Ontario Removes Prohibition On Auto Insurance Premium Rebates

In a move prompted by the COVID-19 crisis, the Ontario government modified the “Unfair or Deceptive Acts or Practices” regulation under the Insurance Act of Ontario in order to reduce barriers to rebating or reduction of automobile insurance premiums by automobile insurers or brokers of automobile insurance policies.

The prohibition against rebating has typically been a consumer protection measure to prevent insurers or brokers from offering an inducement to insureds to purchase policies, with an understanding that the insureds would get some additional benefit, beyond the insurance policy itself. Apart from protecting consumers from being misled, this prohibition also provides consumer protection against discrimination. Similar prohibitions exist in other provinces and territories of Canada.

The regulatory prohibition in section 2 of O. Reg. 77/00, the Unfair or Deceptive Acts or Practices regulation is against, among other things:

  1. making, or attempting to make, directly or indirectly, an agreement with an insured or applicant for insurance, as to the premium to be paid for an insurance policy that is different than the premium stated in the policy;
  2. paying, allowing, or giving, directly or indirectly, or offering or agreeing to give, a rebate of all or part of the premium stated in the policy to an insured or applicant for insurance; and
  3. paying, allowing, or giving, directly or indirectly, or offering or agreeing to give, consideration or other value intended to be in the nature of a rebate of premium to an insured or applicant for insurance.

However, as a result of the spread of COVID-19 and the declaration of an emergency in the province of Ontario under the Emergency Management and Civil Protection Act, automobiles are being used much less frequently, which means that, taken together, the risk assumed by automobile insurers is less than existed at the time of application or underwriting of the applicable policies. Accordingly, some automobile insurers had expressed a willingness to refund to insureds portions of annual premiums, or to reduce monthly charges of insurance premiums, based on reduced vehicle usage during the declared emergency. The regulatory prohibition on rebating had caused some uncertainty for insurers or brokers looking to provide this relief.

As a result of the change, a rebate or reduction of automobile insurance premium is not considered to be an unfair or deceptive act or practice if:

  1. an emergency is declared under Ontario’s Emergency Management and Civil Protection Act;
  2. the rebate is issued in response to that declared emergency; and
  3. the automobile insurer files an undertaking with the Chief Executive Officer of the Financial Services Regulatory Authority (FSRA). FSRA has provided a sample form of undertaking as a starting point for insurers, which effectively commits the insurer to offering premium rebates in a manner consistent with applicable law and FSRA’s regulatory guidance.

Rebates of all or part of an automobile insurance premium are not considered an unfair or deceptive act or practice from the date of declaration of an emergency (in the case of COVID-19, March 17, 2020) to the date that is one year after the date that the declared emergency is terminated.

Ontario is the first Canadian jurisdiction to loosen restrictions on rebating during a declared emergency. We expect some other jurisdictions to similarly permit premium rebate or reduction programs. As we noted previously, the Office of the Superintendent of Financial Institutions – the leading financial and solvency regulator of insurers in Canada – has made it easier for insurers to grant deferrals for payment of insurance premiums.

In addition to this regulatory change, Ontario’s FSRA, as the market conduct and consumer protection regulator in Ontario, issued a regulatory guidance with the following highlights:

  1. In order for premium rebating as described above (whether a refund, rebate, or reduction of insurance premium) not to constitute an unfair or deceptive act or practice, it must be:
    1. consumer-focused (providing financial relief where premium charged was based on risk factors that are no longer “just and reasonable” and have materially reduced during a specified period of time related to the applicable emergency);
    2. transparent and disclosed through clear and public communication by the insurer;
    3. equitable, by being consistent and not discriminatory among insureds, for example the benefit to consumers varies only based on premium paid;
    4. fair, by not being a prohibited anti-competitive practice such as tied selling, or an inducement to purchase or renew an insurance policy; and
    5. time-limited, by being undertaken during or immediately following an emergency declared under Ontario’s Emergency Management and Civil Protection Act, with a goal of providing financial relief to consumers in respect of that emergency.

Where the above criteria are satisfied, FSRA has expressed support for premium repayment programs, given the mismatch between premium levels and associated risk, and the nature of these programs as directed at relieving financial hardship among consumers, rather than permitting insurers to obtain an unfair competitive advantage or unreasonably preferring certain consumers over others.

FSRA has recommended that insurers engage with FSRA early in the design of a premium rebate program to confirm that the intended program is appropriate. In particular, FSRA has requested from insurers the following premium rebate program information prior to implementation:

  1. how rebates will be calculated;
  2. how rebates will be provided to customers;
  3. at a high level, how customers will be impacted by the rebate program;
  4. how the rebates will comply with FSRA’s principles; and
  5. the intended form of undertaking to FSRA’s Chief Executive Officer that commits an insurer to developing a rebating program and implementing this program in accordance with the above-noted principles.

FSRA will sign and return to insurers undertakings as evidence for the insurer that the undertaking has been approved, with a new undertaking filed for each premium rebate program established by an insurer. FSRA has noted that insurers who fail to administer their rebating programs in accordance with FSRA guidance and their undertakings will lose the benefit of the waiver of the prohibition against rebating.

  1. FSRA expects insurers to maintain records of rebates provided to their customers for use in future supervisory activity and reporting.
  2. Automobile insurance is a heavily-regulated industry, with mandatory rate filings. FSRA provided an approach to principles, processes and practices that it will follow when considering applications from insurers to reduce insurance rates in order to provide rate reductions or other relief to consumers.

Principles of the emergency rate review include:

  1. rate increases will not be considered at this time; only rate reductions will be considered, including new or increased discounts, lower (or eliminated) surcharges, lower (or eliminated) fees, and lower (or eliminated) charges on instalment payments;
  2. the proposed changes may not result in a premium rate increase to a customer on renewal, assuming a static book; and
  3. rate reductions may be implemented on a “use and file” basis, by which they may take effect prior to being reviewed by FSRA, let alone approved, provided that FSRA will work with applicable insurers to resolve issues that FSRA identifies and, if the issues are not resolvable, then FSRA may require the insurer to cease use of the revised rate filings.
  1. FSRA provided automobile insurers with a summary of some actions that insurers may take without FSRA review or approval, including:
  1. re-rating policies based on changes in risk profile;
  2. if appropriate and relevant, modifying or temporarily suspending the effective dates of filings to defer the implementation of rate increases;
  3. being flexible in exercising contractual and statutory rights, such as those relating to:
    1. payment plans and premium payment deferral;
    2. underwriting rules and allowing exceptions for customers experiencing a period of financial difficulty, such as deferring decisions to non-renew customers who might otherwise be lawfully non-renewed; and
    3. cancelling policies or suspending coverage;
  4. allocating more resources to insurer call centres and underwriting;
  5. extending certain coverages where appropriate (e.g. to non-owned vehicles, or to loss of use); and
  6. waiving certain standard policy exclusions (e.g. use of personal vehicles to deliver food and other products).

It is likely that FSRA will ask insurers to report on actions taken during or as a result of the COVID crisis, along with the impact on customers of these actions.

The McCarthy Tetrault LLP Insurance Law team is available to assist insurers and brokers who have questions about proposed rebating programs, including draft undertakings, or other regulatory or transactional matters.

Source: Mondaq

Pandemic reduces ICBC’s claim costs, but crashes investments, says Eby

VICTORIA _ The COVID-19 pandemic has sideswiped British Columbia’s public vehicle insurer, but the attorney general says it’s too soon to assess the potential damage.

David Eby, who is also the minister responsible for the Insurance Corporation of B.C., says claim costs are down about $160 million because there have been fewer accidents as drivers stay home.

But he says plunging prices on global stock markets have hit the corporation’s investment portfolio.

Eby says a clear picture of the pandemic’s affect on ICBC won’t be known until the end of the fiscal year in March.

At that time, he says ICBC will be in a better position to decide whether drivers will get a one-time rebate or if the money should be contributed to the corporation’s depleted surplus.

ICBC president Nicolas Jimenez says the corporation remains on track in implementing changes announced earlier this year that could save drivers about $400 a year.

This report by The Canadian Press was first published May 14, 2020.

Measuring Vehicle Speed with Radar


RadarDespite the fact that it is older technology, radar is still frequently used by police to measure vehicle speeds today. When used properly, it is an accurate method of determining how fast a vehicle is traveling. The courts also accept qualified radar evidence of speed during a trial as commonplace.

When I was trained to use radar to measure traffic speed it was a one day long course. We were taught the basic theory of operation including an explanation of the Doppler Effect which is the basis for the device. A written test followed to insure we understood what had been taught. Finally, we all went to the side of the road where we were given a chance to make some measurements under the watchful eye of an experienced officer.

I typically started my traffic enforcement shift by testing my radar and recording the results of the test in my notebook. These tests vary a little depending on the manufacturer and type of radar in use, but it usually consists of a power on self test or an internal test initiated by pushing a button, a phase where all indicators and display segments were lit simultaneously to show they were functioning and a tuning fork test.

Tuning forks substituted for the moving vehicle. The fork was struck to make it vibrate and then held in front of the radar antenna. This would produce a specific reading on the radar display.

If and only if all of these tests were passed was the radar considered ready for use. If there was a failure the unit was taken out of service and sent for repair.

During some 28 years of operating traffic radar I can only recall one instance when the radar failed to operate correctly and it was immediately apparent to me.

A typical investigation involving radar to measure vehicle speed begins not with the instrument, but with the officer’s eyes. A visual observation of the target is made and a speed estimation developed. Some officers become quite accurate in making this estimation after years of practice with the instrument.

Following the estimate, a measurement of the vehicle speed is made with the radar. The officer compares the estimate with the measurement to insure that the two reasonably coincide. If they do, the offending driver is stopped and ticketed. If they don’t, further observation and measurement is required.

Should the visual estimate and radar measurement never reasonably compare, a ticket based on the radar evidence cannot be written.

A radar beam is similar to a flashlight beam. It begins relatively narrow but widens as you move away from the antenna. Ideally, only the target vehicle should be in the radar beam at the time of the speed measurement, but this is not always possible. In this case, careful observation and measurement may still result in an accurate measurement and confidence in which vehicle is producing the speed reading.

Radar measurements also suffer from what is known as cosine error. If the vehicle being measured is moving directly toward the antenna, a true speed will be detected. If the vehicle is moving at an angle to the beam, a lower than true speed will be read depending on the cosine of the angle.

The benefit goes to the driver with stationary radar operations.

The cosine error is critical with moving radar as it affects the patrol vehicle speed reading which is used to calculate the violator’s speed from the closing rate of speed. The officer must compare the patrol vehicle speed to the speedometer when making a measurement. If the two are not the same, a higher than true speed will be displayed.

If all of this adds up, the speed investigation is complete and the officer can decide on what, if any, action to take.

The final step in my daily patrol after parking in the detachment lot was to test the radar again and record the results in my notebook.

Cst. Tim Schewe (Ret.) runs DriveSmartBC, a community web site about traffic safety in British Columbia. For 25 years he was an officer with the Royal Canadian Mounted Police, including five years on general duty, 20 in traffic and 10 as a collision analyst responsible for conducting technical investigations of collisions. He retired from policing in 2006 but continues to be active in traffic safety through the DriveSmartBC web site, teaching seminars and contributing content to newspapers and web sites.


Guide To Automobile Accident Benefit Forms

Statutory Accident Benefits (“accident benefits”) are available to those who are injured as a result of the “use or operation of a motor vehicle”. This includes passengers, drivers, cyclists, or those who are injured by motor vehicles as pedestrians. Accident benefits are available regardless of fault and are therefore often referred to as “no-fault” benefits.

Below is an overview of the most common Auto Insurance Claims Forms (“OCF Forms”) that automobile insurance companies require an injured person to complete in order to consider and adjust a claim for accident benefits. Copies of these forms are available to the public and can be obtained online.

While these forms must be completed accurately, they are often difficult to understand. Many are to be completed by the injured person, however, others are to be completed by healthcare providers or employers.

OCF-1 Application for Accident Benefits

Completion of the OCF-1 form begins the process for claiming accident benefits. It is mandatory and should be completed by anyone who is injured as a result of the use or operation of a motor vehicle. Whether someone has been injured as a result of the use or operation of a motor vehicle is not always clear. If you are unsure, it is best to seek advice from a personal injury lawyer.

OCF-2 Employer’s Confirmation Form

The OCF-2 form must be completed in order to claim income replacement benefits. A portion of the form must be completed by the employer(s) of the injured person for the 4 or 52 weeks prior to the accident. Where the applicant is self-employed, he or she may complete this form in its entirety.

OCF-3 Disability Certificate

The OCF-3 form must be completed by a healthcare provider. A list of the providers who may complete the OCF-3 can be found on the form itself. There is space in the OCF-3 form for the chosen health care provider to identify the applicant’s accident related injuries, limitations, and a prognosis for recovery, among other things. Insurers may request that this form be completed multiple times over the course of an accident benefits claim.

OCF-5 Permission to Disclose Health Information

The OCF-5 form allows the automobile insurance company complete access to all medical records from any health care provider or hospital. A personal injury lawyer can advise as to whether an applicant should sign the OCF-5. Often, a lawyer will ask the insurance adjuster which medical records are required and then request and provide to the insurer what is relevant. Typically, an insurer may only go back one year prior to the accident date.

OCF-6 Expenses Claim Form

The OCF-6 form is used to submit expenses incurred as a result of an accident, such as prescriptions, ambulance charges, attendant care costs, and parking receipts for accident related treatment. It is critical that applicants save receipts and invoices for such expenses to provide to the automobile insurer along with the OCF-6 form.

OCF-10 Election of Income Replacement Non-Earner or Caregiver Benefits

The OCF-10 allows an applicant to advise the insurer which of income replacement, non-earner, or caregiver benefits he or she intends to claim. While an injured person may qualify for more than one of the three benefits, an election must be made. A personal injury lawyer can help with the appropriate selection.

OCF-18 Treatment and Assessment Plan

The OCF-18 form should be completed by a healthcare provider or facility to request approval for treatment for accident-related injuries. If an applicant is participating in treatment and wishes for it to be covered by the automobile insurer, then he or she should have an OCF-18 form completed for consideration and approval.

OCF-19 Application for Determination of Catastrophic Impairment

The OCF-19 form is to be completed by a healthcare provider if an injured person wishes to apply for a catastrophic impairment designation, which allows for access to increased automobile insurance benefits. The automobile insurance company must officially designate an injured person as catastrophically impaired in order to recover these enhanced benefits.

Seeking legal advice

The forms that will need to be completed and the timing within which they should be completed varies, depending on the situation. It is critical that they are completed properly and accurately. These forms become part of an injured person’s accident benefits claim, and the adjuster and defense lawyers will have access to all or most of this file.

Originally published 15 APR 2020

Car insurance discounts available during the pandemic

Car insurance discounts available during the pandemic

The excerpted article was written by BY  

Vehicle insurance 

AllState Canada: AllState has created a one-time, “Stay at Home Payment” for customers with an active automobile policy as of April 8, 2020. Customers who qualify will receive a payment that’s approximately 25 per cent of their monthly premium.

The Canadian Auto Association: The CAA is offering a 10 per cent rate decrease for those who are new or returning policyholders and the discount will apply over a 12-month policy term.

Desjardins insurance: Refunds are available for those who have seen their driving habits reduced significantly due to COVID-19. Distance travelled will be calculated over a three month period to determine the amount of the refund. Customers need to apply by May 31 to qualify.

Economical Insurance: Economical is also offering refunds if there’s proof you’ve been driving less. You could be eligible for a 15 per cent reduction based on how many kilometres you’ve driven until June 30. Coverage suspension is also an option for customers who aren’t driving at all.

Aviva: Through their #StayatHome discount, Aviva is offering reductions of up to 15 per cent if you are driving less. To qualify for the savings, customers need to contact their broker or agent.

Wawanesca: The insurance broker is cancelling non-sufficient funds fees until May 25 and is offering options to reduce coverage if you are driving less so savings can apply.

Questions about COVID-19? Here are some things you need to know:

Health officials caution against all international travel. Returning travellers are legally obligated to self-isolate for 14 days, beginning March 26, in case they develop symptoms and to prevent spreading the virus to others. Some provinces and territories have also implemented additional recommendations or enforcement measures to ensure those returning to the area self-isolate.

Symptoms can include fever, cough and difficulty breathing — very similar to a cold or flu. Some people can develop a more severe illness. People most at risk of this include older adults and people with severe chronic medical conditions like heart, lung or kidney disease. If you develop symptoms, contact public health authorities.

To prevent the virus from spreading, experts recommend frequent handwashing and coughing into your sleeve. They also recommend minimizing contact with others, staying home as much as possible and maintaining a distance of two metres from other people if you go out.

From car insurance to TV streaming: All the discounts available during the pandemic


Fewer drivers during pandemic no excuse to speed

Fewer drivers during pandemic no excuse to speed

With fewer vehicles on our roads right now, drivers may be tempted to speed. Even though it seems safer with fewer cars on the road, it isn’t. Speeding increases your risk of crashing and reduces the amount of time you have to react to the unexpected. ICBC is asking that we all do our part to prevent crashes, keep people safe, and avoid putting additional pressure on B.C.’s first responders and medical resources.

Every year, 82 people are killed in speed-related crashes, making speed the number one cause of car crash fatalities in B.C.*

Police have observed an increase in drivers speeding since B.C. declared a state of emergency due to the Covid-19 pandemic. This is why ICBC, the B.C. government and police are launching a month-long campaign focusing on speed and urging drivers to slow down.

Speeding is a concern for all road users, not just drivers. Many families are taking this time to get outside for walks or bike rides so it’s important for drivers to be extra cautious and look out for pedestrians and cyclists.

The campaign includes radio and digital advertising plus social media reminding drivers that the faster you go, the easier it is to make a mistake. Remember, if you must go out, check your speed and drive within the limits.

Learn interesting facts, get tips and more on icbc.com.


Chief Officer Neil Dubord, Chair of the B.C. Association of Chiefs of Police Traffic Safety Committee

“While everyday life has recently changed for many in B.C., nothing has changed when it comes to road safety. Speed, distracted driving and impaired driving are just a few of the high-risk driving behaviours that put everyone at risk. With the use of intersection safety cameras and dedicated police agencies throughout the province, drivers are sure to be caught and held accountable when they make the choice to disregard the rules of the road.”

Lindsay Matthews, ICBC’s Vice-President Public Affairs and Driver Licensing

“Whether you’re a driver, rider, cyclist or pedestrian – we can all play our part over the coming months by only travelling when necessary, and taking extra care on every journey. Driving over the speed limit really doesn’t get you there noticeably sooner, and instead increases your chances of crashing.”

Regional statistics*:

  • On average, 26 people are killed every year in the Lower Mainland from speed-related crashes.

  • On average, 12 people are killed every year on Vancouver Island from speed-related crashes.

  • On average, 27 people are killed every year in the Southern Interior from speed-related crashes.

  • On average, 18 people are killed every year in North Central B.C from speed-related crashes.

*Police-reported data, five-year average from 2014 to 2018.

Speed includes unsafe speed, exceeding

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