Combatting Fraud: Tips from Insurance Canada

Source: Collision Repair Magazine

Toronto, Ontario — History has demonstrated a concerning pattern: in times of economic crisis, there is a huge surge in insurance fraud across most businessesincluding the automotive industry.

During this unprecedented time Tom Hawkins, West Bend Mutual Insurance’s Director of Claims predicts that fraud will increase dramatically, which is why they released a report to arm businesses with the best practices and examples to keep a lookout for.

Expect opportunistic fraud

When human interaction is low, staged incidents and accidents become more common. The industry should look out for:

  • An increase in staged accidents and vehicle thefts
  • Procedure billing for phantom services (including telehealth)
  • Fake accidents occurring at homes

Thwarting fraud 

Embracing technology could be your best bet right now. With the right AI and machine learning in place⁠—alongside strategically built business rules based upon a global understanding of these types of situations⁠—business owners can continue to run their business without worrying about the risk of similar organized fraud occurring elsewhere in the business.

Using analytics can help identify the perpetrators through advanced methods, some of which include:

  • Entity resolution, including detecting altered identities
  • Network analytics
  • External data sources
  • Simply looking at prior claims history

CMPA proposes ‘industry-wide solution’ to insurance conundrum

The excerpted article was written by

Source: Realscreeen

The Canadian Media Producers Association (CMPA) is in the process of developing a proposal that, if accepted, would see the federal government serve as a backstop for COVID-19 insurance claims.

Under the proposed solution – a detailed version of which will be submitted to the federal government in the coming days – producers would pay premiums for COVID-19 insurance coverage, which would go toward a funding pot designated for potential claims. The government would only be called upon to contribute financially if the funds generated through the sale of the COVID-19 policies was insufficient to cover the claims made, said the CMPA.

Since the production shutdown in mid-March, insurance companies have changed their coverage options so that claims related to COVID-19 (and communicable diseases more generally) are not covered. Across North America, the insurance industry as a whole is counting billions in losses and pending claims stemming from the onset of the COVID-19 pandemic.

“The CMPA is acutely aware that insurance companies are not offering COVID-19 coverage for the production sector at this time. Left unaddressed, this would mean the financial consequences associated with another industry-wide shutdown, or an on-set COVID-19 incident, would fall primarily to the producer. This would be potentially devastating to our sector and a significant barrier to the start up or resumption of production for many of our members,” read a statement from the CMPA. The association said it will also be reaching out to a “wide range of industry stakeholders to confirm broad support for this initiative.”

What remains unclear is how much producers would pay for the proposed premiums for COVID-19 coverage, and how much money would be in the pot. It is also likely that the government would need projections on how much a future production shutdown would cost before it committed to backstopping insurance claims related to COVID-19. (It should be noted that outside of exclusions for COVID-19 and/or communicable diseases, Canadian film and TV projects are still able to obtain insurance for production.)

While the implementation of on-set safety protocols and guidelines has dominated much of the discussion for the past two and a half months, the issue of how to resume production in the absence of insurance for COVID-19 has largely been viewed as the film and TV industry’s biggest obstacle, especially for higher-budgeted series, such as scripted dramas, that typically require larger casts and crews.

It is not simply a production issue, as bank loans, interim financing and financing contracts are typically contingent on the presence of insurance, making it all but impossible for independent Canadian projects TV projects to resume until a resolution has been found. It is supposed that unscripted projects and documentaries (which typically have smaller budgets and can be shot with smaller crews) will be able to navigate insurance issues more easily, however a clear route back to production has not been outlined for the unscripted or doc sectors in Canada either.

Other jurisdictions have proposed similar measures that would see the government acting as a backstop for COVID-19 insurance claims. Last week, the UK industry put forth a proposal that would see the government help cover the costs of shutdowns related to COVID-19. Other proposals have been put forth in Australia, France and elsewhere to help jumpstart the local production sectors, which are grappling with the same issues as Canada. In the state of New York, a proposal was floated last month that would also see the government backstopping insurance claims.

The unveiling of CMPA’s insurance proposal comes as Canadian provinces begin to release the guidelines for on-set processes in the age of COVID-19. Manitoba was the first province to release full details of its protocols, while Quebec also released its own guidelines yesterday. Other provinces, including Ontario, are expected to follow suit in the next week or two.

Previously the CMPA said it expects the production shutdown will mean at least a $2.5-billion shortfall in production spending ($773-million for Canadian content, $1.76 billion for the service economy) if film sets remain closed until June 31.

Dysfunction in long term care takes toll on overburdened workforce

 

THE CANADIAN PRESS

OTTAWA _ Conditions in long-term care are breaking the people who staff nursing and retirement homes, leading to worse care for the vulnerable seniors who live there, the head of the Canadian Support Workers Association said.

About 82 per cent of the more than 6,800 COVID-19 deaths in Canada have been linked to long-term care, shining a harsh light on an industry that was already in crisis.

Miranda Ferrier, president of the association, said she read the military reports about cases of abuse and neglect in Ontario and Quebec long-term care homes with the same disgust and anger as other Canadians.

Military members called in to help homes with COVID-19 outbreaks witnessed some staff seemingly ignoring residents’ cries for help for up to two hours, and force-feeding residents to the point of choking, along with many other medical and professional problems.

While Ferrier said there is no excuse for that behaviour, there are reasons for it. Personal support workers are breaking under a neglected system, she said.

“I’m a (personal support worker) too and I worked in long-term care for years, and I’m broken,” Ferrier said.

Another former Ontario personal support worker, who now works as a long-term care nurse, said the massive workload means she is forced to choose which residents will be neglected.

She spoke to The Canadian Press on the condition she be granted anonymity due to fear of facing repercussions at work.

“Just to make it through the shift you have to dehumanize the people,” she said.  “I have to walk past this person who’s yelling and try not to let it get to me.”

She said she and her co-workers try to do their best every day but it’s hard to look at herself knowing that she didn’t get to everyone.

“You feel like you’re drowning all day,” she said.

Many people have pointed the finger at support workers for the conditions in the homes, and Ferrier said she’s received several calls along those lines in recent days. But those people don’t understand that the workers are also victims, and have been for a long time, she said.

“They have no idea what’s going on in those homes. It’s totally unfair. I just think it’s totally unfair and it just makes me sick,” she said.

The profession is completely unregulated, workers are underpaid and typically underprepared for the huge workload, risks and mental, emotional and physical exhaustion associated with the job, she said.

“Many of them have developed post-traumatic stress disorder because of the load in long-term care, even pre-pandemic,” she said.

Statistics from the Ontario Workplace Safety and Insurance Board show support workers were six times more likely to be injured on the job than a police officer or firefighter in 2017, she said.

There’s no official accreditation needed to become a personal support worker. Most enter the homes having completed a one-year certificate program, eager to help people, but that’s difficult to do with a ratio of as many as 12 residents to one worker.

This is to say nothing of the lack of benefits and job security that has workers trying to cobble together enough hours at several long-term care homes to make a living.

That makes it hard to recruit people to the job.

“You get what you pay for, unfortunately,” she said.

It’s difficult to gather information about who these workers are, but the University of Alberta’s Translating Research in Elder Care program estimates many are immigrants or people of colour, and the jobs are overwhelmingly staffed by women.

The federal and provincial governments have stepped in to provide temporary wage increases to long-term care workers who have suddenly been deemed essential during the pandemic, but conditions have far from improved, Ferrier said.

The Canadian Support Workers Association has been trying to shine a light on the issues for years, and has called for those workers to be licensed, regulated and accredited as a step toward fixing long-term care.

Ferrier said she is now in talks with the Ontario government to create some kind of recognized regulatory body for personal support workers, but can’t say if or when the change will come.

 

How finding a ministerial home for CMHC caused ‘madness’ in November

By Jordan Press

THE CANADIAN PRESS

OTTAWA _ The head of Canada’s federal housing agency wrote a one-word email in November to sum up the time it took to figure out just which newly shuffled cabinet minister was responsible for the agency, which oversees billions in affordable housing spending and mortgage underwriting.

“Madness.”

The whirlwind journey is laid out in emails obtained by The Canadian Press under the federal Access to Information Act. Parts of the documents have been blacked out, citing privacy and internal government deliberations.

The Canada Mortgage and Housing Corp. manages the national housing strategy, which totals some $40 billion in federal and provincial spending, and billions more to help first-time home buyers and others applying for mortgages.

Before the 2019 fall federal election, things were clear: CMHC reported to then social development minister Jean-Yves Duclos, who oversaw the housing strategy and the government’s anti-poverty measures, including homelessness.

After the election, Prime Minister Justin Trudeau moved pieces around his cabinet, including Duclos, an economics professor who studied many of the issues Employment and Social Development Canada and CMHC handled.

Duclos became president of the Treasury Board. His old file was split between Ahmed Hussen, who took over child benefits and homelessness programs, and Carla Qualtrough, who handled the massive employment insurance file, among other employment and training programs.

The department, like all others after new cabinet ministers are sworn in, quickly prepared briefing documents. Normally, that would be done with some foresight ahead of time, but not always, said Kathy Brock, a policy studies professor at Queen’s University in Kingston, Ont.

“In some cases, the public service is reacting on the turn of a dime, and other times, no, they have a better sense of where the government is going and what it is going to do,” said Brock, who researches how the public service operates.

In either case, change can cause resistance or questioning within the public service, she said.

On the evening of Nov. 20, 2019, hours after the new cabinet was sworn in, CMHC reached out to arrange a briefing for Qualtrough, understanding the agency would report to her and not Hussen. The agency’s president, Evan Siddall, was going to be in Qualtrough’s Vancouver-area riding for a board meeting.

The answer an hour later from the office of the top public servant at ESDC: “We are still working to sort out where CMHC has landed,” the email reads, noting “it is not obvious.”

CMHC, the email said, would report to Hussen.

Not so, according to the Privy Council Office, the central bureaucracy that supports the prime minister and cabinet. It was Qualtrough.

“Fyi, I gather people aren’t sure about where we go,” Siddall wrote shortly thereafter to the ESDC’s deputy minister, Graham Flack.

Things weren’t any clearer the next morning, before briefing books for the new ministers were complete.

One senior official thought CMHC landed with Hussen because they couldn’t “see homelessness moving.”

No, Flack replied. The Privy Council Office “confirmed it is Minister Q. Flows from role as Min of ESDC,” he wrote, meaning the minister responsible for the department.

“I’d prefer separating homelessness and CMHC as it makes more sense in terms of balancing responsibilities,” the reply goes on to say. “I just haven’t had enough interaction to know how linked the two files are.”

A few more emails flew around, and the idea of separating housing and homelessness efforts between two ministers was considered “weird.”

“Dividing CMHC and homelessness between 2 ministers is not ideal _ similar to the world we were previously in on EI (employment insurance),” reads an early morning email on Nov. 21 to the department’s top brass.

“Not fatal if it happens and people will make it work, but definitely will make things more difficult and needlessly complicated.”

The Liberals unveiled their 10-year, $40-billion national housing strategy in late 2017 in partnership with provinces and territories. They’ve since boasted the total cost is over $55 billion, counting funding to help offset mortgage costs for first-time home buyers.

The strategy _ known inside government by the acronym NHS _ targets the building and updating of affordable housing and has obvious overlaps with a separate strategy to combat homelessness and reduce poverty levels.

“It would also be strange (and perhaps awkward) to have 2 different Ministers responsible for different elements of the NHS and yet accountable for shared outcomes,” reads another email to Flack as the morning rolled on.

And, finally, an answer.

CMHC got a call from someone involved in the transition team to say “it is Hussen and NOT Qualtrough,” an email to Siddall reads, and adds, “that was always their intention.” Similar calls went to people at ESDC, who learned Hussen was destined to be responsible for the department.

Siddall flipped the message to Flack.

“Madness,” Siddall wrote.

“I’m calling to give you the back story,” Flack replied.

Air Canada increases size of financing deal to roughly $1.4 billion

MONTREAL _ Air Canada has increased the size of a financing deal announced earlier this week to roughly $1.4 billion as it works to bolster its coffers to deal with the pandemic.

The company says the shares in the offering have been priced at $16.25 apiece. It plans to issue 30.8 million shares to raise about $500.5 million.

The airline will also issue US$650 million in convertible senior unsecured notes due in 2025, up from an initial plan for US$400 million.

The convertible notes will have an annual interest rate of four per cent and be convertible into Air Canada shares at a price of approximately US$15.35 per share.

The underwriters of the share offering have an option to purchase up to an additional 15 per cent of the shares, while initial buyers of the convertible notes will also have an option to purchase up to an additional 15 per cent.

Air Canada says it will use the cash to supplement its working capital and other general corporate purposes.

The airline said on May 4 it had $6.5 billion in unrestricted liquidity after drawing about $1 billion in March from its revolving credit facilities.

The carrier lost more than $1 billion last quarter and grounded the vast majority of its fleet as travel demand hovers near ground level while fixed costs persist, including aircraft leases, insurance and maintenance and hangar fees.

Insurance Policies, 1 Insured: Who Defends The Action, Who Pays The Costs Of The Defence, And Who Controls The Defence?

The excepted article was written by

McCague Borlack LLP

This was a dispute between AIG Insurance Company of Canada and Lloyd’s Underwriters in respect of the duty to defend a claim brought against the City of Markham.

The City rented a hockey rink to the Markham Waxers Hockey Club and associated entities. A young boy was injured while attending a game at the hockey rink. He sued the City, Hockey Canada and the Waxers for damages resulting from his injuries. The City was insured by Lloyd’s under a commercial general liability policy. It was also an additional insured to Hockey Canada’s and the Waxers’ insurance policy with AIG. The City and Hockey Canada each retained separate counsel through their respective insurers.

AIG acknowledged its obligation to defend the action on behalf of the City but claimed that Lloyd’s had a concurrent duty to defend and must pay an equitable share of the City’s defence costs. AIG also claimed it had a right to participate in the City’s defence, including the right to retain and instruct counsel, alongside Lloyd’s. The City and AIG brought competing applications to determine which insurers had a duty to defend the action. AIG appealed the application judge’s decision that it must defend the action on behalf of the City, pay the cost of defending the action on behalf of the City and collect any indemnification costs from Lloyd’s upon final conclusion of the action, and may not participate in the defence with separate counsel.

The issues on appeal were whether

  1. Lloyd’s owes the City a concurrent duty to defend,
  2. Lloyd’s must pay an equitable share of the City’s defence costs, and
  3. AIG has the right to participate in the defence, including the right to retain and instruct counsel.

As to the first issue, there was no dispute that AIG is a primary insurer. However, AIG argued that Lloyd’s is also a primary insurer and not an excess insurer, as was argued by the City. The Court of Appeal concluded that because the AIG policy contains no excess provision, AIG is the primary insurer for bodily injury or property damage claims arising from the operations of Hockey Canada and the Waxers up to its $5 million policy limit. Moreover, to the extent that the AIG and Lloyd’s policies cover the same claims, AIG must defend up to its policy limits, and Lloyd’s maybe an excess insurer. However, Lloyd’s must still defend the City against claims that fall outside the scope of the AIG policy and within the scope of its own policy.

As to the second issue, the Court of Appeal concluded that since there was no contract between the two insurers with respect to the defence, the most equitable allocation of the City’s defence costs would be to require AIG and Lloyd’s to each pay an equal share of the City’s defence costs and to adjust the costs as between them after final disposition of the action.

As to the third issue, both insurers’ policies provided that they have a duty and right to defend the action. However, due to the discrepancies in coverage between the two policies of insurance, each insurer alleged various conflicts of interest with respect to the other’s handling of the City’s defence. The Court of Appeal found that AIG has an interest in having liability determined on the basis of the City’s actions alone so that it is not responsible for any damages. The Court likewise found that Lloyd’s and the City have an interest in having liability determined on the basis of the operations of Hockey Canada or the Waxers and not from the actions of the City, so as to minimize their own damages exposure and guard against raising the City’s premiums.

The Court of Appeal, therefore, concluded that both AIG and Lloyd’s owe a duty to defend the City in the action, AIG and Lloyd’s must share the City’s defence costs equally, subject to a right to seek a reallocation of the defence costs at the conclusion of the action, and AIG has a right to participate in the defence, including the right to retain and instruct counsel.

The Court agreed with AIG’s suggestion that it implements a “split file” system to sequester personnel handling the defence of the City from those handling the defence of Hockey Canada and the Waxers. The Court concluded this would ensure that the potentially conflicting interests insured by the AIG policy are handled separately both internally and by separate counsel. However, the Court also instructed that

  1. the terms of this arrangement must be provided in writing to those involved in managing the defence,
  2. counsel appointed by AIG must fully and promptly inform the City and Lloyd’s of all steps taken in the defence of the litigation against the City such that each would be in a position to monitor the defence effectively and address any concerns,
  3. defence counsel must have no discussion about the case with either coverage counsel, and
  4. counsel for the City must provide identical and concurrent reports to the City and both insurers regarding the defence of the main action.

Read the full decision, or the other case study for May –“It’s 2020”: Bringing the Courts in Line with the Times During COVID-19, or go to MB’s index of articles regarding COVID-19.


The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Source: Mondaq News

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