Bus crash survivor to get insurance payment ahead of legal battle

Laurie Fagan, CBC news

Derek Nicholson’s client Gwen Lambert suffered serious leg injuries in last month’s fatal OC Transpo crash at Westboro station. He says she’s relieved the city’s insurance company will give her an interim payment before her lawsuit is dealt with. 

An Ottawa woman suing the City of Ottawa after her legs were crushed in last month’s fatal double-decker bus crash is set to get a significant payout from the city’s insurance company.

Gwen Lambert was one of 23 people injured Jan. 11 when her OC Transpo bus slammed into a Transitway shelter at Westboro station.

Three people also died in the crash.

“Her condition is still very challenging, and my understanding is that she may not be able to walk for about a year. But it’s still not clear,” said her lawyer, Derek Nicholson.

Nicholson’s firm, Beament Herbert Nicholson LLP, has filed a negligence lawsuit for more than $6 million against the city, OC Transpo, the bus driver and the province of Ontario.

That amount is the “upper limit,” Nicholson said, that would compensate Lambert — who is still in hospital and is facing multiple surgeries, followed by lengthy rehabilitation — for her potential lost income, future health care costs, and pain and suffering.

Nicholson would not say how much Lambert would receive in the interim from the city’s insurance company, other than it was “tens of thousands of dollars.”

Lambert was riding this double-decker city bus when it struck the transit shelter at Westboro station on Jan. 11. She was one of 23 people injured in the crash. (Justin Tang/The Canadian Press)

Nicholson said he’d forged a strong relationship with the lawyer for the city’s insurance company after representing survivors of a 2013 collision between an OC Transpo bus and a Via Rail train in their own lawsuit.

The company’s lawyer “volunteered” the possibility of an advance payment, said Nicholson — an unusual offer in insurance industry negotiations.

“I don’t think liability is being seriously contested,” he said. “Obviously they haven’t admitted it yet, but the advance is a credit to what my client will be entitled to eventually.”

‘Immediate assistance’

The city declined an interview Wednesday about the payment.

However, deputy solicitor David White said in an email that interim payments were being covered by the insurer to “provide immediate assistance to those seriously injured and their families,” rather than forcing them to first wait for the litigation process to wrap up.

For now, only Lambert is receiving a payment, White said. The city’s insurer was “reaching out to other seriously injured plaintiffs through their legal counsel,” he added.

Nicholson said he was encouraged by the gesture, since one client he represented following the 2013 crash waited three years to receive money.

He said Lambert was “grateful” to have received the payment, making it “one less thing” she had to be concerned about.

“It’s an unfortunate accident, and I think the city wants to help people,” he said.

“It’s a pretty terrifying time. I know my client is stuck in a hospital still, and worrying about money isn’t something you want on top of that.”

Source: CBC News

Federal government insured Suncor’s Middle East misadventures

The excerpted article was written by  | The Globe and Mail

The federal government paid Calgary-based Suncor Energy as much as $600-million to compensate for Middle East oil and gas assets and income lost since the Arab Spring in 2011.

On Wednesday Suncor disclosed in its quarterly financial results that it had received $300-million in “risk mitigation” payments relating to its Libyan operations. This followed a separate $300-million payment linked to its Syrian enterprise in 2012. Suncor declined to answer questions about the payments.

Suncor reported a profit of $3.3-billion on revenue of $38.98-billion for the 12 months ended Dec. 31, 2018. With an enterprise value of $76-billion at the end of last year and daily production capacity of about 830,000 barrels, Suncor by any measure ranks among Canada’s largest energy companies.

Export Development Canada (EDC), the national export credit agency, has long offered political risk insurance. That insurance protects EDC’s customers against the dangers of doing business in high-risk emerging markets, such as expropriation, political violence and the inability to transfer or convert local currency. The insurance cushioned the blow for Suncor, which wrote off assets worth billions of dollars from its former Middle East operations.

Political risk insurance is a niche product, and Suncor’s claims are massive by both Canadian and international standards. The U.S. Overseas Private Investment Corp., one of the world’s largest political risk insurers, has paid out 300 settlements since it was established by president Richard Nixon in 1971; the combined value of those claims was only US$977.4-million.

Although a handful of commercial insurers have offered the product, the Crown corporation is known for taking risks the private sector would never entertain. In the years leading up to 2011, EDC charged a premium of around 1 per cent or slightly less for this insurance. EDC has typically earned around $10-million to $20-million in premiums annually from selling political risk insurance; at that rate, it would take decades to cover Suncor’s claims.

EDC underwrote Suncor’s insurance policy in 2006 at a time when Petro-Canada (which merged with Suncor in 2009) produced crude oil in Libya and was pursuing a new natural gas development in Syria, having just sold a portfolio of mature assets there. Petro-Canada began developing the Ebla natural gas project in Syria in the late 2000s, where it saw “significant upside potential.” Meanwhile, it also established itself as one of Libya’s larger oil producers through Harouge Oil Operations, a joint venture with that country’s national oil company.

The company pumped hundreds of millions of dollars in capital spending into the two countries. But it knew its overseas assets were threatened by unrest, economic and legal sanctions and war, and purchased political risk insurance from EDC and commercial insurers to mitigate those perils.

EDC, meanwhile, wanted to encourage more Canadian foreign direct investment. One way to accomplish that was by offering increased volumes of political risk insurance to Canadian companies interested in doing business in volatile emerging markets. In 2006 EDC broadened its political risk insurance program to cover a wider variety of investments. That year it underwrote $4.8-billion in political risk insurance, substantially beating its own target.

Canadians had little way of knowing about Suncor’s insurance policy. Although EDC disclosed most of its financing transactions since 2001, it reveals political risk insurance policies only when the beneficiaries were lenders such as banks. In 2006 it disclosed political insurance policies in Mauritania, Jamaica and Mexico, but none in the Middle East. EDC declined to answer most of The Globe’s questions about the Suncor policy. “We are obligated to respect the confidentiality of our policy holders and their policies with us,” it said in a statement.

EDC continued expanding its insurance business in the Middle East and Africa throughout the late 2000s, and by the dawn of the Arab Spring, 37 per cent of its political risk insurance portfolio resided in that region – by far its largest regional exposure.

The timing proved unfortunate.

Things soured quickly in February, 2011, when what began as anti-government rallies in Benghazi grew into an armed uprising against the government of Moammar Gadhafi. Meanwhile, pro-democracy protests in March, 2011, in southern Syria also mushroomed into widespread unrest throughout the country, prompting a crackdown by President Bashar al-Assad and, ultimately, civil war.

Responding to international sanctions, Suncor suspended operations in both countries. In Syria the suspension proved indefinite, and the company filed a claim to EDC in 2011. The following year, Suncor reported receiving $300-million in “risk mitigation” payments relating to its Syrian operations, without identifying the source. Meanwhile, EDC disclosed a $300-million claim without identifying the customer. “EDC had the largest political risk insurance claim charge in its history as a result of the turmoil in North Africa and the Middle East,” Pierre Gignac, EDC’s then-chief risk officer, mentioned in a 2013 commentary.

Another was coming.

Suncor’s withdrawal from Libya unfolded in a less straightforward manner. After Mr. Gadhafi was removed from power and murdered in 2011, Suncor was optimistic it could continue doing business under the new government. It resumed production later that year. But beginning in July, 2013, Suncor found its Libyan oil shut in again, a situation that worsened after export terminals it relied on were closed. The result was the same: As unrest escalated, Suncor concluded it could no longer operate in Libya, either.

Suncor received its second $300-million payment earlier this year. The company noted it might have to repay some of that sum “dependent on the future performance and cash flows from Suncor’s Libyan assets.” But as of press time, Suncor said continuing political risk continues to impede its production in Libya. As the latest payment has yet to appear in EDC’s financial statements, it’s not clear the Crown corporation paid the full balance.

In the years following Suncor’s monster Syrian claim, EDC disclosed additional political risk insurance exposures across the Middle East, including $300-million of liability in each of Tunisia, Qatar, Algeria and Yemen. EDC continues to offer this type of insurance, but in 2017 its total exposure fell below $1-billion for the first time in years, and its Middle Eastern liability had fallen to 10 per cent of its total portfolio.

EDC says it is self-funding. However, as a Crown corporation, its benefits from the federal government’s triple-A credit rating.

EDC declined to discuss whether it had changed its underwriting or risk management practices as a result of Suncor’s claims.

Jim Carr, the Minister of International Trade Diversification, bears primary responsibility for supervising the Crown corporation. In a statement, his office said: “In these cases, the political risk insurance was purchased under the previous government and these payments were simply following the contracts signed under those agreements.

“We will continue to work with the agency and their new CEO to ensure that they uphold the values of openness and transparency that Canadians expect. ” (Former long-time Bombardier executive Mairead Lavery was appointed EDC’s new president and CEO on Feb. 5, replacing Benoit Daignault, who held the post five years beginning in 2014. She is the first female to hold the position.)

In addition to Suncor, other Canadian companies have historically also experienced significant losses while operating abroad – often because of expropriation.

Robert Wisner, a lawyer with McMillan LLP in Toronto who specializes in international arbitrations, said disputes between companies and governments involving political risks are increasingly resolved under international investment treaties. “In that field there have been billion-dollar awards, including for Canadian companies,” he said. Prominent Canadian examples include Canadian mining companies operating in Venezuela such as Crystallex International Corp., Rusoro Mining Corp. and Gold Reserve Inc. that lost properties through expropriation in Venezuela.

“Obviously the billion-dollar cases are at the very high end,” he added, “but there have been other cases where awards have been paid out for hundreds of millions of dollars.”

Insurance Companies Use Emerging Technologies & Business Models to Shake Up Competition

Led by insurtech disruptors, novel business models are causing disintermediation in the insurance industry and altering power dynamics. The rise of technologies such as Artificial Intelligence (AI), Internet of Things (IoT), and smart devices is placing the spotlight on flexible services based on usage-based insurance, on-demand insurance and Prevention-as-a-Service models, which are redefining the role of insurance in people’s lives. These models will especially appeal to Millennials and Generation Z, the newest buying groups.

Lines of business such as liabilityproperty, and casualty will especially gain from models such as Prevention-as-a-Service,” said Lauren Martin-Taylor, Visionary Innovation Principal Consultant at Frost & Sullivan. “Even though insurtechs and start-ups are leading in addressing shifts in social, mobility, and technology trends by pioneering innovative business models, traditional insurers often back them or play an integral role.”

Frost & Sullivan’s recent analysis, The Future of Insurance, analyzes emerging insurable markets and business models, evolution in operations and the value chain, as well as disruptors and opportunities in various lines of insurance. It also covers technologies such as AI, augmented reality/virtual reality (AR/VR), blockchainwearablesimplantsself-healing materials, and automation. An overview of the trends and challenges in each market is presented along with industry best practices, notable activity, and case studies.

Forward-thinking insurers will look to realign their business strategies to tap the growth opportunities presented by:

  • Medical advances, wearables, and growth of the elderly population.
  • Rise in urban population density, particularly in Asia and Africa.
  • The largely untapped low-income demographic in developed countries, which holds huge potential for microinsurance and automation advances.
  • Biological augmentation technologies, which can transform the markets for life insurance and reinsurers.
  • High levels of digitization, increasing data breaches, and cyber threats.

“The auto insurance industry will be one of the most affected by the rising adoption of advanced technologies, as connected and autonomous vehicles will generate real-time data and improve underwriting accuracy,” noted Taylor. “In due course, the focus will shift from insuring drivers to insuring the vehicle, systems, and technology.”

The Future of Insurance is part of Frost & Sullivan’s global Visionary Innovation (Mega Trends) Growth Partnership Service program.

About Frost & Sullivan

For over five decades, Frost & Sullivan has become world-renowned for its role in helping investors, corporate leaders and governments navigate economic changes and identify disruptive technologies, Mega Trends, new business models and companies to action, resulting in a continuous flow of growth opportunities to drive future success

Slip-and-slide car accidents: When to tell your insurance and how to negotiate

By  | Global News

It’s slip-and-slide season in Canada. Much of the country is covered in ice and snow and facing negative double-digit temperatures — it’s the kind of weather in which even snow plows occasionally find themselves drifting.

Here’s what Canadian motorists should keep in mind.

Does your insurance need to know about a fender-bender?

Most Canadians know to contact their insurance after a serious collision. In fact, in those circumstances, you also have a duty to report what happened to the police or a collision centre.

In general, you should dial 911 immediately if anyone was hurt or killed, when a driver involved is uninsured, unlicensed or appears intoxicated, and in hit-and-run cases. Often, you also have to file a police report when the crash caused significant property damage.

In Newfoundland and Labrador, Nova Scotia, Prince Edward Island, Ontario and Alberta, the police should be involved if the overall damage looks to be more than $2,000. In New Brunswick, the threshold is $1,000.

Wherever you live, if a police report is warranted, you also need to call up your insurance company.

But many of the collisions that happen around this time of year are just fender-benders. Often, the damage is less than the amount of your insurance deductible.

Does your insurance really need to know about things like minor dents and scratches?

“If the damage is less than the deductible, you won’t get an insurance payout so there is no point in reporting it to your insurance company,” said Anne Marie Thomas of InsuranceHotline.com, an insurance comparisons site.

That, though, is as long as both you and the other driver agree that there is no need to contact the insurance company.

“If the other driver was not at fault and is going to go through insurance, then it’s best for you to let your insurance company know,” Thomas added, speaking to Global News via email.

There is also an important difference between simply notifying your insurance of an accident and making a claim for reimbursement of damages, said John Shmuel at Lowestrates.ca, a financial products comparison site.

Filing a claim will affect your premium but an accident report might not, depending on your insurance policy and whether it includes features like accident forgiveness, he added.

And while reporting a fender-bender could lead to higher premiums, keeping mum also comes with risks.

Sometimes, what looks like “a little bit of damage can result in big bills,” Shmuel said. Or you might discover that the person travelling with you at the time of the collision develops neck pain a few days later, he added.

Your vehicle is a write-off — now what?

Of course, icy roads and poor visibility can lead to far worse than a fender-bender. And it doesn’t take much, these days, for insurance companies to declare your vehicle a write-off.

If that happens, know that you don’t have to accept the first figure the insurance adjuster comes up with.

“You’re completely within your right to dispute that,” if the number seems too low, Shmuel said.

Your insurance will send you an offer that details how they came up with the number.

“Go through the report with a fine-tooth comb,” Shmuel said.

The insurance adjuster will justify her estimate with research that may include consulting used-car dealers and partner companies for vehicles of the same make, model, year and overall condition. You should do your own, parallel research, Shmuel said.

Canadian Black Book is the place to start, he added. The website provides a Total Loss Report with an independent estimate of your vehicle’s cash value based on the company’s database of comparable vehicles.

In addition to that, though, you should also search sites like Auto Trader and Kijiji, Shmuel said. Don’t just look at asking prices, though, which can be unreasonable. When you find an ad for a comparable vehicle, reach out to the seller to see if they are willing to provide you with proof of the final sale price.

You should also submit any receipts for repairs or upgrades done to your vehicle. If you’re just replaced the transmission, for example, your insurance should take that expense into account.

“If you can prove that the market value of your car is more than the insurance company is offering, then you can negotiate. Oftentimes this happens when the vehicle has low mileage and/or you can prove that it was in great shape,” Thomas said.

Source: Global News

Canada budget to include limited coverage for prescription drugs – sources

OTTAWA/TORONTO (Reuters) – Canada’s Liberal government will propose a limited expansion to the country’s universal healthcare system in the spring budget to cover part of the cost of prescription drugs, two sources with direct knowledge of the matter told Reuters.

The modest broadening of the healthcare program is set to become one of Prime Minister Justin Trudeau’s key campaign promises ahead of the October election, which is shaping up to be a close fight.

The government would not commit to meeting 100 percent of the cost of prescription drugs for those who have no insurance through their workplace, the sources said. That suggests the government is leaning toward a narrower, more insurance industry-friendly model of pharmacare, as it is called, than that recommended by a government health committee last year.

A spokesman for Finance Minister Bill Morneau declined to comment.

Officials have yet to decide how much detail to provide about the pharmacare system in the budget, which is expected in the week of March 18, the sources said. They may release a general commitment to boost coverage and leave the specifics for the campaign, they added.

But new information on pharmacare’s inclusion in the spring budget and its limited scope gives a first glimpse of the government’s blueprint for what has been called the “unfinished business” of Canada’s publicly funded healthcare system, called medicare.

The sources, who spoke in recent days, requested anonymity because they were not authorized to speak to the media.

Canada’s health system covers care provided in hospitals and doctors’ offices, but prescription medication remains largely the purview of private insurance, often offered through employers, and a patchwork of public plans geared primarily toward the old and the very poor.

Opinion polls consistently show strong popularity for Canada’s public healthcare system.

There have been calls for Canada to extend medicare to include prescription drugs since medicare came into existence in the late 1960s, and multiple studies have recommended its inclusion.

Surveys have found 20 percent of Canadians are either uninsured for prescription drugs or under-insured, and one in 10 Canadians goes without prescription medications because of an inability to afford them, according to the standing committee on health’s pharmacare report released in April 2018.

Manulife Financial Corp, Sun Life Financial Inc and Great West LifeCo are among the major insurers in Canada.

FILLING IN GAPS

The Liberal-dominated government health committee strongly recommended Canada adopt a universal, national pharmacare program that covers drug expenditures for all Canadians for a wide range of drugs.

That would not only improve equity and access, advocates said, but lower drug costs because there would only be one buyer negotiating with pharmaceutical companies.

The government’s budget watchdog estimated that would cost about C$20.4 billion ($15.5 billion) a year – a hefty price tag for the government, but offering an overall saving of C$4.2 billion compared with the total now spent on prescription drugs.

What the government is likely to include in its budget is a much more targeted plan aimed at filling the gaps in coverage not already filled by private insurance or existing public plans, the sources said.

That matches with the government’s finance committee recommendation late last year, which Morneau, himself a former benefits industry executive, has said he would prefer.

It is also in line with what the insurance industry has been asking for. Standing to lose business to a universal government plan, the insurers have argued that most Canadians have good private coverage and that pharmacare changes need only affect a small uninsured minority.

But the Liberals will likely face criticism from policy advocates and left-leaning political opponents for not pursuing a more comprehensive plan. Without a universal system overhaul, advocates argue, people will continue to slip through costly cracks in the coverage system.

An advisory council appointed to study the implementation of pharmacare is expected to come out with recommendations this spring.

A car burst into flames Monday after it plunged nine stories down a Miami parking garage.

MIAMI – A car burst into flames Monday after it plunged nine stories down a Miami parking garage.

The fire started around 6 p.m. at a parking garage on Biscayne Boulevard.

The garage uses a lift mechanism to park cars. A white Acura TL somehow fell from the lift into an elevator shaft and caught fire.

No one was hurt.

The car’s owner, Matt Olechnowicz, said he had just let work when he asked one of the valets to get his car.

“When I called for the car all of the sudden I thought I heard my car alarm going off and I hear a big bang,” Olechnowicz said. “I turn around and the car had fallen down the elevator shaft.”

He had spent years upgrading the car with custom parts.

“I saw it burn up. That’s the hard part. The car was almost like a kid to me,” Olechnowicz said. He thinks the valet left the manual car in gear when he put it on the lift.

“I believe they left it in gear and somehow the car started and it fell down nine floors,” he said.

Olechnowicz said the parking garage company promised to cover the costs of a replacement. It will certainly be an interesting insurance claim.

Source: NBC2 News

 

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