Ontario government to take steps to reduce insurance fraud
Yesterday, the Ontario government unveiled its 2011 Provincial Budget and included key initiatives to combat insurance fraud in the province.
The government said that while the auto insurance reforms that came into effect in September 2010 targeted abuse and fraud in the auto insurance system, it plans to build on the reforms by implementing other initiatives including:
- working with the industry to use the newly established Health Claims for Auto Insurance (HCAI) database to detect potentially fraudulent activity. Use of the HCAI database by Ontario health care facilities or providers to transmit auto insurance claim forms to insurers was made mandatory on February 1, 2011;
- introducing new rules to ensure that treatments are provided as invoiced;
- establishing an auto insurance anti-fraud taskforce to determine the scope of auto insurance fraud in Ontario and make recommendations regarding detection, investigation, enforcement and consumer education. The government is committed to fully investigating the problem of auto insurance fraud and will establish appropriate working groups of stakeholders to develop collaborative approaches and solutions; and
- requiring auto insurers to annually attest that their companies have established effective compliance controls to satisfy the rules that protect the rights of policyholders and accident victims. This would help ensure that benefits are being delivered efficiently and effectively, balancing fair treatment of accident victims with insurance coverage affordability for all nine million Ontario drivers.
“However,” the Budget document says, “Renewal of other important parts of the act is long overdue. Accordingly, to further promote consumer protection and harmonization with other Canadian jurisdictions, the government will initiate a review of the remaining major parts of the Ontario Insurance Act — such as life insurance and accident and sickness insurance — as well as other insurance-related legislation. In addition, regulatory effectiveness will be enhanced by considering additional enforcement tools for the regulator, such as administrative monetary penalties. This will be the first review of these major parts of the legislation since 1962.”
The Insurance Bureau of Canada (IBC) says it commends the Ontario government for its efforts to combat insurance fraud.
“Insurance fraud is a problem that affects all Ontarians who are concerned about crime, public safety and increased auto insurance premiums,” said Ralph Palumbo, Vice-President, Ontario, IBC, in a statement. “We appreciate the efforts of the government for taking these first steps to combat this escalating problem and hope more will be done in the future. We look forward to continuing to work with the government and other stakeholders to do whatever is necessary to ensure that honest Ontarians and insurance providers are not victimized by fraud and abuse of the system.”
