The two objectives of auto insurance reform: IBC

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The Ontario auto insurance reforms are based on recommendations provided by the Financial Services Commission of Ontario’s Five-Year Automobile Insurance Review report, as well as feedback received from dozens of insurance industry, health care, legal and consumer experts and groups.

The Insurance Bureau of Canada said that premium increases in Ontario over the last decade have been due to skyrocketing medical rehabilitation costs as well as the cost of court awards.

ILSTV asked Barb Sulzenko-Laurie, IBC’s Vice President of Policy if it’s fair to say that these latest reforms are being implemented in order to reduce claims costs.

Barb Sulzenko-Laurie: I think it’s fair if you emphasize that there are two objectives here. One is that injury costs were escalating at out of control rates here in Ontario. I’ve got some statistics here that show that injury costs rose 81.5 percent between 2004 and 2009 in Ontario. In the last two years and only the last two years, the increase was 21 percent. There’s no health care system in the world that can sustain those kinds of cost increases. If we were seeing those kinds of increases in the publicly-funded health care system and the implication for our taxes, you can rest assured that it would be a front page story, as it is becoming a front page story for auto insurance because ultimately that’s being reflected in higher premiums and everyone who wants to drive a car in this province has to pay for auto insurance. It’s the affordability of auto insurance for everyone that wants to drive – rich or poor. It’s almost like the key public policy concern.

But there’s another issue, as well and I think it’s a very important issue. Let me just take you back to when I had my appendix out many, many years ago, I stayed in the hospital for a week. More recently, in the last week, actually, a good friend of mine had her appendix out and she was in the hospital overnight. The reason she was in the hospital overnight was not because they were trying to cut costs but rather because medical science has improved to the point where they now know that there are risks of blood clots if she stays in bed after her operation and that there’s risks of delayed recovery if she doesn’t activate herself. Similarly with respect to injuries from motor vehicle accidents, most of which are sprain and strain, muscle, tendon injuries, the medical science is saying get back on your feet, get back to work and that’s the quickest route to full recovery.

What we’ve had in Ontario is a system that’s so, so lush with benefits and many, many stakeholders taking advantage of the availability of those resources to prescribe treatment plan after treatment plan, assessment after assessment. One result of that is people who in other jurisdictions and in other circumstances would recover quickly are “sick” or injured for an extended period of time.

We think it’s time that Ontario comes into the 21^st century with respect to the application of medical science to the treatment of these kinds of injuries. We’ve done some studies of our own in this regard comparing recovery rates in Ontario and Alberta and they’ve been published in peer-reviewed journals. We think the evidence is pretty strong that with a more appropriate focus on getting well as opposed to using all of the resources that are potentially available in the system, injured people are better off.

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