The RIMS Canada Council (RCC) represents Canada’s largest group of commercial insurance purchasers. Two of our chapters are based in Ontario. The Ontario Risk and Insurance Management Society (ORIMS), based in Toronto, and the Canadian Capital Chapter of RIMS (CCCRIMS), based in Ottawa, combined represent Ontario’s largest group of commercial insurance purchasers The two chapters have almost 400 individual members.

In preparation for our response to the Ontario Auto Insurance Five Year Review last July, we canvassed RIMS members in Ontario who manage risk for organizations in a wide variety of industries, including public and private sector entities. Our members comprise a wide range of motor vehicle ownership and operations issues, from municipal mass transit to private passenger-carrying vehicles. Their fleets range in size from a few vehicles to large fleets.

We are interested in this issue because our members often use insurance to transfer risk. However, there are many of our members who have large self-insured retentions or deductibles, which can be in the millions of dollars. They are responsible for claims that occur in this retained layer of risk and, therefore, many have in-house claims departments or contract with independent adjusters to handle these claims. The cost of administration and payment of these claims comes directly out of the member companies’ budgets.

Primarily, we proposed changes to the Statutory Accident Benefits Schedule (SABS). We believe that changes and improvements to the SABS could reduce the current degree of complexity and related costs involved in claims, as well as enhance compliance. Following are some of the specific areas where change has been requested:

• Global Auto Sales
• History of Claim Reporting: A Success Story
• Prevent Auto Theft
• Claims Cost Decrease; Claims Frequency Increase
• Brief History of Auto Reform in Ontario
• Virtual Roundtable: Auto Reform In Ontario
• Consumer Deserve a Better Auto Insurance System
• Guiding Principles in Auto Reform
• Risk Managers Weigh in on Reform
• Access to Justice Through Auto Insurance Reform
• Cap Costs in Ontario
• Auto Reform: Impact on Self-Employee

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• Our members experience claims from individuals, who do not have their own auto insurance, and are injured while passengers in vehicles owned by our member organizations, including city public transit vehicles, motor coaches, school buses, charter services and automobile fleets. In these cases, if passengers are injured, even with no liability to the organization that owns the vehicle, the organization’s insurance has to pay for the SABS. These benefits can be costly and cases can take years to resolve.With increased privacy laws, it can be difficult to determine whether claimants qualify for Statutory Accident Benefits claims. Our members have had situations involving claimants who denied having auto insurance at the time of their loss, both in statement and on application forms, even when they were actually insured. Claimants have denied knowing or having details about their last known auto policy number, insurer or type of car. Even when such information is eventually identified, there have been situations where the insurance company denies accepting priority due to time delays, even though the policy was in force at the time of the loss. This results in further expenses and increased costs for arbitration and other claims management functions. Since claimants must be responded to while investigations continue, we believe that insurers should not be exempt from paying for their claimants’ accident benefits or disputing priority when there is delay in information confirming valid coverage.
• Members who own vehicles that carry passengers (especially city operated buses) propose a cap on liability for auto accidents. We suggest the cap be set at $1 million, the same as the recently approved rental vehicle cap.
• Our members report that the SABS forms are too long and they would like to see revisions to make these forms more user-friendly. We offered to provide feedback to FSCO from our members to help reduce complexity and improve efficiency and compliance for the paperwork that is required.
• We also addressed consumer protection for victims of non-catastrophic injuries, and specifically suggested that the housekeeping limit of two years for this type of injury be reviewed. Accident victims may be well along the road to recovery after two years, but still need housekeeping and/or home maintenance assistance. Extending paid housekeeping services would help accident victims put their energies toward recovery and returning to work. A suggested revised limit could be four years or four months after a person returns to work full time. Such benefits should be accessible to consumers immediately and without litigation.
• The final issue we addressed was the 2006 ruling on priority of payments for rental vehicles that made the renter’s personal insurance the primary coverage for daily rentals, even if the vehicle is being rented to conduct business for an employer. This change to the Insurance Act was intended to close a loophole for vicarious liability imposed on long term leased vehicles, however, daily rental vehicles were also included in this change, causing a great deal of misunderstanding both by consumers and rental agencies. This has resulted in an inequity whereby an employee who rents a vehicle for his or her employer’s business personally bears the primary liability associated with operating that vehicle. We believe that this ruling needs to be reviewed.

Kim Hunton is the corporate risk manager for the City of Ottawa, ON. Risk management functions in the City include claims services, insurance administration and risk management services, which are delivered by a staff of 16. Kim has been an active member of RIMS for two decades.