News and Events

 EFFECTIVE SEPT. 1, 2010 CHANGES TO CAR INSURACE

The Financial Services Commission of Ontario (FSCO) is a regulatory agency established under the Financial Services Commission of Ontario Act, 1997 (FSCO Act). FSCO is responsible for handling all accident benefit disputes between accident victim and insurance company.

Section 11 of the FSCO Act requires that FSCO publish in The Ontario Gazette and deliver to the Minister of Finance by June 30 of each year a statement setting out the proposed priorities of the Commission.

This is FSCO’s thirteenth Statement of Priorities. The statement is part of a three-year strategic planning process that allows FSCO to develop appropriate strategies to meet changing economic and marketplace conditions. As an agency of the Ministry of Finance, FSCO’s strategic priorities are developed as part of government-wide planning and reflect broader government priorities.

To fulfill its mandate, FSCO has adopted a culture of partnership and dialogue with the Ministry of Finance, consumers, pension plan beneficiaries and other stakeholders. FSCO interacts with and updates its stakeholders as needed during the year through formal consultations and other communications channels. These strong working relationships help to further inform and refine FSCO’s activities.

This Statement of Priorities outlines FSCO’s strategic goals for the 2010-11 fiscal year and notes recent progress on significant projects. It includes a summary of environmental factors that were considered in setting the direction of these initiatives and a report-back section listing FSCO’s accomplishments in the previous year.

Many projects undertaken by FSCO are complex, involving many participants and require implementation in conjunction with federal and provincial jurisdictions. For this reason, some initiatives may span several years, with work continuing on an ongoing basis.

FSCO in Profile

FSCO is comprised of: the five-member Commission, the Superintendent of Financial Services and staff. FSCO regulates insurance, pension plans, loan and trust companies, credit unions and caisses populaires, mortgage brokerages and administrators and co-operative corporations in Ontario.

FSCO has a well-established and effective relationship with the Ministry of Finance, the ministry responsible for overseeing the activities of the agency. FSCO works with the Ministry to implement changes to legislation and regulations that have been identified as priorities by the Ministry and the government. FSCO also makes recommendations to the Minister on matters affecting the regulated sectors.

Financial Services Commission of Ontario Five-Year Review Reform Simplified Filing Guidelines for Proposed Revisions to Other Than Private Passenger Automobile Insurance Rates and Risk Classification Systems.

GENERAL INFORMATION

These Filing Guidelines are to be used for filing rate and risk classification changes for categories of automobile insurance other than Private Passenger Automobile (Other Than PPA) as a result of reforms from the Five-Year Automobile Insurance Review.
The reforms include a reduction to compulsory accident benefits coverage, with the ability for consumers to buy enhanced optional benefits. Actuarial costings have shown that the reforms should result in significant decreases in the cost for standard accident benefits coverage. There will also be some increase in tort cost. The reforms also are expected to significantly lower the future trend rate for the standard accident benefits coverage. It is required that all renewals be issued with the standard accident benefits coverage. For other coverage, renewals will be issued at the limits or deductibles that consumers had previously selected.

The reforms also include a change to Ontario Regulation 664, such that an insurer may no longer use as an element of a risk classification system a claim where the insured was 25% or less at fault, arising out of accidents occurring on or after September 1, 2010.
As a result of regulation changes, insurers that write non-fleet automobile insurance on OAP 1 or OAP 2 will be required to send rate and risk classification filings to the Financial Services Commission of Ontario (FSCO) by April 15, 2010. The current base rates included in this submission must be those that have been approved by FSCO on or before March 10, 2010.

Required Filing

As a result of these auto insurance reforms, insurers are required to take the reforms into consideration and make certain changes to their current risk classification systems and rates and send a filing to the FSCO. These changes that insurers are to include in filings are listed below:

1. Changes to standard statutory accident benefits rates to reflect:
• elimination of standard caregiver, housekeeping and home maintenance benefits for non-catastrophic injuries;
• lowering of standard medical and rehabilitation benefits limit to $50,000 from $100,000 for non-catastrophic injuries; Financial Services Commission of Ontario Five‐Year Review ReformMarch 2010 Page 1 of 6 Other Than PPA Simplified Filing Guidelines
• lowering of standard attendant care benefits limit to $36,000 from $72,000 for non-catastrophic injuries;
• changing the income replacement benefit calculation from 80% of net income to 70% of gross income;
• introduction of $3,500 cap on medical/rehabilitation expenses and assessment/examination report costs for minor injuries;
• other changes to standard accident benefits as outlined in Appendix D of the Five-Year Review Reform PPA Simplified Filing Guidelines.

2. Rates for the following optional accident benefits:
• increased medical and rehabilitation benefit to $100,000 for non-catastrophic injuries;
• increased attendant care benefit to $72,000 for non-catastrophic injuries;
• increased medical and rehabilitation benefit to $1,100,000 and increased attendant care benefit to $1,072,000 for non-catastrophic injuries;
• caregiver benefit of up to $250 per week for first dependant plus up to $50 per week per additional dependant for non-catastrophic injuries, and housekeeping and home maintenance benefit of up to $100 per week for non-catastrophic injuries;
• dependant care benefit of up to $75 per week for first dependant plus up to $25 per week per additional dependant, to maximum of $150 per week;
• increased income replacement benefits;
• increased death and funeral benefits;
• indexation benefit.

1. The introduction of a $500 deductible for the Direct Compensation - Property Damage (DC-PD) coverage (if an insurer does not currently offer a $500 deductible).

2. The introduction of Ontario Policy Change Form 48 (OPCF 48) providing optional first party coverage offsetting the statutory third party liability tort deductible of $30,000 for pain and suffering awards, and $15,000 for family members under the Family Law Act, to $20,000 and $10,000, respectively.

3. Revised wording for the definition of a rateable at-fault accident to be used in risk classification systems, reflecting the requirement that no claim arising out of an accident occurring on or after September 1, 2010 for which an insured is 25% or less at fault be used as an element of an insurer’s risk classification system.

Optional Components of the Filing

Insurers, at their option, may also choose to re-align the rates charged for other coverages. The conditions for filing under this simplified format for these changes are:
• on an all coverages combined basis the rate level change cannot exceed 0%; the rate change for any coverage cannot exceed 0% except in the case of Liability

Copies of Regulations

The new SABs, the regulation amendments and the Insurance Act can be downloaded from the e-laws website at www.e-laws.gov.on.ca. The regulations will also be published in The Ontario Gazette on March 13, 2010.

Suffered a Personal Injury?

Critical Timelines:

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We represent clients who have been denied benefits through a group disability insurance policy or a private policy. These cases are usually a great deal dependent on obtaining the required medical evidence to prove the disability in a way contemplated by the policy. Most insurance policies contain time limits that can be difficult to interpret and insurance companies are always looking at being able to deny, delay or dispute your claim. We encourage you to contact us to discuss your case to see if we can be of assistance to you and your family.