In 2003, the Legislature amended the Insurance Act (the Act) to include a requirement in section 289.1 that the Superintendent of Financial Services undertake a review of Part VI of the Act and any Regulations made under Part VI at least once every five years or more often if requested by the Minister of Finance. The Superintendent is to report back with recommendations to improve the effectiveness and administration of Part VI of the Act and the Regulations. Part VI of the Act and the Regulations includes statutory accident benefits, court proceedings and dispute resolution.

The Financial Services Commission of Ontario (FSCO) embarked on a stakeholder consultation process in the second half of 2008 to support the auto insurance review process. In addition, FSCO regularly hears from stakeholders on numerous issues. The opinions expressed by stakeholders represent a broad range of experiences and perspectives. Many of the recommendations in this report reflect the comments received through the consultation process.

In the past few years, profitability has not been an issue for the P&C insurance sector in Canada or Ontario. However, financial results for the P&C industry declined in 2008. Following the 2003 auto insurance reforms, loss costs fell in 2004. Loss costs have been rising since then and have resulted in an upward swing of rate changes approved by FSCO in 2008. However, rate increases have not kept pace with rising loss costs and the insurance sector reports significant rate inadequacy in the system. Declining profitability, significantly lower earnings and loss cost increases will accelerate in 2009 in the absence of structural changes to stabilize costs.

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Executive Summary
Recommendations
1. Introduction
2. Background

2.1 Previous auto insurance reforms
2.2 Review process

3. Affordability and Availability

3.1 Industry profitability
3.2 Premium and cost trends
3.3 Availability

4. Consumer Protection

4.1 Complexity of the accident benefits system
4.2 Accident benefit claim forms
4.3 Fault determination rules
4.4 Auto insurance quoting practices
4.5 Disputes between insurers
4.6 Vicarious liability

5. Statutory Accident Benefits Schedule

5.1 Definition of “catastrophic impairment”
5.2 Assessments and examinations
5.3 Access to treatment
5.4 Attendant care benefit
5.5 Health care provider fees
5.6 Other accident benefits
5.7 Interaction of the SABS with Workplace Safety and Insurance Act 51

6. Tort

6.1 Verbal threshold
6.2 Deductibles
6.3 Other proposed tort reforms

7. Dispute Resolution at FSCO

7.1 Payment for expert reports
7.2 Future care cost reports

8. Other issues

8.1 Collateral benefits
8.2 Seriously injured claimants
8.3 Public education
8.4 Public transit authorities
8.5 Electronic commerce
8.6 Rate regulation
8.7 Premiums based on distribution method
8.8 Timing of future reviews

Appendices

Appendix A
Appendix B

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