Ontario's Car Insurance Regime Lacks Transparency

June 20, 2017, Kitchener, Ontario

Posted by: Robert Deutschmann, Personal Injury Lawyer

In a recent Windsor Star article written by Ken Rubin, an Ottawa consumer and right-to-know advocate has summed up the problems with Ontario car insurance regime so well that that I am not going to paraphrase him. please, read the article. The problems with auto insurance are not the cause of any single provincial government or party. They seem to have been a result of long standing frequent and cozy relationships between insurance company lobbyists and the governments that are intended to regulate them.

Ontario needs a truly independent insurance regulator that represents the needs of the customers as much as the needs of the companies. Our system is far from that. Until the problem is fixed we will continue to face high rates, poor coverage, and be challenged by the secretive relationships that exists between the government and industry.

The Windsor Star
Published on: June 9, 2017 | Last Updated: June 9, 2017 12:00 PM ED
By Ken Rubin

For two and a half years, Ontario’s Ministry of Finance and its rate regulator — the Financial Services Commission of Ontario — refused to release records of the Insurance Bureau of Canada’s efforts to influence and encourage government moves to reduce auto insurance coverage.

After denying my requests under the province’s Freedom of Information and Protection of Privacy Act, the ministry made submissions to the Information and Privacy Commissioner of Ontario claiming that the IBC was one of its confidential “consultant policy advisers” retained as a kind of an “expert panel.” Therefore IBC lobbying records and even its 2012 pre-budget consultation submissions should be considered policy advice and not released, it argued. The ministry made this claim despite the fact that it is supposed to regulate the IBC’s members.

The ministry also claimed in a sworn affidavit that IBC records were cabinet confidences. Since influential IBC positions were discussed at numerous identified Ontario cabinet meetings, IBC records must be subject to cabinet confidence and not made public, it said.

In May 2016, as part of my appeal of the ministry’s decision not to release the information, I argued that widening the cabinet exemption to include the IBC — an independent third-party stakeholder — would set a dangerous, unwarranted precedent.Had the Finance Ministry and its Financial Services Commission succeeded, lobbying groups’ submissions and meetings could have been hidden and freedom of information legislation severely compromised.

But thanks to the Information and Privacy Commissioner’s benchmark decisions in April (orders PO-3719 and PO-3720), those outlandish claims were dismissed.

As a result, the records from 2012 to 2014 that I requested were released in May. They show the IBC pressing Finance Ministry and Financial Services Commission officials through frequent communications, meetings and briefings.

In November 2013, the IBC urged the government to remain firm on a $3,500 cap for minor injury claims it felt were “vulnerable to disputes,” documents show. The bureau offered ways to tighten the cap, so that mediation and medical claims would be confined and protected from “being tested, attacked, expanded and dissected by numerous challenges.”

The IBC insisted government officials keep it informed about the development of regulations and legislation, for which it conveniently supplied drafts for the government’s consideration. For example, in August 2014, the IBC asked which measures “are ready to be presented to Cabinet” and “which recommended reforms contained in IBC’s submission of July 4 have been reviewed and are ready for constructive discussions with a view of finalizing proposed regulatory and legislative language.”

The day before a February 2014 cabinet meeting, the IBC asked – given pre-election “political uncertainty”— to be put on the agenda to discuss the government holding firm to bringing in alternate dispute resolution reform, licensing of rehabilitation clinics and reviewing costly towing practices.

Due to the government’s subsequent cuts to basic auto insurance, Ontario consumers now have to pay extra premiums for better accident coverage. In a market dominated by several large insurance companies, Ontario’s more than 9.5 million car owners still pay high auto insurance fees despite successive governments promising lower premiums.

Ontario’s auto insurance regulation system is far from independent and transparent. Other North American jurisdictions, like California, set auto insurance rates with truly independent regulators in charge after open hearings where consumers can challenge proposed rates. Data submitted by stakeholders like the IBC is subject to public scrutiny and the process is more transparent. The rates set and premiums established are fairer and lower than those in Ontario.

It’s time to end the secretive industry-government relationship that keeps the Ontario public in the dark and auto insurance premium rates high, with shrinking coverage and low benefits.

Ken Rubin is an Ottawa-based consumer and right-to-know advocate.

About Deutschmann Law

Deutschmann Law serves South-Western Ontario with offices in Kitchener-Waterloo, Cambridge, Woodstock, Brantford, Stratford and Ayr. The law practice of Robert Deutschmann focuses almost exclusively in personal injury and disability insurance matters. For more information, please visit www.deutschmannlaw.com or call us at 1-519-742-7774.

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