IBAO Optimistic Regarding Ontario Fair Auto Insurance Plan
(Toronto, Ontario) This morning, the Minister of Finance and the Attorney General of Ontario announced the Fair Auto Insurance Plan, which is aimed at providing structural reform of the auto insurance system across the province. IBAO strongly supports the majority of points highlighted in the government’s plan, but advises a well-considered implementation.
The government’s seven-point plan follows some of its direction from the David Marshall Report, Fair Benefits Fairly Delivered: A Review of the Auto Insurance System in Ontario, released last April. The plan highlights reforms such as working with the Law Society of Upper Canada to ensure contingency fees are fair and transparent; a FSCO-directed risk factor review; implementing standard treatment plans for common collisions; creating independent examination centres for assessment in serious collisions and resolving diagnosis disputes; and providing FSRA with rule-making authority. The government has not announced specifics of rate reduction at this point in time.
IBAO has been in regular contact with the Finance Minister’s office leading up to this announcement and participated in the formal auto insurance consultations that were held over the summer months. The IBAO is largely supportive of the recommendations outlined in Mr. Marshall’s report and we are pleased to see that a number of key changes we have been advocating for will be put in place.
Before the plan moves forward, it is important to remain cautious regarding both the risk factor review and the transition to FSRA, specifically regarding potential changes to auto insurance rates without those changes being overly disruptive. While the IBAO supports the need for a quick and capable modern regulator that can adapt to evolving consumer needs, we are concerned about changing too much too soon without the proper control of outcomes. Any transition should be conducted in a controlled manner to prevent short term swings in the market that could negatively affect consumers.
“Insurance brokers, who represent over six million policyholders in Ontario, encourage stabilizing auto insurance rates so they can provide affordable coverage that’s balanced with the necessary benefits and consumer protections,” states Colin Simpson, Chief Executive Officer of the IBAO. “We look forward to working with the Government throughout the implementation of these reforms.”
The IBAO has a long history of advocating for the best interest of the consumer and has been a champion for the limitation of referral fees, previously calling for transparency in all legal costs surrounding auto insurance, including referral fees. Prescribing a consumer-friendly and publicly available fee disclosure report should be required by all legal actors in order to protect the interests of the consumer.
The IBAO will closely collaborate with the government as their plan takes shape. As brokers with strong ties to our communities, we will continue to advocate for the best interest of our consumers.