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Ontario’s Ministry of Finance has announced new regulatory amendments to help prevent auto insurance fraud.
Under the new measures, announced January 21, the government proposes to:
• require insurers to provide claimants all reasons for denying a claim.
• give claimants the right to receive a bi-monthly, detailed statement of benefits paid out on their behalf.
• increase the role of claimants in fraud prevention (for example, by requiring them to confirm attendance at health clinic).
• make health care providers subject to sanctions for overcharging insurers for goods and services and banning them from asking consumers to sign blank claim forms.
The exact wording of the new regulations can be found at the following links:
The Ontario government said its proposed changes address some of the reforms proposed by the Auto Insurance Anti-Fraud Task Force, which issued its final report to the ministry in November 2012. The report made 38 recommendations for reducing auto insurance fraud in Ontario, estimated to cost up $1.6 billion per year, or up to $236 of a person’s average premium.
“The importance of our auto insurance reforms and the impact they will have on Ontario drivers cannot be underestimated,” Ontario Finance Minister Dwight Duncan said. “The government will continue to take the necessary steps to crack down on fraud which will help lower premiums, increase road safety and ensure people hurt in car accidents get the treatment they need.”
The Insurance Brokers Association of Ontario (IBAO) welcomed the measures as a good “first step” towards curbing auto insurance fraud in the province. But they noted the government had more work to do once the governing Liberal Party of Ontario chooses a new leader to succeed Dalton McGuinty.
“IBAO is pleased to see that action is being taken with the initial first steps announced today,” said IBAO CEO Randy Carroll. “However, there is still much more to do in order to tackle the fraud problem in Ontario auto insurance. The more fraud that is removed out of the system the better chance we have to see reductions in overall premiums and that’s why it’s essential to keep the ball rolling.”
Most recently, the Financial Services Commission of Ontario (FSCO) laid 84 charges under Ontario’s Insurance Act against two rehabilitation clinics and four individuals affiliated with these clinics.
“These clinics and individuals are alleged to have submitted false invoices to auto insurers,” FSCO noted in a statement. The charges have not been proven.
Fairview Assessment Centre and Pacific Assessment Centre were each charged with seven counts of knowingly making false or misleading statements to an auto insurer to obtain payment for goods and services provided to an insured, as well as seven counts of engaging in an unfair or deceptive act or practice.
