posted on the Registry website, with a link to the regulation posted on the Government of Ontario's e-Laws website.
This UDAP is intended to apply to both licensed and unlicensed service providers. An unlicensed service provider may not advertise that they are a licensed provider. A licensed provider that has had their licence suspended or revoked may not continue to advertise that they are licensed. This amendment would ensure that consumers can identify licence holders and avoid confusion about what licence holder status means. This will also discourage inaccurate claims about what a licence signifies.
In addition, the Ministry is proposing regulatory amendment to allow the Superintendent to apply variable administrative monetary penalties (AMP) to deal with significant contraventions of the regulations that can involve or potentially lead to improper billing practices. The service provider would have the opportunity for a hearing before the Financial Services Tribunal on the proposed AMP.
The Ministry is also proposing to amend O. Reg. 90/14 (Service Providers – Standards for Business Systems and Practices) to introduce a duty to report accurately to the Superintendent of Financial Services, in the periodic return established under section 288.4(5) of the Insurance Act, all information necessary to calculate any applicable fees established pursuant to section 121.1 of the Insurance Act.
The Ministry is proposing to amend O. Reg. 89/14 (Service Providers – Listed Expenses) to prohibit licensed service providers from invoicing claimants directly - they will receive direct payment from insurers. The proposed amendment will allow licensed service providers to seek payment for outstanding accounts directly from claimants in prescribed situations (where a full and final settlement has been reached and signed between the insurer and the insured person that includes these amounts).
Finally the Ministry is also proposing to amend O, Reg. 34/10 (SABS) to require claimants who go to unlicensed service providers to obtain specified billing information from their service provider and submit this information to their insurer when seeking reimbursement.
The SABS would also be amended to require insurers to provide HCAI the billing information when they reimburse a claimant for a "listed expense". These amendments will ensure the continuity of robust and more complete data collection by HCAI. It will avoid possible loss of data that may otherwise occur when claimants are invoiced directly by service providers who are not licensed to be paid directly through the central processing agency.
The Ontario government's Regulatory Registry is inviting stakeholders and interested parties to provide comments on these proposed regulations (that have yet to be made public). The deadline for comments is November 6, 2014.
Ontario's Regulatory Registry provides information on new proposed regulatory initiatives that could affect Ontario businesses and recently approved regulations that affect business. Regulations are approved by the provincial Cabinet.
Once a regulation is approved, a plain language summary of the regulation is posted on the Registry website, with a link to the regulation posted on the Government of Ontario's e-Laws website.
Insurance News - Thursday, October 2, 2014
Here are the leading auto insurance headlines from ONTARIO AUTO INSURANCE TOPICS ON TWITTER for Thursday, October 2, 2014:
- Death, drones and driverless cars: how Google wants to control our lives.
- Here's how technology is being used to fight insurance fraud.
- Google is Uber's biggest investor. See where this is headed.
- New Minimum Capital Test Guidelines for P&C insurers coming in 2015.
- FSCO has received service provider licensing applications from 2,712 healthcare facilities. FSCO also maintains a public registry of licensed service providers.
- OSFI warns of lower underwriting profits if Ontario auto insurance rates are reduced by 15%.
Wednesday, October 1, 2014
Ontario Ministry of Finance Has Provided Notice On Intent To Change The Interest Rate On Disputed SABS Claims
The Ministry of Finance is proposing to amend the SABS (O. Reg. 34/10) so that when there is a dispute in respect of an insured person's entitlement to, or amount of statutory accident benefits, interest on overdue SABS payments is calculated at the prejudgment interest rate described in the Courts of Justice Act that is used for past pecuniary loss, and is payable from the date on which a mediation proceeding is commenced and ends on the date a settlement is reached or a decision is issued that finally disposes of the dispute.
The Ontario government's Regulatory Registry is inviting stakeholders and interested parties to provide comments on these proposed regulations (that have yet to be made public). The deadline for comments is November 6, 2014.
Ontario's Regulatory Registry provides information on new proposed regulatory initiatives that could affect Ontario businesses and recently approved regulations that affect business. Regulations are approved by the provincial Cabinet.
Once a regulation is approved, a plain language summary of the regulation is posted on the Registry website, with a link to the regulation posted on the Government of Ontario's e-Laws website.
The Ontario government's Regulatory Registry is inviting stakeholders and interested parties to provide comments on these proposed regulations (that have yet to be made public). The deadline for comments is November 6, 2014.
Ontario's Regulatory Registry provides information on new proposed regulatory initiatives that could affect Ontario businesses and recently approved regulations that affect business. Regulations are approved by the provincial Cabinet.
Once a regulation is approved, a plain language summary of the regulation is posted on the Registry website, with a link to the regulation posted on the Government of Ontario's e-Laws website.
Automatic Renewal Section of Policy Does Not Obligate Insurer to Renew
Does an "automatic renewal" section in a home owner's policy require the insurer to renew? A recent decision says "no".
In Merei v. State Farm Fire and Casualty Company, 2014 ONSC 1960 (S.C.J.), the plaintiffs' home was destroyed by fire eight days after their home insurance policy was cancelled. The insurer's underwriting department made the decision not to renew the policy after the plaintiffs made three claims and had a history of non-payment. The policy contained the following clause:
The Court disagreed, relying on the plain reading of the contract (and common sense). Justice Carey held that the policy was intended to allow for a renewal of the policy when the policy has not been cancelled. He stated, "It is contrary to all rules of interpretation and normal insurance practice to conclude the insurer intended that they could only cancel the policy if the policy was not in good standing".
In Merei v. State Farm Fire and Casualty Company, 2014 ONSC 1960 (S.C.J.), the plaintiffs' home was destroyed by fire eight days after their home insurance policy was cancelled. The insurer's underwriting department made the decision not to renew the policy after the plaintiffs made three claims and had a history of non-payment. The policy contained the following clause:
Automatic Renewal – if the policy period is shown as 12 months, this policy will be renewed automatically subject to the premiums, rules and forms in effect for each succeeding policy period. If this policy is terminated, we will give you and the Mortgagee/Lienholder written notice in compliance with the policy provisions or as required by law.The plaintiffs alleged that the "automatic renewal" section of their policy obligated the insurer to renew the policy as they were not in arrears, not in breach of any of the rules in the policy and had submitted all forms.
The Court disagreed, relying on the plain reading of the contract (and common sense). Justice Carey held that the policy was intended to allow for a renewal of the policy when the policy has not been cancelled. He stated, "It is contrary to all rules of interpretation and normal insurance practice to conclude the insurer intended that they could only cancel the policy if the policy was not in good standing".
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