C A N A D A’ S I N S U R A N C E A N D R I S K M A G A Z I N E . C A N A D I A N U N D E R W R I T E R . C A
M AY 2 0 1 7 PM#40063170
Turn Signal BY ANGELA STELMAKOWICH
Trends in PI Claims BY ARI KRAJDEN & NICHOLAS CARMICHAEL
30 Canadian Underwriter May 2017
Diesel in the Dust BY PETER HATGES
Great things happen when the right partners come together.
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We’re looking to partner with best-in-breed Brokers. Talk to us to find out more. Kathy Corbacio at 1-905-771-3297 (Ontario and Atlantic) Timothy L. Scott at 1-204-262-6103 (Manitoba) broker.caainsurance.com | Join the conversation @CAAforbrokers
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2017-04-20 9:52 AM
CANADIAN UNDERWRITER
VOL. 84, NO. 5, MAY 2017 CANADA’S INSURANCE AND RISK MAGAZINE. PUBLISHED BY NEWCOM BUSINESS MEDIA INC.
www.canadianunderwriter.ca
COVER STORY
Turn Signal
30
As the possibility of autonomous vehicles comes closer to fruition and sensors continue to collect more and more data, new technology trends raise the question of whether or not automotive manufacturers will take on a greater role in insuring vehicles. BY ANGELA STELMAKOWICH
FEATURES
25
42
Diesel v. Electric
Rate Regulations
As hybrid and electric cars increase in popularity, along with the availability of liquefied natural gas, the future of the diesel engine is being called into question.
Ontario’s auto rate and risk classification regime has not changed much since 1990, but it can still be confusing, especially for those insuring fleets in multiple provinces.
BY PETER HATGES
BY STEPHEN MOORE
27
15 Trends in Litigation
40 Appeal Tribunal
A tendency to file lawsuits well before the expiry of limitation periods and the availability of insurance covering legal costs are just some things insurers need to consider.
After a year of operation, Ontario’s Licence Appeal Tribunal seems to be resolving auto accident benefits disputes more quickly than the Financial Services Commission of Ontario. But it remains to be seen whether or not claimants are getting access to benefits more quickly.
BY ARI KRAJDEN & NICHOLAS CARMICHAEL
22 Random Testing Employers wanting to test vehicle operators at random could find themselves on the wrong side of the law as a result of a Supreme Court of Canada decision.
Informing Clients
Safety Advances
If a regulatory change will affect coverage for multiple policyholders, a broker who only sends out letters is taking a big risk.
Driver-assist technologies are among the safety features that can help reduce claims costs, but present special challenges to repair shops.
BY THE CIP SOCIETY
BY JACK ROZINT
45 Minor Injuries
A report released in April with 35 recommendations on Ontario auto has been well-received by the industry, but not so much by lawyers.
Arbitrators with Ontario’s Licence Appeal Tribunal tend to weigh in favour of insurers when presiding over disputes in which claimants say their injuries do not fall within the Minor Injury Guideline (MIG). The regulations do not paint a full picture of what injuries would take an applicant out of the MIG.
BY GREG MECKBACH
BY KADEY B.J. SCHULTZ
BY GREG MECKBACH
51
BY MAY GIBILLINI
37 Auto Reform
May 2017 Canadian Underwriter
3
(416) 510-6793 Twitter: @CU_Harmeet @InsuranceMedia Gary White the industry, providing marketers aTwitter: range ofinformation specialized to providing the most and with relevant news, (416)timely 510-6800 astelmakowich@canadianunderwriter.ca steve@canadianunderwriter.ca hsingh@canadianunderwriter.ca -6793 Twitter: @InsuranceMedia Editor (416) 510-6800 Editor 442-5600 Senior Publisher (416) ext. 3652 ve marketing communications opportunities. the industry, marketers with a rangeService of specialized (416) 510-6760 (416) 510-6793 Twitter:providing @InsuranceMedia Associate Editor Subscriptions/Customer National (416) 510-6800 ckbach Art Director and effective marketing communications Twitter: @CU_Harmeet Angela Stelmakowich Steve Wilson andhighly resources to insurance professionals from allopportunities. segments of Editor (416) 510-6800 Editor Greg Meckbach Senior Publisher Art Director h@canadianunderwriter.ca Gail Page Gerald Heydens and highlysteve@canadianunderwriter.ca Associate Editor effective marketing communications opportunities. astelmakowich@canadianunderwriter.ca ckbach (416) ext. 3652 Claims Art Director Associate Publisher Angela442-5600 Stelmakowich gmeckbach@canadianunderwriter.ca Steve Wilson Gerald HeydensSubscriptions/Customer Service CU_Greg Greg Meckbach Art Director (416) 510-6793 Twitter: @InsuranceMedia the industry, providing marketers with a range of specialized gpage@bizinfogroup.ca h@canadianunderwriter.ca Gerald Heydens Art Consultation astelmakowich@canadianunderwriter.ca Twitter: @CU_Greg steve@canadianunderwriter.ca Paul Aquino -6796 gmeckbach@canadianunderwriter.ca Gerald HeydensGail Page (416) 510-6800 Art Consultation Manual CU_Greg Sascha Hass 510-6793 (416) 510-6796 Associate Publisher Twitter: @InsuranceMedia Associate Editor (416) 510-5187 Art Consultation Twitter: @CU_Greg and highly effective marketing communications opportunities. Sascha Hass paul@canadianunderwriter.ca gpage@bizinfogroup.ca -6796 tor InsuranceMarketer.com VOL. 84, NO. 5, MAY 2017 (416) 510-6800 Art Consultation Greg Meckbach Director Paul Aquino Sascha Hass Canadian Underwriter’s Insurance Media Group is committed (416) 510-6796 Production Manager Associate Editor Online Editor Singh Sascha Hass gmeckbach@canadianunderwriter.ca Canadian Underwriter’s Insurance Media Group 510-5187 is committed Gerald Heydens Twitter: @InsuranceCanuk Production Manager (416) Circulation Manager tor Gary White Gregthe Meckbach Harmeet Singh Art Director to providing most timely and relevant news, information paul@canadianunderwriter.ca anadianunderwriter.ca Production Manager Online Twitter:Editor @CU_Greg Gary White to providing the most timely and relevant news, information Singh (416) 510-6788 (416) 510-6760 gmeckbach@canadianunderwriter.ca hsingh@canadianunderwriter.ca Gerald Heydens Production Manager Art Consultation Mary Garufi PROFILE to insurance from all segments of CU_Harmeet and resources Gary professionals White Harmeet Singh (416) 510-6796 Managing Director, (416) 510-6760 Editor Twitter: @InsuranceCanuk Senior Publisher Circulation Manager anadianunderwriter.caTwitter: and resources to insurance professionals from all segments of @CU_Greg @CU_Harmeet Gary White Sascha Hass -5600 ext. 3652the industry, providing marketers with a range of specialized Mediamgarufi@bizinfogroup.ca Group (416) 510-6760 Angela Stelmakowich hsingh@canadianunderwriter.ca Subscriptions/Customer Service Steve ArtInsurance Consultation Angela Stelmakowich Wilson National CU_Harmeet National (416) 510-6788 510-6796 (416) ext. 3652the industry, providing marketers with Mary a range ofGarufi specialized (416) 510-6760 Online442-5600 Editor Account Manager Subscriptions/Customer National astelmakowich@canadianunderwriter.ca the Service insurance industry’s social network Ian Portsmouth Twitter: @CU_Harmeet Gail Page Sascha Hass Canadian Underwriter’s Insurance Media Group is committed and highly effective marketing communications opportunities. astelmakowich@canadianunderwriter.ca steve@canadianunderwriter.ca Production Manager Claims -5600 ext. 3652 Claims (416) 442-5600 ext. 3545 Publisher Subscriptions/Customer Servicemarketing Harmeet Singh ian@canadianunderwriter.ca (416) 510-6793 Gail Page and highly effective communications opportunities. Michael Wells (416) 442-5600 ext. 3652toClaims gpage@bizinfogroup.ca Online Editor mgarufi@bizinfogroup.ca Associate Publisher (416) 510-6793 Subscriptions/Customer Service Twitter: @InsuranceMedia Gary White providing the most timely and relevant news, information (416) 510-6800 uino Manual Gail Page hsingh@canadianunderwriter.ca Production Manager Account Manager Manual gpage@bizinfogroup.ca Associate Editor Publisher (416) 510-5187 Harmeet Singh Paul Aquino Gail Page (416) 510-6800 (416) 510-6760 Print Manual InsuranceMarketer.com (416) 442-5600 3545 and resources to insurance from all segments of ext. Art professionals Director nadianunderwriter.ca michael@canadianunderwriter.ca gpage@bizinfogroup.ca Production Manager Associate Publisher Twitter: @CU_Harmeet InsuranceMarketer.com Gary White Associate Editor (416) 510-5187 Greg Meckbach uino Michael Wells hsingh@canadianunderwriter.ca paul@canadianunderwriter.ca gpage@bizinfogroup.ca InsuranceMarketer.com Gerald Heydens InsuranceCanuk gmeckbach@canadianunderwriter.ca (416) 510-5187 Paul Aquino Circulation Manager (416) 442-5600 ext. 3652 the industry, providing marketers with a range of specialized (416) 510-6760 Greg Meckbach Art Director Subscriptions/Customer Service 510-5122 National Phyllis Wright nadianunderwriter.ca (416) @CU_Harmeet Twitter: @InsuranceCanuk (416) 510-5187 Circulation Manager (416) 510-6796 michael@canadianunderwriter.ca -6788 Production Manager paul@canadianunderwriter.ca Print Production Mary Garufi gmeckbach@canadianunderwriter.ca Gerald Heydens Gail Page and highly effective marketing communications opportunities.Manager InsuranceCanukINSURANCE Claims Circulation Manager 442-5600 ext. 3652 (416) 510-6788 Associate Publisher Subscriptions/Customer Service Mary the insurance industry’s social network Online KarenGarufi Samuels Twitter: @InsuranceCanuk mgarufi@bizinfogroup.ca Twitter:Editor @CU_Greg Circulation Manager gpage@bizinfogroup.ca (416) 510-5122 National Account Manager -6788 Phyllis Wright Manager President Mary GarufiManual Paul Contant Aquino the insurance industry’s social network (416) 510-5190 Gail Page Art Consultation Jason mgarufi@bizinfogroup.ca National (416) 510-6788 Claims (416) 442-5600 ext. 3545 Associate Publisher (416) 510-6796 Account Manager Mary Garufi industry’s social network (416) 510-5187 DIRECTORY the insurance jcontant@canadianunderwriter.ca Wells mgarufi@bizinfogroup.ca paul@canadianunderwriter.ca Sascha HassManager gpage@bizinfogroup.ca Claims (416) 442-5600 ext. 3545 Creighton Circulation Elliot Ford InsuranceMarketer.com Manual Bruce Manager insBlogs Paul Aquino Michael Wells mgarufi@bizinfogroup.ca (416) 442-5600, Ext. 6893 Account Manager InsuranceMarketer.com Manual canadianunderwriter.ca (416)Production 442-5600 ext. 3545 President Account Manager Mary Garufi Print Manager Twitter: @InsuranceCanuk Online Editor (416) 510-5187 Circulation Manager Wells InsuranceMarketer.com paul@canadianunderwriter.ca michael@canadianunderwriter.ca INSURANCE eford@canadianunderwriter.ca (416) 442-5600 ext. 3545 Production Manager Print Production Manager Account Manager gs mary@newcom.ca -5122 Michael Wells Phyllis Wright Harmeet Singh (416) 510-6788 Mary Garufi Elliot Ford Bruce Creighton insBlogs canadianunderwriter.ca Vice President DIRECTORY Print Production Manager Twitter: @InsuranceCanuk (416) 510-5122 (416) 614-5831 Michael Wells Gary White Circulation Manager instouch.com Phyllis Wright (416) 510-5117 NCE michael@canadianunderwriter.ca hsingh@canadianunderwriter.ca Print Production Manager mgarufi@bizinfogroup.ca instouch.com mike@canadianunderwriter.ca National -5122 Manager Phyllis Wright (416) 510-6788 President eford@canadianunderwriter.ca Account Manager (416) 510-6760 INSURANCE Mary Garufi Print Production Manager the insurance industry’s social network Alex Papanou (416) 510-5122 Twitter: @CU_Harmeet Account Manager TORY (416) 510-5122 Phyllis Wright Claims (416) 442-5600 3545 President Insurance Blogs hosted by Canadian Underwriter rd Vice President Phyllis Wright ext. Bruce Creighton Michael Wells mgarufi@bizinfogroup.ca insBlogs insBlogs DIRECTORY Ontario Manager Manual (416) 510-5117 (416) 442-5600 ext. 3652 President Account Manager Elliot Ford Service Bruce Creighton InsuranceMarketer.com Account Manager insBlogs Subscriptions/Customer Ontario INSURANCE nadianunderwriter.ca Property & Casualty Insurance Newswire Account Manager michael@canadianunderwriter.ca (416)Production 442-5600 ext. 3545Papanou President Print Manager rd Property & Gail Casualty InsuranceAlex Newswire Bruce Creighton Michael Wells INSURANCE eford@canadianunderwriter.ca Christine Hirst Page Vice President DIRECTORY insBlogs -5117
instouch.com
insBlogs Ontario
instouch.com instouch.com instouch.com Ontario
Ontario insBlogs
instouch.com
the insurance industry’s social network
the insurance industry’s social network
Associate Publisher Elliot Ford (416) 510-5122 Ontario gs Bruce Creighton Phyllis Wright Vice President DIRECTORY nadianunderwriter.ca michael@canadianunderwriter.ca (416) 510-5117 gpage@bizinfogroup.ca Print Production Manager insBlogs instouch.com Paul AquinoAlex Papanou eford@canadianunderwriter.ca Insurance Blogs hosted by Canadian Underwriter
christine@canadianunderwriter.ca
erwriter Vice President (416) 510-5114 INSURANCE insBlogs Alex 510-5187 Papanou the insurance industry’s social network -5117 Connect with Canadian insBlogs Underwriter (416) 510-5122 (416) Insurance Blogs hosted by Canadian Underwriter Account Manager Phyllis Wright Vice President President urance Newswire paul@canadianunderwriter.ca (416) 510-5117 Papanou & Casualty InsuranceAlex Newswire DIRECTORY Property Property & Casualty Insurance Newswire Elliot Ford Alex Papanou Bruce Creighton Property &insBlogs Casualty Insurance Newswire Twitter: @InsuranceCanuk Account Manager Manager President InsuranceCirculation Blogs hosted by Canadian Underwriter Connect with Canadian Underwriter INSURANCE eford@canadianunderwriter.ca with Canadian Underwriter twitter.com/CdnUnderwriter (416) 510-6788 facebook.com/CanadianUnderwriter Elliot Ford Mary Garufi Bruce Creighton Connect with Canadian Underwriter Vice President DIRECTORY insBlogs.com (416) 510-5117 Insurance Blogs hosted by Canadian Underwriter insBlogs.com Insurance Blogs hosted by Canadian Underwriter mgarufi@bizinfogroup.ca eford@canadianunderwriter.ca with Canadian Underwriter Alex Papanou tter.com/CdnUnderwriter facebook.com/CanadianUnderwriter Account Manager Insurance Blogs hosted by Canadian Underwriter Insurance Blogs hosted by Canadian Underwriter Connect with Canadian Underwriter Vice President insBlogs twitter.com/CdnUnderwriter facebook.com/CanadianUnderwriter twitter.com/CdnUnderwriter facebook.com/CanadianUnderwriter (416) 442-5600 ext. 3545 (416) 510-5117 CanadianProperty Underwriter & Casualty Insurance Newswire Michael WellsUnderwriter .ca Papanou Insurance Blogs hosted by Canadian linkd.in/CanadianUnderwriter instouch.com/group/CanadianUnderwriter Property & Casualty InsuranceAlex Newswire tter.com/CdnUnderwriter facebook.com/CanadianUnderwriter InsuranceMediaGroup.com .ca michael@canadianunderwriter.ca twitter.com/CdnUnderwriter kd.in/CanadianUnderwriter instouch.com/group/CanadianUnderwriter facebook.com/CanadianUnderwriter Print Production Manager .ca MediaGroup.com linkd.in/CanadianUnderwriter instouch.com/group/CanadianUnderwriter Connect with Canadian Underwriter InsuranceMediaGroup.com (416) 510-5122 Phyllis Wright InsuranceMediaGroup.com linkd.in/CanadianUnderwriter instouch.com/group/CanadianUnderwriter kd.in/CanadianUnderwriter instouch.com/group/CanadianUnderwriter insBlogs.com
insBlogs.com
Ontario insBlogs.com insBlogs Insurance Blogs hosted by Canadian Underwriter
Insurance Blogs hosted by Canadian Underwriter
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insBlogs.com .ca
InsuranceMediaGroup.com
.ca
InsuranceMediaGroup.com www.CanadianUnderwriter.ca/MediaGroup Insurance Blogs hosted by Canadian Underwriter instouch.com/group/CanadianUnderwriter Published linkd.in/CanadianUnderwriter bywith Canadianwww.CanadianUnderwriter.ca/MediaGroup Connect Underwriter Accounttwitter.com/CdnUnderwriter Managerwww.CanadianUnderwriter.ca/MediaGroup facebook.com/CanadianUnderwriter President Insurance BlogsElliot hosted Ford by Canadian Underwriter Bruce Creighton erwriter iswww.CanadianUnderwriter.ca/MediaGroup published INESS MEDIA INC. thirteen times yearly (monthly + the Annual Statistical Issue) by twitter.com/CdnUnderwriter facebook.com/CanadianUnderwriter SINESS MEDIA INC. Canadian Underwriter iswww.CanadianUnderwriter.ca/MediaGroup published thirteen timesthirteen yearly (monthly + the Annual(monthly Statistical Issue) NEWCOM BUSINESS MEDIA INC. Canadian Underwriter iswww.CanadianUnderwriter.ca/MediaGroup published times yearly + thebyAnnual NEWCOM BUSINESS MEDIA INC. eford@canadianunderwriter.ca .caStatistical Issue) by linkd.in/CanadianUnderwriter instouch.com/group/CanadianUnderwriter NEWCOM MEDIAM3B INC. 2S9 InsuranceMediaGroup.com erwriter at thirteen 80 Valleybrook Drive,BUSINESS Toronto, Ontario, erwriter is is located published times yearly (monthly + the Annual Statistical Issue) by NEWCOM BUSINESS MEDIA INC. Vice President 451 Attwell Dr., Toronto, ON M9W 5C4 Published by
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Canadian at thirteen 80 Valleybrook Drive,(monthly Toronto, + Ontario, M3B Statistical 2S9 Canadian Underwriter Underwriter is is located published times yearly the Annual Issue) by linkd.in/CanadianUnderwriter instouch.com/group/CanadianUnderwriter (416) 614-2200 • MEDIA (416) 614-8861 (fax) Phone: 442-5600. NEWCOM BUSINESS Canadian is at thirteen 80 Valleybrook Drive,(monthly Toronto, + Ontario, M3B Statistical 2S9 Published by Underwriter Canadian Underwriter is located published times yearly the Annual Issue) by rved. Printed in Canada. The contents of(416) this publication may INC. not be reproduced or transmitted www.CanadianUnderwriter.ca/MediaGroup rved. Printed in Canada. The contents of this publication may not be reproduced or transmitted ither in part or in full, includingAll photocopying and recording, the written consent the rights reserved. Printed in without Canada. TheINC. contents of thisofpublication may not be reproduced or transmitted Phone: (416) 442-5600. 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Joe Glionna
.ca
12 Auto Service Advocating for consumer choice is a passion for Doug Reevey, outgoing chair of the Automotive Industries Association of Canada. An accountant by trade, Reevey says one does not have to be a “car guy” to lead a repair shop. BY GREG MECKBACH
InsuranceMediaGroup.com Melissa Summerfield Anthony Evangelista Pat Glionna
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4
Canadian Underwriter May 2017
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EDITORIAL
Road to Reform Truth can be stranger than fiction, especially when one looks at the Ontario auto insurance system. On April 11, the provincial government released David Marshall’s review of the system. Marshall is a former chief executive officer of the Workplace Safety and Insurance Board. With disputes over accident benefits (AB) claims taking up court time, a case can be made to have the AB system reviewed by someone with experience presiding over an organization mandated to provide compensation for injured workers. Regardless of who reviews the system, though, what is needed is a 30,000-foot view — one that takes account of the big picture. Marshall makes some interesting recommendations, one of which has proven to be quite controversial. He recommends that the province establish a regulator which, in turn, should establish a “roster of hospital-based independent examination centres” (IECs), which should “provide diagnoses and future treatment plans” that would be binding on both insurers and claimants. In his report, Fair Benefits Fairly Delivered, Marshall makes some astute observations, described by Insurance Bureau of Canada chief executive officer Don Forgeron as “probably the best description we have to date of what
is wrong” with Ontario auto. “The need to have lawyers involved to negotiate settlements in what should be a straightforward, no-fault, accident benefits system signals a failure in the system,” Marshall writes in his report. That statement will probably generate some debate, given that Marshall also says private corporations should continue writing accident benefits. Marshall has a point. Although auto insurance is a private contract, the terms of the contract are standard and are drafted by the government. With the amount of disagreement over what an AB contract is intended to cover, one would think that the province could add clarity for both insurers and insureds. The problems with Ontario auto raise even broader questions, not just about how contract disputes are handled, but also on the province’s current approach to healthcare and transportation safety. For example, why is risk management not the top public policy objective of the auto insurance system? Marshall says that his proposed IEC system would have significant differences from the designated assessment centres (DACs) of days of yore. But in reality, this IEC “is a new kind of DAC,” argues Philippa Samworth, a partner with Dutton Brock LLP, who delivered a presentation in late April as part of BDO
Canada LLP’s Accident Benefits Conference. What Samworth said is a perfect example of how truth is stranger than fiction. “Hospitals did not want to do auto insurance stuff,” she said. “Family doctors don’t want to do auto insurance stuff.” That statement would probably come as no surprise to auto insurance professionals, but to the lay person, such a statement should be truly astounding. With the role that traffic injuries play in fatalities and disabilities, one would think that “auto insurance stuff” would be core to the business of a single-payer healthcare system. Imagine if hospitals or family doctors did not want to do “cancer stuff” or “heart disease stuff” or “arthritis stuff.” In this sort of scenario, the market for shamans would flourish. If the public policy objective is to offload the medical costs of traffic injuries from the public healthcare system, then why not require that auto insurance cover all healthcare costs associated with a traffic injury? Could this be done without making auto premiums unaffordable for all but the wealthy? Not without changing the rate-filing system in such a way as to let insurance companies use auto insurance as a tool for risk management. However, if that was the case, many drivers would be uninsurable.
The problems with Ontario auto raise even broader questions, not just about how contract disputes are handled, but also on the province’s current approach to healthcare and transportation safety. Greg Meckbach Associate Editor Canadian Underwriter greg@canadianunderwriter.ca
May 2017 Canadian Underwriter
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HR AT ECONOMICAL PUTTING PEOPLE FIRST
Q&A with Louise Taylor Green, SVP & Chief Human Resources Officer, Economical Insurance
Why is it more important than ever to attract the right talent? Disruption is abundant across the insurance industry and, as a result, the talent profiles we’re hunting for are changing too. We know bold and innovative work is supported by blending insight and new skills from outside our sector — data scientists, architecture specialists, digital experts — with the deep insurance experience of actuaries, underwriters, and adjusters. For us, fitting in with our culture is as important as skill set: At Economical, we want to attract people who are curious, resultsoriented, optimistic, and open-minded. How has Economical’s approach to HR changed over the last few years? Gone are the days when HR was the “policy police” for the company. We’ve restructured the way we offer services to the business, cultivating engagement and a high-performance culture that helps our teams achieve this company’s ambitious goals. We make it a priority to treat our current employees, retirees, and prospective candidates with the same esteem and care as we do our broker partners and customers. We’re chronic listeners, doing with our staff what we do externally: surveys, pulse-checks, and focus groups. By truly valuing and listening to people and then implementing evidenced-based, meaningful initiatives, we’re helping to create an environment that encourages all our teams to “rethink insurance.” What makes Economical different in regards to its people practices? Our employee value proposition is deeply integrated with our corporate values and goals to unlock new ways of thinking and to empower our people to deliver on our promise. Making a difference in others’ lives is at the heart of what we do in insurance, so it’s important to us to have programs like paid volunteer days, charitable donation matching, and employeedirected community giving programs. We also inspire good health and personal growth by providing wellness programs, personal needs days, and educational funding. One of our
corporate values is “we’re stronger together,” so we have a platform through which staff are recognized for their own contributions while having the opportunity to express their appreciation for their colleagues. I’m proud to report that for the last two years in a row, we’ve enjoyed a posting traffic of over 1,000 recognition e-Cards per month across the company. What advice would you give to brokers on retaining and attracting the right talent for the future of the insurance industry? Today’s labour market is very competitive and it’s increasing in complexity. While financial rewards and basics like benefits and vacation are part of the equation, there is much more to attracting and retaining top talent. Today’s workforce looks for flexibility, constant learning opportunities, and a reasonable balance between work and home. They also really want to see their employer investing in people, technology, the environment, and the communities they serve. With four generations in the workforce, it’s important to remember that not everyone’s needs are the same. How will Economical help brokers get ready for the future from an HR or people lens? As part of my orientation two years ago, I had the privilege of spending time in two broker offices to learn about their business process and how they interact with Economical. I also job-shadowed multiple roles in our claims department to see firsthand how our employees take care of our customers. This is a company where our vision and what we stand for isn’t just a poster on the wall: It’s something we live each and every day, whether in claims, the field, underwriting, operations, sales — you name it. Every team here makes sure that Economical can be counted on to come through with great service and streamlined business processes to support success. We take care of our people so they can take care of our broker partners and customers.
91,254 PEOPLE CAN’T BE WRONG Since we started our post-claims surveys in 2007, thousands of people have taken the time to let us know how impressed they were with the way Economical took care of them. From fires and floods to fender-benders, we’re proud to earn a 93% claims satisfaction rating — one delighted customer at a time.
Get ready for the future, with us. economical.com/stories
property | auto | business Economical Insurance includes the following companies: Economical Mutual Insurance Company, The Missisquoi Insurance Company, Perth Insurance Company, Waterloo Insurance Company, Family Insurance Solutions Inc., Sonnet Insurance Company, Petline Insurance Company. Percentage based on 91,254 Economical claimant survey responses measuring customer satisfaction with claims services from January 2007 to December 2016. ©2017 Economical Insurance. All rights reserved. All Economical intellectual property, including but not limited to Economical® and related trademarks, names and logos are the property of Economical Mutual Insurance Company and/or its subsidiaries and/or affiliates and are registered and/or used in Canada. All other intellectual property is the property of their respective owners.
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Regulation ELECTRONIC PINK SLIPS TO DEBUT IN ONTARIO The Insurance Brokers Association of Ontario (IBAO) has welcomed the provincial government’s budget pledge to give drivers the option of electronic proof of insurance. “This year, drivers will benefit from the option of using electronic proof of insurance,” the ruling Liberals say in their budget document for 2017-2018. The government move “will allow drivers to confirm their proof of insurance through their mobile device, instead of the current paper ‘pink slips’ issued by insurance companies. When using this option, drivers will no longer need to replace a paper copy of their proof of insurance each time they renew their auto insurance policies,” explains the budget document. IBAO “is very excited to be able to work with our insurance company partners to ensure the efficient delivery of electronic documents to consumers through its members,” says Colin Simpson, chief executive officer of IBAO.
OTTAWA TABLES TOUGHER IMPAIRED DRIVING LAWS If federal legislation tabled April 13 is passed into law, Canadian police officers would be able to test any legally stopped driver for alcohol impairment. If Bill C-46 is passed into law, “police officers who have an approved screening device on hand would be able to 10 Canadian Underwriter May 2017
test any driver they lawfully stop, even if the officer does not suspect the driver has alcohol in his or her body,” the federal justice department states on its website. In Bill C-46, Canada’s ruling Liberals are proposing to raise the maximum sentence for impaired driving causing death — currently at 14 years — to life in prison. The bill also proposes letting police use oral fluid screeners on drivers to detect the presence of drugs, if there is “reasonable suspicion” a driver has drugs in his or her body.
Canadian Market DESJARDINS GROUP PRAISED FOR SELLING WFG If Trimont Financial Ltd. acquires Western Financial Group (WFG), Desjardins Group officials will have “more time to focus on further integrating State Farm,” MSA Research Inc. suggests in a report released in April. “The original acquisition of WFG by Desjardins was somewhat odd given the disparity in distribution cultures,” MSA chief executive officer Joel Baker writes in MSA’s Quarterly Outlook Report Q4-2016. “True integration never happened and it caused some headaches for the broker community.” Desjardins Group reported in February that it agreed to sell WFG to Trimont Financial, a subsidiary of the Wawanesa Mutual
Insurance Company. In 2015, Desjardins Group closed its acquisition of the Canadian operations of State Farm. Desjardins had acquired WFG in 2011. The brokerage arm of WFG has 157 office locations and affiliates in British Columbia, Alberta, Saskatchewan, Manitoba and Quebec.
SCM INSURANCE BUYS U.S. CLAIMS ADJUSTER Edmonton-based SCM Insurance Services Inc. has announced it is acquiring St. Louis-based adjusting firm Nixon & Company Inc. SCM Insurance’s units include independent adjusting firm ClaimsPro. In Missouri, Nixon & Company also has offices in Kansas City, Cape Girardeau and Columbia, plus a Chicago office.
A.M. BEST SEEKS INPUT ON CAPITAL ADEQUACY RATIO A.M. Best Company Inc. is requesting comments from market participants on the draft criteria procedure, Understanding Best’s Capital Adequacy Ratio (BCAR) for Canadian Property/Casualty Insurers. That ratio is calculated by dividing a company’s adjusted surplus by its net required capital, after a covariance adjustment, notes New Jersey-based A.M. Best. The BCAR for Canadian p&c insurers depicts the quantitative relationship between a rating unit’s balance sheet strength and its operating risks. BCAR calculations are performed using data from consolidated
exhibits, effectively creating standalone BCARs for subsidiary companies, but consolidated BCARs for parent companies.
Claims TORCHED TRACTOR NOT EXCLUDED BY “CONVERSION” An exclusion in an auto insurance policy for loss or damage caused by “conversion,” by someone in lawful possession of a vehicle does not apply to a truck tractor badly damaged by fire, a Supreme Court of British Columbia judge found in a recent ruling against Insurance Corporation of B.C. (ICBC). CIT Financial Ltd. had leased a tractor to Snap Transport Inc. The tractor was damaged by fire, which cost CIT Financial more than $42,000 to repair. In court documents, ICBC and CIT Financial agreed the fire was deliberately set. A policy purchased by Snap Transport covered CIT Financial for “loss or damage... caused by conversion, theft or concealment of a vehicle by a person in lawful possession of the vehicle under a lease, rental agreement or similar written agreement.” ICBC had argued that conversion includes “substantial intentional damage.” The court found that conversion has different meanings and, therefore, an insurer “should figure out the precise scenarios of loss it wishes to exclude (e.g., theft, deliberate damage, et cetera) and then insert those circumstances
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in the exclusion using plain English readily understandable by an ordinary person.”
CAPE BRETON HARD HIT BY MATTHEW: AON Hurricane Matthew is estimated to have caused $150 million in economic losses in Canada alone and set several records, Impact Forecasting LLC notes in its Hurricane Matthew Event Recap report, released in April. Matthew officially made landfall at October 8, 2016 near McClellanville, South Carolina. In Atlantic Canada, there were heavy rains and “near” hurricane-force winds reported October 10 to 11, states Impact Forecasting, a unit of Aon plc. Burgeo, Newfoundland and Sydney, Nova Scotia got 263 millimetres and 228 millimetres of rain, respectively. Worldwide, economic losses “are estimated to be as high” as US$15 billion, with insured losses estimated at US$4.5 billion, Impact Forecasting reports. Matthew is the first hurricane to make landfall north of Georgia since Hazel in 1954. With Matthew, Sydney was among the worst affected communities, the report notes. Thousands of homes “across Cape Breton Island suffered inundated basements and ground floors,” it adds.
Risk RIMS RELEASES BI SURVEY RESULTS Quantifying business interruption (BI) losses continues to
be a big challenge, reported by six in 10 RIMS members responding to a recent survey, but a well-conceived approach by risk managers can help to clear any hurdles. “By taking control of their data, establishing a team and developing plausible BI figures before losses occur, risk managers can do much to lessen the confusion and frustration common to these claims process,” suggests the RIMS Business Interruption Survey 2017, released during the RIMS 2017 Annual Conference and Exhibition in April. For the purposes of the report, BI includes time element coverage. Developed by members of the RIMS Business Interruption Working Group, findings reflect input from 372 RIMS members who took part in the online poll last fall. A slight majority (58%) of respondents who have been through a claim said “difficulty quantifying loss” was the biggest challenge they faced. In addition, more than twothirds reported feeling their maximum indemnity period is adequate; 39% indicated their existing BI policy provides either insufficient or no coverage for cyber risk, while 10% were unsure whether the policy covered cyber risk; and 35% have 12 months as the length of the maximum indemnity period.
REPORT COMPARES CYBER, PLANT VALUATIONS Global organizations are spending almost four times more budget on property-
related risks than cyber risks, Ponemon Institute reports in a recent paper. The 2017 Cyber Risk Transfer Comparison Global Report, sponsored by Aon plc, also found organizations now believe that their cyber assets are more valuable than plant, property and equipment assets, even though they are spending four times more budget on insurance protecting the latter risks. The global survey was based on a consolidated sampling frame composed of 60,220 individuals in North America, Europe, the Middle East, Africa, Asia Pacific and Latin America. The final sample was 2,168 surveys. “What’s interesting is that the majority of companies cover plant, property and equipment losses, insuring an average of 59% and self-insuring 28%,” says Ponemon Institute chair Larry Ponemon. “Cyber is almost the opposite, as companies are insuring an average of 15% and self-insuring 59%,” Ponemon adds.
Reinsurance $1.7 BILLION IN NON-LIFE CAT BONDS ISSUED IN Q1 Non-life insurance-linked securities capital grew again in 2017 Q1, continuing the trend from last year, states a recently released report from Willis Towers Watson. The first quarter of 2017 ending March 31 saw US$1.7 billion of non-life Cat bond capacity issued through five transactions.
The record first quarter of 2016 saw US$2 billion issued through nine deals.
U.S. NFIP “UNSUSTAINABLE,” COALITION CHARGES SmartSafer, a coalition in the United States, reports in a memorandum that the U.S. government should ensure that private insurers have access to the flood insurance market, giving consumers access to better rates and higher coverage limits. The National Flood Insurance Program is “completely unsustainable — which is evident by the program’s almost US$25 billion debt to U.S. taxpayers,” SmartSafer argues. The memorandum was issued in advance of hearings before a U.S. Senate committee. “NFIP fails to adequately deter new development in areas vulnerable to flooding,” SmartSafer contends, recommending an update in mapping methods.
“MAJOR PLAYERS” STAYED OUT OF CAT BOND MARKET Sponsors completed one catastrophe bond with coverage for Canada in 2017 Q1 (Galilei Re), notes Property Claim Services’ (PCS) firstquarter Cat bond report. Capital raised by Cat bonds that included cover for Canada fell only slightly yearover-year from $600 million in the first quarter of 2017, PCS reports. “Some major players didn’t return to the market, and others moved their issuance activity up to the first quarter from the second.” May 2017 Canadian Underwriter
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PROFILE
Customer-Centred Greg Meckbach Associate Editor
Doug Reevey, outgoing chair of the Automotive Industries Association of Canada and owner of a repair facility wants consumers to have a choice of where to send their telematics data. Doug Reevey has been in the auto repair business for nearly 20 years, but his background is somewhat different from many of his industry peers. “I am a bit of an anomaly in the automotive parts and service business,” says Reevey, outgoing chair of the Automotive Industries Association of Canada (AIA Canada). Among other things, AIA Canada is making an effort to give consumers a choice of where maintenance data from their vehicles is sent 12 Canadian Underwriter May 2017
and researching the skills shortage. “The consolidation in the collision shop business is really being driven by insurance companies,” observes Reevey. “The insurance companies want to ensure that their customer has the best experience and they are willing to do business with those companies that invest in training for their staff and equipment for their business.” A chartered professional accountant, Reevey used to work for a Big 4 accounting firm. He is now owner and president of Saint John, New Brunswick-based Autotec Inc., a member of the Autopro network that operates an auto repair facility and a wholesale and retail parts counter. About half of Autotec’s business is on auto parts and service and the other half is on industrial sales of components, starters, alternators and batteries, among other things. His customers include transit commissions and Canadian Forces Base Gagetown, near Fredericton. “A shop owner, in the past, anyway, typically was a licensed technician and ends up going out on their own and either buying a shop
or starting a shop on their own and they try to figure out how to run a business,” says Reevey. “They know how to change water pumps and oil, alternators and starters. I come at it from the exact opposite. I understand the
“I have a passion for the business in terms of making sure that we, as a business, meet our customers’ needs and you don’t need to be a car guy to enjoy that aspect of it.” business end of it, but I couldn’t change an alternator or a starter or a water pump on my truck at all.” AIA Canada represents firms in the automotive aftermarket, including manufacturers, re-builders, distributors and machine shops. Around 2009, Reevey notes, AIA Canada formed an audit and finance committee, which he was asked to join. He also served three years as an AIA Canada director-
at-large, and held various executive positions. Reevey’s term as chair ends May 16, the date of AIA Canada’s annual general meeting. He will then remain on the Board of Directors as past chair for a year. Born and raised in Rothesay, just outside of Saint John, Reevey studied business at Dalhousie University, graduating in 1993 with a business commerce degree. Although his father was in the auto business, it was “absolutely not” his ambition, at an early age, to run a repair facility, Reevey relays. Instead, after finishing school, Reevey worked for five years at Ernst & Young LLP. “I knew that wasn’t where I wanted to spend the majority of my career,” he notes. But “it was a wonderful grounding, fabulous place to get first-hand exposure to businesses, how they made money, why they lost money, understanding how to read financial statements. It was a great grounding for business in general.” In the mid-1990s, Reevey’s father owned a chain of 12 jobber stores in New Brunswick, Nova Scotia and Prince Edward Island.
Photo: Peter Tym
PROFILE
“When he sold the business, there was one location that had a repair facility attached to it that they didn’t want to purchase,” Reevey recounts. “So he kept it and turned around to me and said, ‘I don’t want this anymore. If you want it, here’s the price. You can finance it through the company and here you go,’” he says.
AIA Canada’s activities include research, government relations and liaising with other industry groups. One key issue is the data on maintenance issues gleaned from telematics in late-model vehicles. “What typically happens in newer vehicles is, it will alert you to, say, ‘you’ve got maintenance issues coming
up,’” Reevey points out. “If it’s a Ford, that data will flow to the nearest Ford dealership and they will order the parts and schedule the appointment,” he reports. AIA Canada is advocating to “give the consumer the choice of whether they want to send that information and that data to their local dealership or do they want to send that to their local shop if it’s outside of the dealership model,” Reevey says. Original equipment manufacturers (OEMs) “are trying to filter and trying to push as much business back to the dealerships as possible and we are trying to ensure that the consumer, number one, understands this, and number two, has the choice on where the data from their car goes,” he says. “Does it go back to the dealership? Or can it go back to someone like me in the aftermarket where you choose to get your car serviced and maintained?” AIA Canada is “not suggesting” OEM dealers “don’t do good work or that they are not priced competitively,” Reevey says. “All we are asking, as an industry, is give the consumer a choice on where that data goes.”
AIA Canada is also undertaking a labour market analysis of the auto aftermarket industry, he reports. “We believe that there is a fairly significant skills shortage that is going to affect our industry and so we have undertaken a massive study... to try and gauge exactly where we stand in terms of labour resources,” Reevey notes. There is a shortage not only of technicians, but of “all positions throughout the Canadian aftermarket,” he says. “AIA is trying to engage the young folks coming out of high school and university through student career days,” Reevey reports. “Whether it is someone turning a wrench or someone in finance or in marketing, or whether it’s somebody in human relations — the aftermarket is a viable place to make a wonderful living.” This is something Reevey can attest to as he enters his third decade in the industry. “I have very little interest in cars, believe it or not, but I have a passion for the business in terms of making sure that we, as a business, meet our customers’ needs and you don’t need to be a car guy to enjoy that aspect of it.” May 2017 Canadian Underwriter
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Suit Mix
Ari Krajden Partner, Zarek Taylor Grossman Hanrahan LLP
Nicholas Carmichael Associate, Zarek Taylor Grossman Hanrahan LLP
The availability of insurance covering cost awards against losing plaintiffs, and a Supreme Court of Canada ruling over an accused’s right to be tried within reasonable time, are among the factors that insurers need to consider when facing personal injury claims. Several recent trends in personal injury litigation could potentially shake up the industry. Among them are the availability of insurance covering opposing parties’ legal costs, a tendency for more personal injury lawsuits to be filed well before the expiry of the limitation period and a tendency for insurers to go to trial rather than settle in cases where they believe a claim for pain and suffering will not meet the verbal threshold or exceed the statutory deductible specified in Ontario auto insurance law. These are among the reasons it is safe to bet
that 2017-2018 will see an increase in the number of personal injury lawsuits that go to trial. Gone may be the era where 96% to 99% of personal injury lawsuits are settled outside of the courtroom. CLAIMS ISSUED EARLIER Historically, claims in Ontario were being issued one to two days before the expiration of the two-year limitation period. This 11th-hour brinkmanship created uncertainty for insurers because they were in the dark as to whether a claim would be issued at all. During this waiting period, the insurer was hamstrung, unable to take proactive steps to ready their defence. While some insurers did pursue productions or arrange for witnesses to be interviewed, these steps were limited at times by the extent to which plaintiff’s counsel was willing to co-operate. There is another problem with claims being issued shortly before the expiration of a limitation period. Unlike a fine wine, claims generally get worse over time, not better. In recent years, there has been an uptick of claims being issued six months to one year after the loss and being pushed through the system as quickly as possible. The consensus of plaintiff-side lawyers consulted for this article is that increasing competition amongst personal injury May 2017 Canadian Underwriter
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law firms is the major driver of this change. Issuing a statement of claim at an earlier stage is a practical way to clinch a retainer agreement with a prospective client before he or she walks down the street to the next shop. What about the consequences for insurers? At first blush, this seems like a good thing for insurers because it leads to increased certainty and potentially earlier trial dates. The R. v. Jordan ruling issued by the Supreme Court of Canada has thrown a wrench into this potential benefit. The Jordan decision, released July 8, 2016, established a new time limit in which courts must try people accused of criminal charges. That ceiling is 18 months in some cases. Additional court resources allocated to criminal cases will lead to less resources for civil cases. A closer look at the recent tendency to file personal injury lawsuits earlier reveals significant drawbacks. The effect of issuing earlier claims may be to substitute one type of uncertainty for a more troubling kind. And the benefits may not be worth it.
WINDOW OF TREATMENT The critical drawback is that parties are going to discovery and litigating claims without enough information to make informed decisions. When a claim is issued only six months after an automobile accident and the discovery may be taking place 12 months after the accident, the available information will unlikely reflect an accurate assessment of the claim. There will have been a very small window of medical treatment, short-term and long-term disability benefits are likely still being paid, and the plaintiff may not have returned to work or school yet. These issues will be more pronounced where the injuries are more serious (such as broken bones compared to soft-tissue injuries). An individual with a serious orthopaedic injury or brain injury will not have reached maximum medical recovery. Their care needs and burn rate for treatment may not be representative of 16 Canadian Underwriter May 2017
what they will be in the future. Because so much is unknown, it can be challenging for the insurer to accurately assess the claim. Earlier claims may also give plaintiff’s counsel leverage. A premature claim may create the illusion that his or her client’s injuries and impairments are more significant than they are in reality. This is because documentary and oral discovery takes place during the acute phase of recovery — when the consequences of injuries are usually at their most severe. The discovery transcript is held up as gospel by plaintiff’s counsel when it is actually old news. This ties into an artificial sense of permanence: just because a plaintiff cannot work the assembly line today does not mean this will be the same a year from now.
When a claim is issued only six months after an automobile accident and the discovery may be taking place 12 months after the accident, the available information will unlikely reflect an accurate assessment of the claim. Although the main reason for early claims is a marketing response to steep competition, astute plaintiffs’ counsel have likely figured out there is strategic advantage to be had. Insurers need to be alive to this pitfall and, along with their defence counsel, ensure that they do not go to an examination for discovery or conduct a defence medical examination without adequate documentation regarding the plaintiff’s medical history, employment history, injuries and treatment. Where a trial may be scheduled to take place much sooner than used to in some jurisdictions (again subject to changes expected to be seen on account of Jordan), the “wait-and-see approach” of yesterday can be problematic.
COST PROTECTION INSURANCE Since 2011, a new insurance product has crept into the Ontario market: adverse costs protection insurance or “after-the-event” insurance. This product eliminates the stark possibility that a plaintiff will be personally liable for adverse cost consequences if he or she loses at trial. This product may embolden a plaintiff to take his or her claim “all the way” without fear of losing their home or any other assets they may have. This type of coverage is becoming increasingly more common — so common, in fact, that a philosophy gaining traction in legal circles is that lawyers have a duty to advise their clients of the availability of this coverage. It is becoming the standard of care. Some personal injury firms are purchasing coverage for all of their files and reducing their cost per file by doing so. On the surface, this does not look good for insurers. It takes leverage away from the insurer because the threat of an adverse costs award will no longer force a plaintiff to walk away from a non-meritorious case. Plaintiffs’ counsel will no longer be out-of-pocket for their costly disbursements if they lose. Both the plaintiff and his or her counsel may choose to “roll the dice” rather than taking a critical look at their own case and their chances of success.
BLOOD FROM A STONE On the other hand, if an adverse cost award is made against a losing plaintiff at the conclusion of trial — the costs an insurer is owed would actually be paid. When articulating the potential impact of an adverse costs award at a mediation to a plaintiff, the response from plaintiff’s counsel had typically been something along the lines of “my client is judgment-proof” or “you can’t get blood from a stone”. Rather than banking on the plaintiff having personal assets to go after, the costs award is guaranteed to be paid by another insurer. Insurers will have even more incentive to go to trial because they can recover their costs. Trials are becoming less risky for plaintiffs, and less of a financial wash for the insurance company.
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An unintended consequence is that a thin line exists between an emboldened plaintiff and a disillusioned one. Rather than simply providing a security blanket for litigants with legitimate claims, plaintiffs of the more irrational stripe may reject fair and reasonable settlement offers to “have their day in court”. The scope for irrational decisionmaking jeopardizes settlement. Whereas in the past, adverse cost consequences were a natural mechanism that guarded against overly zealous litigants rushing the docket, the proliferation of “after-theevent” insurance risks is dismantling a vital check built into the system. Although considerably more appealing than a “bet-the-farm” scenario, the cost of “after-the-event” premiums is not exactly a steal for an impecunious plaintiff. These products tend to cover a onetime payment, to be waived if unsuccessful at trial. Coverage is generally available with limits of $15,000 to $300,000. Supplemental coverage can be purchased as risk exposure evolves. Many lawyers are offering to pay the premium as a marketing strategy to lock down a retainer with a prospective client. In a 2015 decision of Ontario’s Superior Court of Justice, Markovic v. Richards, it was held that “after-the-event” premiums are not reimbursable by defendants as a compensable disbursement. Such an outcome would be unfair and unreasonable because although these policies provide comfort to a plaintiff, they are entirely optional and do nothing to advance the litigation. Furthermore, the premiums are only payable if the plaintiff loses. The court also cautioned against the possibility that this insurance may act as a disincentive against well-reasoned settlement of claims. This reasoning was followed in the Valentine v. Rodriguez-Elizalde decision, released in 2016, by Ontario’s Superior Court of Justice.
NON-THRESHOLD DECISIONS Recent years have seen a steady increase in personal injury trials in Ontario. The system is ill-equipped to deal with this phenomenon. To illustrate this institu18 Canadian Underwriter May 2017
tional failure, scheduling a 10-day trial in Toronto can involve waiting more than two years. Undoubtedly, “after-theevent” insurance has been a factor explaining why trial dockets are bursting at the seams. A more recent factor is certainly the Supreme Court of Canada ruling in R. v. Jordan. Barrett Richard Jordan and Kristina Lorna-Marie Gaudet argued that their right to be “tried within a reasonable time,” was violated. The Supreme Court of British Columbia ruled against Jordan. That ruling was upheld in 2014 by B.C.’s Court of Appeal but overturned by the Supreme Court of Canada, in a decision released July 8, 2016.
Rather than banking on the plaintiff having personal assets to go after, the costs award is guaranteed to be paid by another insurer. In Jordan, the Supreme Court of Canada established a “ ceiling beyond which delay is presumptively unreasonable,” meaning that the Crown would have to convince a court that there are “exceptional circumstances.” That ceiling is 18 months for cases going to trial in the provincial court and 30 months for cases going to trial in the superior court. To rebut the presumption that the delay is unreasonable, “the Crown must establish the presence of exceptional circumstances,” the high court ruled. “If it cannot, the delay is unreasonable and a stay will follow.”
RELUCTANCE TO SETTLE Naturally, as resources are moved around to accommodate for this ceiling, there will be fewer judges and courtrooms to accommodate civil cases. But working in tandem with this trend, is that insurance companies are increasingly taking tougher positions and not looking to resolve disputes on an economic basis. This is leading to more cases proceeding to trial or at least to the doorstep of trial. A principled philosophy has taken
over the cultures of many insurance companies. Many are taking defensible positions on claims where their assessment is that the claim for non-pecuniary general damages will not meet the verbal threshold and/or non-pecuniary general damages will not exceed the statutory deductible. This threshold refers to a provision in Ontario insurance law limiting the liability of the owner of an automobile, the occupants of an automobile and any person present at the incident. Those parties are not liable for non-pecuniary losses unless the claimant either has a “permanent serious disfigurement” or a “permanent serious impairment of an important physical, mental or psychological function.” At present, the verbal threshold in Ontario is $37,385.117. For many insurers, the days of nuisance-value settlements for $10,000 are over. Taking non-threshold positions and offering $0 forces plaintiffs’ counsel to make a decision: abandon the client (by bringing a motion to get off the record) or run a trial. It seems that more plaintiff lawyers that had not run trials in the past (or at least were not known for running very many trials), are now doing just that. Plaintiffs’ counsel can no longer afford to have a reputation for being afraid of the courtroom in this hypercompetitive climate. Building a breadand-butter practice on settlements is no longer as economically viable. Plaintiffs with access to “after-the-event” insurance may abandon their lawyers first if he or she gets cold feet, and tries to persuade them to drop their lawsuit. It is far too early to say if the net effect of these changes are good for insurers or not. But there is certainly an impact that is being felt across the industry. There may be reverberations for years to come until the market for “after-theevent” insurance is saturated, and nonthreshold claims are rooted out. However, one thing is certain: even the most cautious investor would be wise to go long on the courtroom, and put their money on trials in 2018 and beyond.
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Equipment Breakdown Insurance
Finding the right fit
Monoline or combined? A broker’s guide to helping clients make their EBI choice. Monoline and Combined Policies Businesses thrive by delivering the products and services their customers need, in a timely manner. A breakdown of vital equipment or machinery that keeps production moving can cause an interruption to this flow. Whether your client is a small businessowner and their cash register breaks down, or they own a complex manufacturing plant and their power transformer fails, the breakdown of any equipment can affect their revenue stream. RSA Canada offer a breadth of product lines to combat the negative financial and reputational ramifications of work stoppage, including Equipment Breakdown Insurance (EBI), which provides protection against the physical and financial loss resulting from equipment breakdown.
electrical breakdown. This is why there is a vital need for specific Equipment Breakdown Insurance.
Types of Policies: Monoline vs. Combined As a Canadian leader in Equipment Breakdown Insurance, RSA offers the choice of either a monoline policy or a combined policy product to its broker partners. A monoline EBI policy is purchased separately from a property insurance policy, whereas a combined policy option means that equipment breakdown coverage is imbedded into the existing policy under one set of conditions, definitions and exclusions. Both policies have features that can be beneficial to clients, but clients must also be aware of some of the pitfalls to avoid.
Benefits and Pitfalls of the EBI Monoline Policy
Many clients think that they only need EBI if they have a boiler or pressure vessel equipment, or because they need to satisfy in-service jurisdictional inspections of their boilers and pressure vessels. While both of these are valid, in actual fact the EBI exposure is actually much greater than anticipated.
Selecting a policy option that works best for your client’s unique needs boils down to understanding the benefits and potential limitations of each type. There is no clear winner for which type of policy is better, however in an industry such as power generation, where 70-80% of the losses are EBI losses, the monoline policy is the ideal policy because it offers tailored comprehensive coverage for this complex business segment.
Equipment coverage protects against accidents that happen within the equipment, not ones that happen by an external event. This means that while basic property policies cover damage or loss to a building and its contents caused by external accidents such as fires or vandalism, but exclusions with the property policy could eliminate coverage of the equipment breakdown, such as a mechanical breakdown or
One of the specific benefits of RSA’s monoline EBI products is that they are coupled to our EBI Team; dedicated specialized Underwriters, dedicated specialized Claim Handlers, dedicated specialized EBI Risk Control Engineers; their sole focus is EBI. Dedicated EBI Underwriters have the skills and knowledge to collaborate with our broker partners to craft tailored comprehensive coverage. Our
Why do you need Equipment Breakdown Insurance?
dedicated EBI Claims Handlers only work on EBI claims and our dedicated Risk Control Engineers have industry-specific knowledge to tailor loss prevention recommendations for your clients, to assist in avoiding revenue stream interruption, and minimize downtime during equipment breakdowns.
combined policy. For example, faulty workmanship is normally an exclusion found in a property policy however is not an exclusion in a monoline EBI policy. If your client chooses to go with a combined placement, review the wording with them to eliminate unintended consequences based on their individual needs. .
All provinces in Canada require in-service inspections Making the Suitable Choice for Clients of boilers & pressure objects in ensure they are safe for operation. The provinces of Ontario and Quebec Equipment breakdown coverage is more than allow that these required in-service inspections just protecting against bursting boilers. Accidental are carried out by the EBI insurance carrier. These equipment breakdown can shut down a company’s mandated inspections is a value-added service operations, big or small, resulting in lost income and included automatically included in a RSA reputational repercussions. monoline policy; with combined policies, “Accidental equipment Equipment will continue specific arrangements may have to be to advance, people and breakdown can shut businesses will become arranged for these mandated inspections. increasingly more reliant down a company’s One pitfall of a monoline placement is the on technology, yet what is potential for joint and disputed losses between needed from an EBI carrier operations, big or the monoline property and the monoline EBI stays the same, a company policy. To avoid unforeseen consequences, RSA small, resulting that is knowledgeable, always recommends that brokers ensure that adaptable, and that in lost income both the property carrier (panel of insurers) understands the needs and EBI carrier are signatory to the Insurance and reputational of the client. In addition Bureau of Canada (IBC) Agreement Respecting brokers need to ensure repercussions.” Disputed Losses Between Property Insurance that both property and EBI and Boiler and Machinery Insurance Policies. policies receive the requisite RSA further recommends that there is alignment engineering support to meet the risk control needs of with the policy structure & terms; such as deductible the insured and most importantly mitigate losses. and coverages. At RSA, we rely on the knowledge and expertise of Benefits and Pitfalls of the Combined Property/ our underwriters to ensure exposures are adequately EBI Policy addressed. Both monoline and combined policies are viable options, as long as proper coverages are put For clients looking for one-stop shopping, a combined in place to protect the physical property and revenue EBI and Property policy is an option. A combined policy stream of the insured. has the ability to eliminate gaps in coverage, and also assists in eliminating the risk of joint and disputed loss Tim Skelton is the National EBI that clients may face with monoline placements. Underwriting Director at RSA Canada. He may be reached at With a combined policy all terms and conditions of tim.skelton@rsagroup.ca. More the policy apply both to Property and EBI coverages; information on RSA’s Equipment therefore exclusions within the combined policy, Breakdown Insurance can be found which are not found in a monoline EBI policy, will at rsabroker.ca. apply to equipment breakdown coverage within a
Testing
Intrusive
Now that Canada’s highest court has established a major legal barrier for employers wanting to test workers in safety-sensitive positions for drug or alcohol impairment, lawyers suggest that fleet managers would need significant evidence of a workplace problem before bringing in random testing. Greg Meckbach
Associate Editor
Fleet managers looking for ways to reduce the risk of impaired driving should only employ random drug and alcohol testing of operators “as a last resort,” one employment lawyer advises, while another warns that the Supreme Court of Canada has ruled it is an “affront to privacy and dignity rights” if workers are ordered to blow into a straw. “It would be an aggressive move to try and implement random testing when you haven’t actually had any workplace problems” with substance abuse, suggests employment lawyer Shaun Parker, an associate with Osler, Hoskin & Harcourt LLP. Parker was commenting on Canadian case law involving employers implementing random drug and alcohol testing. In a divided decision released in 2013, the Supreme Court of Canada ruled against Irving Pulp & Paper Ltd. In 2006, Irving had brought in random alcohol testing for employees at a Saint John, New Brunswick paper mill. An arbitration board allowed a grievance from Local 30 of the Communications, Energy and Paperworkers Union (CEP). (CEP has since merged with Canadian Auto Workers to form Unifor). Irving Pulp and Paper was initially successful on judicial review, with New Brunswick’s Court of Queen’s Bench setting aside the arbitrator’s decision. The court ruling was initially upheld on appeal, but later overturned by the Supreme Court of Canada.
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The majority of Supreme Court of Canada judges hearing CEP’s appeal agreed with the arbitration board, which “concluded that the employer had not demonstrated the requisite problems with dangerousness or increased safety concerns such as workplace alcohol use that would justify universal random testing.” But a more recent ruling is “in contrast” to Communications, Energy and Paperworkers Union of Canada, Local 30 v. Irving Pulp & Paper, Ltd., suggests Norm Keith, a senior partner for Fasken Martineau DuMoulin LLP, whose areas of specialty include employment law. In his ruling released April 3, 2017, Justice Frank Marrocco of Ontario’s Superior Court of Justice ruled in favour of the Toronto Transit Commission (TTC) and against Local 113 of the Amalgamated Transit Union (ATU), which represents drivers and some other TTC employees. ATU Local 113 had asked the court for “an interlocutory injunction restraining implementation” of drug and alcohol testing for TTC employees represented by ATU, Justice Marrocco writes in his ruling.
PUBLIC SAFETY “There is one distinction between Irving and the TTC injunction case and that is the issue in the TTC case is not only worker safety, but also safety of the general public,” notes Keith, who contends that random drug and alcohol testing has a deterrent effect similar to the RIDE programs.
“Everyone knows that if you know the cops are out because it’s party night and you might have to stop, fewer people are going to be stupid enough to go out and get drunk and then go driving,” says Keith. “The point about proactive and random testing is not about seeing how many people you can catch, but is really to deter anyone from doing something illegal or reckless and harmful to others,”he comments. The operations of the Irving mill in Saint John “involve hazardous chemicals and gases, heavy machinery and equipment, high-pressure boilers and steam lines, and high-voltage electric lines,” write Justices Marshall Rothstein and Michael Moldaver of the Supreme Court of Canada. “It is uncontroversial that the mill, in normal operation, is a dangerous environment that presents risks not only to the employees of the mill, but also to the public, to property, and to the environment.” Justices Rothstein and Moldaver make their comments — on behalf of themselves as well as Chief Justice of Canada Beverly McLachlin — in dissenting arguments in the Irving decision. Those three judges would have upheld the ruling by New Brunswick’s Court of Appeal in favour of Irving on the grounds that the provincial arbitration board’s decision was unreasonable.
INVASION OF PRIVACY Nevertheless, the other six judges hearing CEP’s appeal agreed with the arbitration board’s finding that breathalyzer testing “effects a significant inroad” on privacy. “We are talking about blowing into a straw to test for alcohol,” notes Keith, who represented Alliance of Manufacturers and Exporters of Canada as an intervener in the Irving case. Irving, Keith recounts, “just wanted 10% of workers in safety positions to blow into a straw once a year. That was seen as an affront to privacy and dignity rights of the unionized workers which is, with great respect, absurd.” But even when a workplace is dangerous, this “does not automatically give
the employer the right to impose random testing unilaterally,” Justice Rosalie Silberman Abella writes for the majority in Irving. “The dangerousness of the workplace has only justified the testing of particular employees in certain circumstances: where there are reasonable grounds to believe that the employee was impaired while on duty, where the employee was directly involved in a workplace accident or significant incident, or where the employee returns to work after treatment for substance abuse.” The majority in Irving cited case history, including two Supreme Court of Canada rulings. In R. v. Shoker, released in
“The point about proactive and random testing is not about seeing how many people you can catch, but is really to deter anyone from doing something illegal or reckless and harmful to others.” 2006, the court amended the portion of a probation order mandating drug testing for an accused. “The seizure of bodily samples is highly intrusive” and “subject to stringent standards and safeguards to meet constitutional requirements,” Justice Louis Charron writes in Shoker. The majority in Irving also cited a ruling in favour of Brandon Dyment, who was injured in a 1982 vehicle accident and charged with impaired driving. A blood sample taken by an emergency room doctor — for medical use — was handed over to police, who tested the blood for alcohol content. “The use of a person’s body without his consent to obtain information about him, invades an area of personal privacy essential to the maintenance of his human dignity,” Justice Gérard Vincent La Forest wrote in 1988 in R. v. Dyment. Twenty-five years later, the majority
in Irving ruled that the employer “had not demonstrated the requisite problems with dangerousness or increased safety concerns such as workplace alcohol use that would justify universal random testing.” Last year, the TTC announced it would hire a third party to “administer and implement random alcohol and drug testing” for its employees. The TTC’s “fitness for duty policy,” did not provide for random drug and alcohol testing when it originally came into effect in 2010. Until 2016, that policy provided for drug and alcohol testing in cases where there is “reasonable cause,” as part of an investigation into an incident, where an employee is returning to work after either being treated for substance abuse or after violating the fitness for duty policy, or “as a final condition of appointment to a safetysensitive position.”
ONGOING ARBITRATION In 2011, ATU Local 113 filed a grievance, which went to arbitration and, as of late April, is still before arbitration. Last year, the union applied for its injunction. “There is a demonstrated workplace drug and alcohol problem at the TTC which is currently hard to detect and verify,” writes Justice Marrocco in explaining why the union was denied its injunction. “If random testing proceeds, it will increase the likelihood that an employee in a safety-critical position, who is prone to using drugs or alcohol too close in time to coming to work, will either be ultimately detected when the test result is known, or deterred by the prospect of being randomly tested,” he suggests in the decision. Under the TTC policy, a test showing a blood alcohol level of .04% or higher is classified as positive, as does a “positive oral fluid drug test,” Justice Marrocco explains. The cut-off levels, for an oral fluid drug test under the TTC policy, are as follows: 10 ng/mL (nanograms per millilitre) for marijuana; 50 ng/mL for cocaine, opiates and amphetamines; 4 ng/ May 2017 Canadian Underwriter
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mL for acetylmorphine; and 10 ng/mL for phencyclidine. “Unlike urinalysis, oral fluid testing does not pose the privacy issue of having to directly observe specimen collection to prevent adulteration of the sample,” Justice Marrocco notes, adding TTC’s testing method is “minimally invasive.” Such a ruling against a union “is fairly common of these kinds of cases in that typically in a unionized workplace, the union files a grievance and the parties proceed to an arbitration on the policy itself (that is) whether the employer is entitled to implement random drug and alcohol testing,” reports employment lawyer Brian Thiessen, a partner with Osler, Hoskin & Harcourt. Thiessen adds an injunction such as the one ATU Local 113 asked for “is a really extraordinary remedy of the court.” A union in such a case is “basically asking the court,” before establishing its main action,” to order the employer “not to engage in any drug and alcohol
testing while the arbitration is proceeding,” Thiessen explains. To be successful in such a case, “the union would have to show there is a serious issue to be tried, that... the union seeking the interim relief will incur irreparable harm if the relief is not granted.”
BIG PICTURE The TTC’s workplace, Justice Marrocco writes, “is literally the City of Toronto and, as a result, all the people who move about in the City... have an interest in the TTC safely taking its passengers from one place to another.” That distinguishes it from the Irving ruling, suggests Keith, co-author of Alcohol and Drugs in the Canadian Workplace: An Employer’s Guide to the Law, Prevention and Management of Substance Abuse. “The issue in the TTC case is not only worker safety, but also safety of the general public,” says Keith, suggesting that if Justice Marrocco’s ruling from April, 2017 is to be “reconciled” with Irving,
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“the troubling part is that it seems as if public safety is given a higher value, legally, than worker safety.” But this may not be the end of the matter, Thiessen suggests. “If you are looking at the big picture the TTC won the battle,” he says. “They may not win the ultimate war on the arbitration. They still are going to have to get over Irving from the Supreme Court of Canada.” Justice Marrocco found that if ATU is, ultimately, successful in grieving the transit commission’s drug and alcohol testing policy, this would constitute a privacy violation for which union members can be compensated. Still, employers wanting to implement drug and/or alcohol testing of drivers should “start with baby steps,” advises Parker. “You can start off by having, say, reasonable suspicion or post-incident testing of employees. You want to show that you have exhausted all reasonable alternative before you go down that route.”
At the Insurance Institute we offer brokers many different ways to increase their knowledge and skills, such as: CIP program Gain essential skills and knowledge required to serve your clients better. And if you already have your CAIB, you can apply it towards earning your CIP. new! CE OnDemand Try our new online courses and learn about the industry’s hot new topics while meeting the CE requirements of your license.
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Insurance Institute
Diminishing Diesel
Peter Hatges
Managing Director, KPMG Corporate Finance Inc. and National Sector Leader, KPMG in Canada
The future of the diesel engine is up in the air due to concerns over nitrogen oxide emissions, the touting of fuel cells and the availability of liquefied natural gas. As the auto industry continues to innovate drivetrains, various questions arise regarding the future of both diesel and gasoline engines. While electric and hybrid cars are the current alternative to these fossil fuels, even battery-powered cars may have a questionable future. In a recent survey of automotive executives, some respondents expressed reservations around the application of battery technology. Limitations on battery charging infrastructure, the improvement of the combustion engine and the application of turbocharging have prolonged the life of the combustion engine. More than three in four respondents in KPMG’s 2017 Global Automotive Executive survey reported they believe fuel cell electric vehicles will be the golden bullet of electric mobility.
Fuel cells, or FCEVs, are expected to solve the problem of recharging and infrastructure. Fuel cells are recharged quickly at a traditional gas station-type facility, making recharging times of 25 to 45 minutes for batteries unreasonable. However, the technology is still in its infancy.
ELECTROVAN Fuel cell vehicle technology is not new. In 1966, General Motors launched the first fuel cell vehicle, the Electrovan, which generated electricity that powered the battery and motor with a combination of hydrogen and oxygen. The vehicle was able to travel about 240 kilometres before it needed to be refuelled because it contained two large tanks — one for hydrogen and the other for oxygen — in the back. Fast-forward to today where engineers are able to fit batteries, fuel cell stacks and hydrogen storage inside the smallest vehicles because of advancements in technology. Original equipment manufacturers (OEMs) such as Honda, General Motors and Daimler have fleets of fuel cell-powered cars today, some of which are used as testers for consumers. Authorities in the United States are trying to promote fuel cell cars in the marketplace in large cities such as Los Angeles and New York City, while they roll out
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The alternative for heavy trucks is liquefied natural gas (LNG) and several major trucking companies are testing LNG-equipped trucks and considering the switch. fuel cell cars and hydrogen fuelling stations concurrently. However, it is predicted there will be a limit to the sale of fuel cell vehicles — despite their lower costs — until more fuelling stations are created. As alternative engine technology gains momentum and attracts research dollars, the future of the diesel engine is in question. The rising price of diesel fuel has lessened the overall benefits of the diesel engine. More popular in Europe than in North America, the diesel engine has been plagued by rising fuel costs and the impact of the Volkswagen (VW) emissions scandal. Tougher emissions standards and testing methods will increase costs to the point where diesel may be forced out of the market. Given the development costs to maintain engine competitiveness and ensure customer loyalty, few OEMs can afford to invest in a technology that has a dubious future. It is not just the added costs; consumers now cast a questioning eye at diesel technology, worried that resale values will plummet and that they may not be able to resell diesel-powered cars.
ber of health issues such as decreased lung function and respiratory illnesses like asthma, bronchitis and pneumonia. However, in 2019, vehicle approvals will be based on emissions performance during real driving, which will force manufacturers to install costlier emissions treatment systems. In the meantime, the sales of diesel engines continues to fall. In fact, with electric and hybrid car batteries becoming cheaper and more powerful, many
POLLUTION Despite the VW diesel emissions testing scandal, sales of diesel engines had already been on the decline because they are expensive and the added cost often outweighed the potential savings on fuel. Furthermore, the VW issues also drew attention to the main problem areas for diesel engines, which are nitrogen oxide emissions and the inconsistency between emissions recorded on the road and in regulatory tests. Diesel cars are commonly found to emit five times more nitrogen oxide than the legal limits in some areas. This has contributed to environmental issues like smog and acid rain, along with a num26 Canadian Underwriter May 2017
industry experts are now predicting that manufacturers may stop producing diesel engines after 2025 because electric batteries will become much more affordable. This is causing manufacturers to withdraw from the diesel engine, making economies of scale, technological advancement and practical applications in various models difficult, if not impossible to maintain. As a result, AlixPartners predicts that diesel car sales are expected to drop to 9% of the European market in 2030 from 52% today. It would be premature to count diesel out. It is the drivetrain of choice in many trucks given that diesel engines
are more efficient than gasoline engines, and based on the number of kilometres driven in commercial trucks, this becomes a critical consideration. The alternative for heavy trucks is liquefied natural gas (LNG) and several major trucking companies are testing LNG-equipped trucks and considering the switch. Truck drivers and trucking company owners seem to be divided on the issue. Some believe that making the switch to LNG will decrease fuel bills, while others think that the price will increase steadily as the demand increases. Market analysts have noted that LNG will stay below $40 per barrel for years, and Shell representatives seem convinced that LNG is the fuel of the future. The main argument against LNG as a fuel for large trucks is that there are not many fuelling stations capable of dispensing LNG to vehicles. The fuel has its challenges. South of the border, the American Trucking Association has questioned the current viability of long-haul operations as it does not believe LNG is currently a viable option. Higher maintenance costs, additional driver training and the weight of LNG tanks versus the weight of diesel tanks are a few reasons they argue it is not viable. As the industry moves forward and the infrastructure becomes more common, it is possible that LNG will become nearly as common as diesel as a fuel for local hauling, but will still face challenges for long hauling. Also in the United States, the large manufacturers are expected to make gasoline-powered vehicles with better fuel economy, meaning gas-powered engines could be around a lot longer than some industry watchers may be predicting. More than 40 years after the debut of the GM Electrovan, electric-powered vehicles still face serious competition from those powered by fossil fuels.
The CIP Society Ethics Series
The CIP Society Insurance Institute of Canada
The CIP Society represents more than 17,000 graduates of the Insurance Institute of Canada’s Fellow Chartered Insurance Professional (FCIP) and Chartered Insurance Professional (CIP) Programs.The CIP Society, through articles such as this, is working to bring ethical issues to the forefront and provide learning opportunities that enhance the professional ethics of all insurance professionals.
Reaching Out Suppose a change in regulation affects many of a broker’s clients. How much effort should brokers expend on notifying insureds of potential coverage gaps? Good communicators will reflect on messages they deliver and will concern themselves that they were being understood as intended. Did the message “hit home”? Comedians wonder if their jokes “landed”; teachers concern themselves that “learning is happening” during their lessons.These scenarios are played out every day in the regular course of business. A broker was directed by the provincial regulator to inform his clients about a statutory change that would affect all policies. Clients could select a course of action to amend their policies in light of these changes. Alternatively, they could take no action and, thus, tacitly accept the changes. This process is known as negative option selection. In this case, the broker determined that for the sake of efficiency, he would send each client a
notice by email and another by regular mail. This meant the broker complied with the regulations. But how would he determine his clients understood the important message they had received? The impact of the policy changes might never be known to his clients unless they submit a related claim, and this could create hardship to clients who are not sufficiently advised in advance. Is it ethical to simply do the minimum in these cases, or should the broker go further to ascertain that the message was received and understood? Gerry De Lauro Senior Vice President, Personal Insurance Hub International Customer-centric brokers are always thinking about the impact of coverage changes on their clients in advance of the changes coming into play and consider opportunities to go above and beyond the minimum. Often, the changes that come into play are both complicated and not easily understood or obvious to policyholders. A good broker takes the time to interpret policy changes in a way that is clear to policyholders. In the scenario, if the broker elects to amend coverage to the benefit of the clients, he should employ a proactive communication plan to en-
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sure his clients are properly informed. Proactive communication in its basic form starts with emailing (and/or mailing) a simple explanation of the changes to clients around the time of renewal. A one-page summary is best, with bulleted points explaining why the broker is increasing coverage above and beyond what is required by regulation. The communication should be easy to read and provide clear direction to the client should he or she wish to remove the cover or speak to someone further about its merits. The broker’s customer service team should also proactively engage in conversation with clients about the new cover should a client call in or email about its value or need. This requires that the team be correctly trained on the new changes so team members can speak with confidence. The point is not to shy away from bringing up the changes. The broker could also reach out to a random subset of his or her client base to ensure they received and understood the communication. They could simply call or deploy an email with a few simple questions. This practice tests the original communication and demonstrates to the client that the broker’s intent is to be customer-centric. The feedback from this proactive reach-out could then be played back to the team or be used to tweak the one-page communication. Cari Donaldson Vice President, Customer Insights, Experience and Distribution Saskatchewan Government Insurance (SGI) In this situation, although the broker is fulfilling minimum regulatory requirements by notifying clients of the change in statutory conditions, he is failing to fulfill an advisory role by failing to reevaluate the appropriateness of each client’s coverage in light of the change. Placing the onus on the client to read the communication, interpret it, understand the implications and then contact the broker if he or she decides that additional coverage is needed is, at best, very poor servicing of the policy. The possibility of a client not realizing 28 Canadian Underwriter May 2017
that coverage was changed until time of a denied claim is risky for the broker. Such an incident could be costly to the broker’s reputation both with clients and insurers. It could also be risky for the broker’s errors and omissions insurer because in this type of scenario, it would be very difficult for the broker to demonstrate that a client had even read the notice, let alone
A one-page summary is best, with bulleted points explaining why the broker is increasing coverage above and beyond what is required by regulations. understood and accepted the change. The broker should ensure that all clients either understand the additional risk they are accepting by not amending their respective policies, or that they are fully informed of different coverages and policy options available to them to cover off the additional risk. This would require that the broker discuss the regulatory change with each client in light of each client’s individual circumstances. It may not always be feasible for the broker to discuss the change with each
client prior to the change taking effect. If this is the case, assessing which clients are most likely to be impacted by the change and following up with them in priority order would be a sound approach. The discussion gives the broker an opportunity to demonstrate value to the client by providing information and advice, and potentially to provide additional coverage that better meets needs. In the shorter term, the broker could consider using survey technology or other means to record a client response to the notice, rather than assuming that silence equals acceptance of additional risk. In this case, the broker has not fulfilled the obligation to provide the best possible advice and insurance coverage without ensuring that each client understands the options available that best address his or her situation and risk appetite, the additional cost to maintain the same coverage they had before the change, and the potential risk they face by declining the additional coverage. This obligation is certainly not met by simply sending a notice and assuming that clients who do not respond are comfortable with the change. Marcus Snowden Coverage Counsel Snowden LLP Doing the minimum for efficiency’s sake is not enough to meet the ethical obligation to keep clients reasonably informed. Here, the broker has elected to communicate in two different ways — by email and by regular mail. Neither form of communication guarantees either that the client has received the message or that the client has comprehended the importance of the content. Given the chosen methods of communication, the broker should highlight the importance of reviewing the change, along with the deadline. This should be highlighted in the subject line of the email and also on the outside back flap of the mailed envelope to be as conspicuous to clients as possible. The broker might also consider using social media to the extent that his or her client base is responsive in this arena,
but the content must be carefully managed to ensure privacy is protected. Rather than relying on the default option if no response is received, the best practice should also include a followup campaign by letter and email. In the event that the broker receives a “return to sender” or “undeliverable” response, he or she should make a reasonable effort by telephone or social media to update the address before sending, requesting a reply acknowledging receipt. The message should concisely and clearly warn the client that taking no action by the deadline date may result in a default choice which affects the client’s best interests for coverage. That warning should be highlighted, using one or a combination of underlining bold or italic text. Keeping a running record of the clients who have responded may permit better management of, and efficient follow-up with, those who have not. Overall, the broker should keep in mind that, apart from being efficient about meeting his or her ethical responsibility to clients, the communication presents a business opportunity to be in contact with each client. Depending on the timing for renewal, the communication is for both a legitimate statutory update on the specific coverage in question and more broadly to update the client’s risk management profile. If it is combined with the renewal discussion, the efficiency is realized while conveying a breadth of knowledge to the client. Otherwise, it is an extra opportunity to learn and keep current about each client and stay ahead of the curve when renewals are later discussed.
changes will have an effect on individual policies, alter the nature of the contract, and a client’s expectations at claim time. In this situation, the broker can employ a number of methods to ensure that the communication is received by his clients.When sending the message by email and regular mail, the broker can flag it as urgent, and ask for confirmation of each client having received, read and
understood the nature of the statutory change and the effect it will have on his or her policy. In this way, the broker will ensure that the clients are not surprised further down the road in the event of a claim. The broker can use the change as an opportunity to educate the clients, to demonstrate the broker’s knowledge and expertise, and to position himself or herself as a trusted professional.
If you’re in Manitoba, this is considered an automobile. Surprised? ARC isn’t.
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THE FINAL WORD
Professionals in the industry are bomThe ARC Legal Reporter barded with various messages throughWinter Issue – Article #1 out the day — emails, phone calls and A National Network of Independent Law Firms old-fashioned mail — each one competing for attention. As receivers of When is a medical examination considered a second examination those messages, it is sometimes hard under Rule 36 of the New Brunswick Rules of Court? to discern which one is worth the time The ARC Legal Reporter to acknowledge and read. Knowing this, v. Crowther and Kelly Case: Winter IssueReported – Article #1 Blyth 2009 NBCA 80 Citation: brokers should pay extra attention when When both the plaintiff’s physical and mental condition are in issue in an action, an At Issue: A National Network of Independent Law Firms the plaintiff undergoes a physical examination, will a subsequent application for communicating with clients on impsychiatric examination be considered an application for a second medic examination? portant changes, especially when those When is a medical examination considered a second examination Should medical examinations that are ordered as part of the discovery process b characterized as ‘independent’ medical examinations? under Rule 36 of the New Brunswick Rules of The Court? Court of Appeal of New Brunswick Court: ARC_Fleet ad_1/2 page.indd 1
Reported Case: Citation: At Issue:
Judgment Rendered: Factual Summary:
May 2017 Canadian Underwriter
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October 13, 2009 (Reasons delivered November 2015-02-14 26, 2009) 1:05 PM The plaintiff suffered injuries in a motor vehicle accident and commenced an actio seeking damages. Both the plaintiff’s physical state and mental state were in issue the action. The plaintiff submitted to a physical examination by the defendant’s exper but subsequently refused to submit to a psychiatric examination.
Blyth v. Crowther and Kelly 2009 NBCA 80 When both the plaintiff’s physical and mental condition are in issue in an action, and
COVER STORY
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Turn Signal Technology is driving change in the vehicle manufacturing sector, prompting property and casualty insurers to consider how best to protect an already-pressured auto book. Will partnering with vehicle makers offer an opportunity to share the driver’s seat as highly automated and then autonomous vehicles take hold? Or will changing use patterns and battles over data relegate insurers to thumbing a ride?
BY ANGELA STELMAKOWICH
30 Canadian Underwriter May 2017
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ne would have a tough time envisioning two industries undergoing more change than the auto and insurance sectors. The first is being fuelled by technology developments at break-neck speed; the second is being advanced by explorations of how best to employ existing expertise and information to strengthen (or even just maintain) an auto book whose transformation is advancing quickly. As elsewhere, the evolving uses and possibilities of vehicles is on the minds of many in Canada’s property and casualty industry. Current considerations include the increasing number of sensors that collect valuable data, rising consumer expectations, and players (old and new) jockeying for position to capitalize on whatever first-mover status brings. The expectation is that these developments will only accelerate as technologies further develop and possibilities reveal themselves. With steady improvements in vehicle safety and the availability of fully autonomous vehicles possibly just a couple of decades away, where do p&c insurers stand? One of the industry’s bread-and-butter books — personal auto — will, no doubt, continue to undergo dramatic change. Could vehicle safety diminish premiums? Will the risk that provides the basis for premiums be absorbed, in whole or in part, by other players? Will vehicle makers assume a larger role in car insurance offerings? Insurers can either panic or view the unfolding circumstances as an opportune time to rethink what will be and choose a partner that will make the future dance as successful as possible. Just what individual insurers do is for each to weigh and decide. But one thing seems clear: the status quo is not an option.
May 2017 Canadian Underwriter 31
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PICK A PARTNER The innovation and technology changing today’s vehicle landscape are influencing the traditional property and casualty insurance lens on auto as well. Canadian insurers with at least some interest in auto are having to look at things differently not only because of what is happening today, but because of how things could unfold down the road. It seems likely the developing situation will require new approaches, new considerations and new partnerships to smoothly navigate what could be a bumpy road for the unprepared. Insurers and car manufacturers “have not had the deepest relationships,” notes Tanguy Catlin, a senior partner with McKinsey & Company’s North American p&c insurance practice. Globally, the two have had relationships, Catlin points out, but these have been around improving vehicle safety, certain aspects of distribution (such as a manufacturer offering white-labelled insurance provided by an insurer) and some lobbying-type efforts, usually related to regulatory demands. However, concrete advances in technology, combined with the increasing promise around data, seem to have ramped up the perceived value of partnerships. There are already significant partnerships between insurers and automakers, says Karen Pauli, a principal for Strategy Meets Action (SMA), predicting that more are likely to come. As examples, Pauli points to the following current collaborations: • State Farm and Ford Motor Company — the program launched by the companies in 2012 allows the insurer’s customers with select SYNC-equipped Ford vehicles to reduce auto insurance premiums by using the Vehicle Health Report feature to report mileage; • Tesla and QBE Insurance Group or AXA General Insurance Ltd. — InsureMyTesla is a policy offered by Tesla to owners of its electric cars in Hong Kong and Australia through those insurers; and • BMW i Ventures, Allianz Ventures and Toyota Research Institute — the three are licensing technology from Nauto, 32 Canadian Underwriter May 2017
an autonomous vehicle technology start-up. Pauli’s take is that these sorts of insurer/automaker partnerships are a winwin. “Insurers not only learn about the technology the manufacturers are currently using, but also what they are in the process of developing,” she reports.
“Becoming an insurer is very expensive and very complex, and certainly not a core competency. Most manufacturers will want to avoid that,” says Karen Pauli of Strategy Meets Action. “Their goal is to sell more cars, not negotiate claims settlements.” That heads-up “permits the insurers to anticipate and make adjustments to insurance products and rating earlier than they might normally be able to,” Pauli says. “It also gives the insurers a chance to influence what the manufacturers are doing,” she suggests. Calling it “an ever-evolving issue,” an email from Andrew McGrath, media relations manager for Insurance Bureau of Canada, points out that the insurance “industry is becoming increasingly
information-based, technologically connected and even more globalized.” For now, “car manufacturers are racing to improve safety. Emerging technologies could lead to ‘zero fatality’ roads,” McGrath writes. “We already see highend vehicles that warn if you drive too close, alert you to vehicles in your blind spot and even park themselves. When it comes to driverless cars, insurers will need to assess the risks and determine products and pricing based on those risks.” But talk is expected to broaden — including to more evolved coverage and distribution — as technology advances, more data is collected and real adoption of autonomous vehicles nears. Citing information in KPMG’s Marketplace of Change: Automobile Insurance in the Era of Autonomous Vehicles, as autonomous driving features improve safety and help reduce accidents, incidents per vehicle are expected to drop by 80% by 2040, says Peter Hatges, managing director of KPMG Corporate Finance Inc. and national sector leader, automotive for KPMG in Canada. “There will certainly be a lot of data available and a better understanding of the impact of the safety systems in place will be evidenced by experience,” Hatges suggests. “The insurance industry will be able to collect collision data frequency from their own records and Google is expected to have a significant amount of driving data,” he notes. Last June, IHS Automotive, part of IHS Inc., reported global autonomous vehicle sales were expected to reach almost 21 million by 2035. “Global sales of autonomous vehicles will reach nearly 600,000 units in 2025,” predicted Egil Juliussen, director of research for IHS Automotive. The IHS Automotive analysis takes into account, among other factors, ridesharing and car-sharing programs, increasing investment in autonomy by original equipment manufacturers (OEMs), suppliers and technology companies, research and development centres under way and improved efficiencies. “We believe that intelligent, autonomous shared fleets will be the future of transportation, particularly in our
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urban environments,” suggests Monika Federau, the senior vice president and chief strategy officer for Intact Financial Corporation (IFC). “Shared will revolutionize the concept of the automobile, and remains the most disruptive trend over the long-term as people shift from individual ownership more to multi-modal and into shared services,” Federau continues. The arrival of automated vehicles “on our roads will, no doubt, have an impact on auto insurance pricing, but it’s still too early to go into specifics,” suggests Valérie Lamarre, a spokesperson for Dejardins Insurance. With respect to driverless cars, says McGrath, “it’s important to note that while testing is under way in Canada, a functional and available driverless car is a ways out on the horizon.” Most car makers have started building — or have promised to build — autonomous vehicles. However, “there’s a few very significant pieces of technology that need to be invented,” Andrew Lo, president and chief operating officer of Kanetix Ltd., said during a recent event. Plenty of work remains to be done on artificial intelligence and HD mapping (real-time high-definition mapping for self-driving cars so that they can navigate unusual circumstances), Lo pointed out. Also needed is “ubiquitous vehicle-tovehicle communication.” Autonomous vehicles, he noted, “aren’t going to be possible without a 5G (fifth-generation wireless technology) network, without sensors, without artificial intelligence.” Currently, “some of the driver-assistance technology available (such as back-up cameras, blind-spot detectors, parallel parking assistance and adaptive cruise control) already has an impact on how we calculate insurance risk,” Lamarre says. “As cars become more connected by the automakers, there is an opportunity for insurers to extract valuable data and information from vehicles,” Steve Millstein, president, North America for Intelligent Mechatronic Systems Inc., wrote in an article for Canadian Underwriter last December. “The information gleaned from new
data sources can provide insurers insight beyond just driving behaviour, helping them to better understand who their customers are and offering the possibility of expanding to lifestyle insurance services based on the digital information collected,” Millstein noted.
“In a few years, we expect to see a majority of cars produced come with embedded connectivity and many safety features as standard, which will unlock new consumer experiences and data,” notes information from Intact Financial Corporation. DATA DUEL? Data will be key — not only to drive innovation, but also to open the door to potential new offerings and services and fill any gaps that may be created by vehicles becoming safer and, perhaps, being used less and shared more. Exactly who owns the data remains an open question. Pauli says that vehicle manufacturers have data on models with embedded sensors and insurers
with telematics offerings have that data. “But, the more that telematics evolves to measuring via a smartphone (versus dongle) the more you get the telcos in on information retention,” she suggests. Hatges says the expectation is that established OEMs and technology companies like Google will own the data. A KPMG study on insurance and the auto industry shows “almost 87% of respondents expect Google to control driving data, with over half expecting the company will distribute insurance.” Millstein noted in the magazine article that “access to the data and the desire of the automaker to control the flow may create a new battleground between OEMs and insurers.” His take is that automakers likely “want a mechanism to replace the OEM subscription model — which includes embedded telematics paid for on a monthly basis by vehicle owners — to monetize revenue from these new sources. Monetizing driving and vehicle data gives OEMs a revenue stream that the subscription model never did,” he wrote. “Insurers are realizing that they would want to price the risk on real driving behaviour other than credit scores and based on real usage other than paying for the year,” suggests McKinsey & Company’s Tanguy Catlin. “That information about the driving behaviour and the usage is a lot more easy to collect if the device that is capturing that information is embedded in the car, and the folks who are embedding those devices are the manufacturers,” he adds.
INSURER ENVY? But will love of data woo car makers more deeply into the insurance realm? Do they want to become insurers? “Never say never,” says Pauli, but quickly adds that with the exception of a random manufacturer, “it is not likely to happen. Becoming an insurer is very expensive and very complex, and certainly not a core competency. Most manufacturers will want to avoid that,” she explains. “Their goal is to sell more cars, not negotiate claims settlements.” May 2017 Canadian Underwriter 33
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Hatges is definite: “No, I do not see automakers becoming insurers.” While auto manufacturers have experience in the insurance business, primarily on the warranty side, in general, their competencies are not in the business of managing risk, IFC reports. “There is a reasonable possibility that some auto manufacturers will provide maintenance insurance/programs for autonomous vehicles because software maintenance/upgrades will be highly critical to the proper operation of the vehicle,” Pauli notes. “This could go either way — self-insured or partnership,” she says. “As the market size shrinks,” Hatges suggests, “we anticipate the potential for frenzied competition as firms attempt to maintain premium volume to cover operational expenses.” This additional competition “may put pressure on profitability and would be a deterrent for new entrants into the market,” he maintains.
INSURANCE ADJUSTMENT Whatever the view, insurers need to be prepared for what may come. “You cannot fight the fact that now the data is available to underwrite differently,” says Catlin. “You cannot fight the fact that cars are becoming increasingly safer.” What is not so clear, though, is “who has the upper hand,” Catlin says. “Is it the OEM? Or is it the insurance company?” he asks. “I think, realistically, you quickly come to the conclusion that it is the car manufacturers,” he suggests, pointing out they can generate the data that is valuable both for underwriting the vehicle and creating the next innovation transportation system. When it comes to autonomous vehicles, “we believe insurance will continue to play a less visible, but critical, role in advancing these technologies to market and we look forward to demonstrating some of that expertise and strength,” notes information from IFC. Saying that a closer relationship between auto manufactures and insurers will help underwriting be more effective, “I can envision a council on the 34 Canadian Underwriter May 2017
impacts of autonomous driving to help shape premiums,” Hatges says. “If cars are no longer always driven by the pilots of the car,” Catlin says, “there is a belief that the liability will transfer from a personal liability to a
“As the market size shrinks, we anticipate the potential for frenzied competition as firms attempt to maintain premium volume to cover operational expenses,” KPMG’s Peter Hatges says. This competition “may put pressure on profitability and would be a deterrent for new entrants into the market.” commercial liability and the manufacturers of the cars will carry a big part of that liability.”
MIXED TRAFFIC “The blended world of autonomous and driver-operated vehicles will make for a very complicated environment for insurers, particularly on the claims end,”
Pauli says. “But, clearly, the weight will shift from driver to vehicle capabilities over time. There will always be a need for physical damage coverage,” she adds. “The slice of the automotive pie is expected to shrink and the allocation amongst other lines is expected to change. Commercial lines may take a larger share as the marketplace moves to car-sharing and mobility on-demand,” Hatges points out. “Losses covered by products liability policies will most likely increase due to the fact that sophisticated technology that underpins driverless vehicles will also need to be insured,” he adds. Catlin reports “there is a belief that a significant portion of the risk will evaporate because cars will have fewer accidents and the frequency decline will be significantly larger than the severity increase.” Car manufacturers will probably want to hold on to a big part of the risk, “which means a big part of the premium will disappear for the insurer, certainly the personal lines insurer.” Noting that the insurer, GEICO, spends approximately $1.4 billion on advertising each year, the approach has some insurers asking questions, Catlin suggests. “‘Well, rather than spending all that money on advertising, should I just spend the money to partner with a car manufacturer and embed my insurance product directly in the sale of the car, collect the data, underwrite better and then, after six months or a year, charge the consumer directly?’” he queries. “Then from a distribution standpoint, if you are a car manufacturer and you see insurers spend that much money on advertising, you will want to charge a lot to embed your insurance product in the car at the point of sale,” Catlin points out. “In a few years, we expect to see a majority of cars produced come with embedded connectivity and many safety features as standard, which will unlock new consumer experiences and data,” IFC reports. “The challenge for traditional auto manufacturers, technology companies and insurers will be getting effective access to the data and managing it.”
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COVER STORY
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Insurers “know that they are playing musical chairs,” and only so many partnerships are available, comments McKinsey & Company’s Tanguy Catlin. “When the partnerships are gone and the music stops, if you don’t have those partnerships, you are left without a chair. ”
REGULATORY RESTART? Jeremy Rudin, Superintendent of the federal Office of the Superintendent of Financial Institutions, noted in a speech last fall that “drone aircraft are already available, and autonomous vehicles may not be far behind, creating new areas of liability. In pursuing these new lines of business, we expect insurers to understand the risks and perform the due diligence that new products require.” SMA’s Karen sees a need to rethink regulatory demands around autonomous vehicles given current and expected changes in auto insurance. In the United States, “many of the manufacturers are already talking about the need for a federal set of laws. Along with the ownership of data discussion, regulation is going to be a discussion that will go on for the foreseeable future.” Hatges suggests that over the next 10 years, there may be an emergence of niche underwriters as new providers of insurance. “Regulatory requirements are likely to be shaped in context of the deployment of new technology, such as back-up cameras and front-collision sensors. In time, it is expected that more and more of these 36 Canadian Underwriter May 2017
features will become standard and mandatory equipment,” he says. “In the short term, we know intelligent vehicles are going to play a more critical role in the insurance world with new advanced driver-assistance systems helping to improve safety on our roads,” IFC explains. “We see this playing out in a stepped and modular fashion over the coming decades as there are still significant technical and regulatory hurdles that need to be crossed,” the insurer adds. “We see shared as being an underpinning to the future of full autonomy,” Federau comments. “Insurance products will definitely need to evolve,” Pauli suggests. “Given the potential for uncertain liability in an autonomous vehicle accident (was it the software, the person who performed maintenance, the actual vehicle configuration, operator error?), consumers might value something akin to identity theft coverage,” she expects. “This could be an endorsement that provides coverage for money and time the vehicle owner has to expend to unravel the situation, including legal services,” Pauli explains.
“As the vehicle itself makes more driving decisions, determining who is responsible when an accident occurs will need to be clarified,” Hatges says. “Legal issues will resolve in parallel with advances in automotive technology, likely without hindering market advances.”
REVVING UP Pauli advises that “insurers cannot wait until the vehicles are on the road in significant numbers to get involved in the changing auto market.” Her sense is that “having a telematics program will be important because it provides a pathway and baseline for changing vehicle operation outcomes, as well as data to drive new policy rating structures and product needs.” Insurers “know that they are playing musical chairs,” Catlin says, and there are only so many partnerships available. “When the partnerships are gone and the music stops, if you don’t have those partnerships, you are left without a chair,” he comments. “But at the same time, they are all looking for an angle where they will create economic value for themselves.”
Recommended
Greg Meckbach
Associate Editor
Fixes The Ontario government released April 11 an advisory report with 35 recommendations on how to reform auto insurance. It was well-received by Insurance Bureau of Canada and the province’s brokers association.
Auto insurance claims costs “continue to rise” in Ontario “while automobile accidents continue to fall,” Marshall reports, adding that neither the behaviour of personal injury lawyers nor “excess profits” of insurers are to blame for the situation. “We are very supportive of David Marshall’s position of trying to get people back to their health or fixed as fast as they can and back to their workplace,” reports Colin Simpson, chief executive officer of IBAO.
The Insurance Brokers Association of Ontario (IBAO) is “generally” supportive of a recent report making 35 recommendations to reform the province’s auto insurance system, but one personal injury lawyer cautions that disputed claims will still occur while a lawyer representing insurers predicts that at least one recommendation from the report could be “buried.” David Marshall, former president of the Workplace Safety and Insurance Board (WSIB), was appointed in 2015 to review and make recommendations on Ontario auto insurance. His final report — Fair Benefits Fairly Delivered: A Review of the Auto Insurance System in Ontario — was released April 11.
Ontario’s Statutory Accident Benefits Schedule “never intended the auto insurance system to be a cash jackpot,” writes Marshall. “Many insurance companies, however, are incented not to see their role as providing medical care to clients. Rather, they are incented to close their liability with as little cash cost as possible and, hence, they introduce the practice of negotiating cash settlements with claimants in lieu of medical treatment, future wage and other future benefits under the SABS,” he notes. One of the 35 recommendations that Marshall makes is that insurers “change their role from managing costs to delivering care to their customers.” He contends that insurers “need to change
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their claims management and related practices in the process.” In its budget document for 20172018, released April 27, the Ontario government reports that it is “reviewing” Marshall’s report “and will be hosting consultations in the coming months.” Marshall suggests the solution to the high premiums in Ontario “lies in focusing on timely, appropriate medical care, not cash settlements.” One of his recommendations is for a system of a hospital-based independent examination centres (IECs), which would be different from the designated assessment centres (DACs) that were in place until 2006. An IEC system would not be “concerned in any way with approving or denying a claim,” Marshall reports. In the workers’ compensation systems of both Ontario and Alberta, “the patient is referred to a regional evaluation centre,” he points out.
REBIRTH OF THE DAC? But in reality, Marshall’s proposed IEC “is a new kind of DAC,” contends Philippa Samworth, a partner with Dutton Brock LLP, who gave a presentation April 27 at BDO Canada LLP’s 21st Annual Accident Benefits (AB) Conference. When the DAC system was brought in, Samworth recounted, “we really wanted to have hospitals as part of our DACs.” Instead, she added, “we had maybe three hospitals. Hospitals did not want to do auto insurance stuff. Family doctors don’t want to do auto insurance stuff. Why would a hospital?” Personal injury lawyer Adam Little, a partner with Oatley Vigmond LLP, echoes Samworth’s comments. “There is no reason to think that such a system would work now, whether centred at already over-burdened hospitals or elsewhere,” says Little. “Binding a catastrophically injured claimant’s future to the opinion of a single ‘independent’ examination is simply unfair. The fact that these assessors rely on recurring work from insurers will always offer the appearance of bias in the eyes of the claimant, and for good 38 Canadian Underwriter May 2017
reason. Making these assessments binding, final and beyond dispute is draconian and inequitable,” he comments. Marshall recommends in his report that an evaluation “take place much earlier in the treatment cycle.” IECs, he suggests, should assess auto claims “as precursor to a mediation or arbitration hearing or litigation.” By contrast, DAC assessments were “often long, drawn out and expensive.” They also “frequently acted on behalf of insurers or claimants in providing medical assessments to them separately,” Marshall writes. He notes that with the WSIB, “the injured party does not have to submit to multiple separate examinations.” Still, Samworth is not convinced that an IEC system will work well, she suggested at the BDO (AB) conference, held
Making these assessments binding, final and beyond dispute is draconian and inequitable. at the Liberty Grand conference centre in Toronto. The job of an IEC “is to go and say, ‘We are going to work out a future plan of care and we are going to direct what future treatment plans there should be and P.S., if you don’t like what our decision is, and what we recommend, that’s too bad because it’s binding,” is how Samworth characterizes Marshall’s recommendation. “It’s binding on you and it’s binding on the insured. You can’t go to your family doctor and say, ‘I don’t want to do that.’” Samworth also questioned whether or not the province could afford to provide lifetime care for seriously injured accident victims. “When you have no more of your (catastrophic impairment coverage) money left and when you are seriously injured, there’s going to be a care program that allows you to be covered under (Ontario Health Insurance Plan, OHIP),” Sam-
worth told conference attendees. “I think that alone may allow us to suspect that some aspects of (the Marshall report) may be buried because I don’t think the OHIP system can afford these care programs,” she said. But officials with Intact Financial Corporation seem encouraged by some of Marshall’s recommendations. In its management discussion and analysis (MD&A) released May 2, Intact alluded to Marshall’s recommendation on IECs and his recommendation against cash settlements for AB specified in legislation and medical and rehabilitation benefits. “We are encouraged by these recommendations to streamline the insurance system in Ontario and direct more of the resources intended to support the needs of injury victims, to claimants themselves,” Intact reports. The Marshall report is “probably the best description we have to date of what is wrong” with Ontario auto, contends Don Forgeron, president and chief executive officer of Insurance Bureau of Canada (IBC). Without endorsing or rebutting any of Marshall’s recommendations, Forgeron made his comments April 25 to the report during IBC’s annual Financial Affairs Symposium. Simpson echoes Forgeron’s view. “Within this report you can see that the reforms over the last 30 years only make slight differences and then after a few years, it goes back to not being as effective anymore,” Simpson says. “So we do need significant change on the auto product for sure. So this is definitely heading down the right path.”
MAKING STAKEHOLDERS WEALTHY Marshall “notes that a complex system of insurance benefits, combined with challenging legal processes siphons resources intended to support the need of injury victims,” Forgeron reports. “Paraphrased, the system is not about making people well,” he suggests of the Marshall report. “It’s about making stakeholders wealthy and that’s what’s wrong with the system.”
Marshall recommends that the province amend auto insurance regulations “to include only broad principles and entitlements for benefits.” Ontario should establish an “armslength regulator with a skills-based board” to oversee auto insurance, he maintains. “In many ways, the need to have lawyers involved to negotiate settlements in what should be a straightforward, no-fault, accident benefits system signals a failure in the system,” Marshall contends. “There should not be so much uncertainty that neither accident victims nor insurers are confident as to what constitutes fair benefit.”
CONTINGENCY FEES Marshall also argues that the province “should consider” requiring that “contingency fee arrangements be filed with the regulator.” The province should also consider “restricting contingency fees in personal injury cases,” he suggests. That causes concerns for lawyers like Little. “The concept of an auto insurance regulator being entitled to restrict the nature and terms of lawyer’s retainer agreements (which are protected by lawyer/client privilege) is well beyond the scope of such an authority,” he says. “Retainer agreements are already governed by the Law Society of Upper Canada, the legislature and, ultimately, the courts,” reports Little. “Another layer of regulation is unlikely to increase systemic efficiency.” There was already a movement afoot to cap contingency fees even before the Marshall report was released. Bill 103, tabled March 8 by backbench MP Mike Colle, proposes to cap contingency fees, in bodily injury lawsuits, at 15%. Marshall suggests in his report that some contingency fee arrangements are not transparent. He recommends the province consider mandating that settlement cheques “be made payable jointly to the accident victim and the lawyer.” Marshall further recommends “evidence-based treatment protocols, used extensively in several Canadian jurisdic-
tions, that cover most common injuries.” Intact alluded to this recommendation in its MD&A, but Little disputes the notion that “evidence-based treatment protocols” will serve to avoid disputes. “Such treatment protocols are not tailored to the individual needs of the injured person, which include factors such as severity of the crash, age, body type, prior medical and psychological history, reaction to treatment or even the nature of the person’s employment,” he says. “The idea that a construction worker will always benefit from the same treatment plan as a call centre employee is absurd. From my perspective, the implementation of these cookie-cutter treatment protocols across the board will have the opposite of the desired ef-
Within this report, one can see that the reforms over the last 30 years only make slight differences and then after a few years, it goes back to not being as effective anymore. fect. It will result in more disputes, not less,” Little argues. In his report, Marshall also recommends changes to the tort system, suggesting that the province create “a prescribed list of documents that must be produced,” in personal injury auto lawsuits. The government should also allow for earlier “examination under oath for both claimants and expert witnesses” and provide for “some form of case management,” he writes. “Early examinations under oath are already permitted under Ontario insurance law,” reports insurance defence lawyer Kadey B.J. Schultz, co-managing partner of Schultz Frost LLP. “Early examinations under oath of expert witnesses, in accident benefits disputes, can be incredibly valuable, but can also drive up costs,” Schultz explains.
Marshall recommends that the provincial government consider creating an “Office of the Driver Adviser” or something similar. “Consumer education in the field of auto insurance is a key component of a well-functioning system,” he writes. Such an office would “explain how auto insurance works, how to access benefits efficiently and the rights and obligations of drivers.” This recommendation caught the eye of IBAO. “We are one of the main advocates for the consumer and one of the strongest educators of consumers out there as to what is or is not available by way of product choice,” Simpson notes. “We need to ensure that the broker voice is heard in that process.” Marshall notes he is also concerned about the amount of money spent on lawyers and with the current tort system.
TORT REFORM Among other things, Marshall says that there should be full deductibility of AB awards from tort awards. “The tort system is confrontational, time-consuming, involves the cost of legal counsel and experts, and ties up negotiating time if settled out of court or court time if cases go to trial,” he writes. “Moreover, using the court system to get injured parties what they deserve results in a significant leakage in the benefit they actually receive since the award they get is reduced by the need to pay expert witnesses and large fees to lawyers.” Intact reports in its MD&A that it is “too early to tell” how Marshall’s recommendations would be implemented (if at all), but officials with the insurer are “confident” that the provincial government “understand the serious impact of the current inflationary trends” in auto claims costs. Without specifically endorsing any recommendations in the report, Forgeron contends there are “perverse incentives” built into Ontario auto insurance and “that creates a focus not where it ought to be.” May 2017 Canadian Underwriter
39
Quick Resolution
The Licence Appeal Tribunal has been hearing disputed Ontario accident benefits claims for more than a year. Although disputes seem to be resolved more quickly than they were by the Financial Services Commission of Ontario, it remains to be seen whether or not claimants are getting access to benefits in a more timely manner.
May Gibillini President, InHEALTH Inc.
It has been a year since Ontario’s Licence Appeal Tribunal (LAT) started hearing auto accident benefit (AB) disputes. As of late February, the LAT had received approximately 6,000 applications. As of early May, it had published 105 decisions. Although this may seem disproportionate to the volume of applications, the Financial Services Commission of Ontario (FSCO) took three years from its inception to reach 105 arbitration decisions. The LAT has demonstrated that it is speedier than FSCO and maybe more efficient with the allocation of written decisions. But is it wiser? The LAT started accepting applications April 1, 2016 in the midst of a two-year wind-down plan from FSCO to hear all remaining arbitrations. FSCO remains committed to its plan, with the last of pre-hearing scheduled by end March 2017 and a complete wind-down by end of the year.
LOWER VOLUME The number of applications at the LAT on the whole has been significantly less than expected, when compared to the 26,000 applications received by FSCO in 2015. This has afforded the LAT the opportunity to maintain, for the most part, its regulated timelines. However, there is now evidence from the decisions published that it has started to slide beyond the promised deadlines. As an example, the LAT proposed a timeline of 105 days from the application to a decision when in the written hearing stream. From the
40 Canadian Underwriter May 2017
published decisions thus far, it can take up to 262 days for a written decision to be released. This would suggest a higher volume of cases will potentially erode the timelines even further. As of February, the LAT hired more adjudicators in anticipation of growth in applications.
MORE ADJUDICATORS On the face of it, the solution may be for the tribunal to hire additional staff, including more adjudicators. However, insurers and claimants could experience delays at the front end of the new LAT process, similar to the backlogs that they experienced with FSCO. Justice Douglas Cunningham was appointed by the Ontario government to review the dispute resolution system made recommendations in 2014. At a panel discussion in November 2016, Cunningham highlighted key recommendations that were not adopted by government that he felt were vital to the success of a new system. Key amongst these is a gate-keeping function that would ensure full compliance with an enhanced mediation process. A review of decisions released to date suggests that the case conference has essentially assumed both roles. Delays with reconvenes at case conferences, multiple case conferences, and preliminary motions are preventing matters from moving through the system expeditiously. Information in a recent Lawyers Weekly article reported that out of almost 6,000 applications,
more than half were either settled or withdrawn. With only 149 cases having gone to hearing, this potentially leaves more than 2,000 cases unaccounted for. This might suggest that the case conference is not serving its intended goal of providing a robust mediation process. As the LAT is trying to find its footing, modifications at the front end of the process, together with additional resources, will go a long way towards ensuring success.
CAT CLAIMS In looking at the results, so far a key discussion point is the use of written hearings as an efficient means to get to the adjudication sooner. The decisions have largely been on single issues and relatively straightforward. The more serious or complex matters are not represented in the sample of reported decisions except for the ruling in P.F.L.R. v. Intact Insurance. In that case, the issue in dispute was whether or not the applicant sustained a catastrophic impairment as a result of an motor vehicle accident (MVA) on October 22, 2015. This was an inperson hearing, where medical experts gave evidence regarding the validity of the Glasgow Coma Scale taken when the applicant was intubated. This was adjudged in favour of the applicant. It remains to see how the LAT will handle the new definition of catastrophic impairment, which took effect for accidents occurring on or after June 1, 2016. The results, quality and speed in which the decisions have been delivered, do serve to inform the industry
and provide roadmaps on various issues. The decisions published appear to be equitable, thus far, trending significantly in favour of insurers. It is noteworthy that these are older claims with an accident report year between 2011 and 2015. In many of these cases, the adjudicators found the applicants’ evidence wanting. The reasoning of the LAT decisions has been fairly straightforward and measured. So far, statutory interpretation of ABs has not materially changed entitlement to benefits. As of early May, there were no reported or yet published cases in which either side sought leave for judicial review.
At that panel, one insurer’s lawyer, Michael Hart, director of claims legal counsel for Desjardins General Insurance Company, made a very astute observation that the LAT represents opportunities for change — for lawyers to redefine how they do things and for insurers to redefine how they deliver their services. Without changes in the way of doing business, the LAT becomes the de facto replacement system to FSCO over run with cases that are not ready to be resolved.
CAUTIOUS APPROACH
On the surface, there has been an improvement in the speed to a decision in cases with straightforward issues without a lot of complexity. Given the promised FEWER APPLICATIONS timeline, there remain a high number If the LAT is, indeed, efficient, equitable, of disputes within the LAT without any and proportional, why are the numbers decisions. This has created speculation of applications so low? In 2015, FSCO re- as to what the hold-up may be. ceived 26,000 mediation applications and With a two-year limitation on filing a of those, 9,500 filed for arbitration. Logi- dispute, there are a mass of cases that still cally, as FSCO winds down, applications have not found their way through the systo the LAT would be expected to increase. tem, potentially signalling trouble ahead. It may well be the case that the marThe lower number of applications and ginal claims are not going forward, or age of the claim before the LAT likely they are avoiding the LAT and will pres- represents a more cautious approach to ent on the tort side. This remains to be the new dispute system. Fundamentally, seen. Also any claims denied after April the AB product is predicated upon the delivery of timely access to ABs to which 1, 2016 will have a minimum of a twoTypes of Hearings and Decisions year limitation period before consider- an injured party is entitled. It is questionable if this mandate is being served. ing dispute options. Written Stakeholders ought to seize the opAnother reason for the underutilization, as has already been heard,In Person may not portunity to find other means to ensure come as a surprise. Plaintiff lawyers at timeliness and fairness to resolve disTeleconference the panel in November 2016 were open putes rather than relying on the LAT to about their hesitation toward bringing be the panacea for all denied claims. Teleconference/Written As the LAT enters its second year, will a LAT application. Concerns were raised 20.00% 30.00% 40.00% 50.00% 60.00%of 70.00% 90.00% 100.00% become a shadow the80.00% former sysregarding costs, evidentiary issues0.00% and10.00% it Preliminary/Motion Issues Reconsideration tem? of DecisionOr Decisions will it avoid the pitfalls? questions of jurisdiction.
Types of Hearings and Decisions
Decision Results 70
Written
60
60 50
In Person
40
Teleconference
33
30 20 12
Teleconference/Written
10
0.00% 10.00% 20.00% 30.00% 40.00% 50.00% 60.00% 70.00% 80.00% 90.00% 100.00%
Reconsideration of Decision
Decisions
Preliminary/Motion Issues
Source: InHEALTH Inc.
70
50
For Applicant
Against Applicant
Split
Source: InHEALTH Inc.
Decision Results 60
0
60
May 2017 Canadian Underwriter
41
Rate Rules
Ontario’s 27-year-old rate approval process can be confusing, especially for those insuring fleets in multiple provinces. Stephen Moore
Partner, Blaney McMurtry LLP
Ontario’s permanent rate and risk classification regulation for automobile insurance has generally not changed since 1990. Despite nearly three decades of experience, there is no jurisprudence that could help insurers who disagree with decisions made by the Financial Services Commission of Ontario (FSCO). While commercial auto has a file-and-use scheme, how it applies to fleets of vehicles can be a source of confusion. While the regulatory scheme provides an appeal mechanism when insurers are unhappy with the regulator’s decisions, there have never been any appeals that have gone to a hearing. This is understandable as insurers would be left in limbo while the appeals proceed. They would not have approval for their proposed filings pending those appeals. To date, disputes between insurers and the regulator are resolved through negotiation.
42 Canadian Underwriter May 2017
Without appeal decisions, there is no body of law that addresses the multitude of ambiguities in the regulatory scheme. This makes it difficult to provide advice when consulted by insurers. Second, by and large, lawyers are not involved in the process. Many would argue that this is a good thing. Insurers usually have a single underwriter or team of underwriters who work with the insurer’s actuary and the insurer’s rate analyst at FSCO to ensure compliance with the regulatory scheme. Lawyers tend to get consulted when FSCO finds that an insurer is not in compliance with the regulatory scheme or an insurer suspects that it may be offside.
THE BASIC SCHEME To fully understand the regulatory scheme, one needs to be familiar with Sections 236 through 238.1 and Sections 410 through 418 of the Insurance Act, Ontario Regulations 664 and 7/00, the various filing guidelines and the superintendent’s auto property and casualty bulletins. It is also useful to monitor the cease and desist orders and the enforcement actions to gain an understanding of the practices that are getting insurers into difficulty with the regulator.
The basic scheme has not changed since 1990. Policies that insure personal lines vehicles are subject to the so-called file-and-approve provisions of the scheme. Insurers must file proposed rates and any changes to their risk classification scheme with FSCO and cannot utilize the filed rates or changes until they are approved by FSCO. The rules stipulate that the rates and risk classification system changes are deemed to be approved 30 days after filing unless the superintendent advises the insurer “orally or otherwise” that it has not been approved. This scheme applies to Ontario’s standard owner’s policy (Ontario Auto Policy 1) and O.P.F. 2 (the driver’s policy) and their endorsements only. Commercial line OAP 1 and O.P.F. 2 policies are subject to the so-called fileand-use provisions. In this case, the insurer may utilize the new rates and changes to the risk classification scheme 30 days after they are filed unless the superintendent advises the insurer orally or otherwise that they are not approved. There is an exemption for policies covering vehicle fleets. The regulation indicates that a fleet consists of a group of at least five vehicles that are under common ownership or management and that are used for business, commercial or public purposes. There have been two superintendent’s bulletins published on what constitutes a fleet. Sections 236 through 239 of Ontario’s Insurance Act impose obligations upon insurers when giving notice of the expiry of, or variation of, contracts of automobile insurance, and impose limits on an insurer’s ability to terminate, decline to issue or to renew such contracts.
In a nutshell, automobile insurers must follow their own approved and filed rules when declining to issue, refusing to renew or terminating a contract of automobile insurance. There is no latitude to terminate a contract for ad hoc reasons. By way of example, a number of years ago, a claimant assaulted an adjuster because the claimant was unhappy about the manner in which the collision loss claim was handled. An attempt was made to file a new rule allowing the insurer to terminate contracts for such conduct. However, FSCO insisted that “assault” be defined narrowly to ensure that it did not provide the insurer with
Insurers must file proposed rates and any changes to their risk classification scheme with FSCO and cannot utilize the filed rates or changes until they are approved. the right to terminate simply because of a heated argument. If this had been a homeowner’s policy, the insurer could have just cancelled the contract pursuant to the statutory conditions.
FLEETS The so-called “fleet” exemption has been and continues to be a source of great confusion and is misunderstood by a number of insurers. Some insurers assume that a fleet can consist of five vehicles located anywhere in the country. That, however, is not the view of FSCO. It takes the position that all five vehicles
must be licensed in Ontario and insured under an OAP 1 for the fleet exemption to apply. This can create problems if an insured is insuring 25 vehicles in one province, but only has three in Ontario. The Ontario vehicles should be insured under a commercial lines policy using regulated rates. For an insurer insuring a multi-national corporation worldwide, but with less than five vehicles in Ontario, this creates some practical problems. This can usually be addressed in a manner that is compliant with Ontario law, but these solutions are inconvenient and can create their own additional problems. The obligation to provide notice of an intention to refuse to renew a policy or to renew it on varied terms, which is imposed by Section 236 of the Insurance Act, does not apply to fleets. The requirement to only use filed rules to decline a risk, terminate a risk or refuse to renew a risk — which is imposed by Section 238 of the act — does apply to fleets. However, if one reviews the Section 238 Underwriting Rule Filing Guidelines, one will discover that there does not appear to be an obligation to file rules for fleet risks with FSCO. Some may find the guidelines confusing in this respect. Accordingly, FSCO has confirmed that it is not regulating fleet underwriting rules. However, fleet underwriting rules still cannot offend the requirements of Ontario Regulations 664 and 7/00. Rate, risk classification and underwriting rule regulation for automobile insurance is a complex topic and requires a good understanding of proper interpretation of the legislation, regulation, bulletins and FSCO’s guidelines. May 2017 Canadian Underwriter
43
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Minor Arguments In hearing disputes over whether or not a claimant’s injuries fall within Ontario’s Minor Injury Guideline, arbitrators with the Licence Appeal Tribunal tend to place greater weight on objective medical evidence and tend to be critical of subjective complaints referred to by medical practitioners.
Kadey B.J. Schultz
Co-Managing Partner, Schultz Frost LLP
The Licence Appeal Tribunal (LAT), which is the adjudicative body for Ontario auto accident benefits (AB) disputes, has been sparing in ruling against insurers when they argue that a claimant falls under the Minor Injury Guideline (MIG). Introduced in 2010, the MIG caps claims for certain injuries at $3,500. MIG was part of an AB overhaul. Consultation with insurance industry stakeholders, healthcare professionals and legal representatives led to the creation of a recovery program that was meant to be faster, more inclusive and capped at $3,500. Consistent with these goals, treatment for minor injuries are funded without prior insurer approval to a maximum amount of $2,200. As such, it acts as the first path for treatment for individuals who sustained predominantly minor injuries as result of a motor vehicle accident. If the AB scheme was a building, the MIG is the lobby where every person injured in a motor vehicle accident may enter. The upper floors of the building, known as the non-MIG and the Cat floors, can only be accessed if specific legislative criteria are met. The upper floors have a security code: reasonable and necessary. Since its inception, the LAT has dealt with various cases where entitlement to benefits turned on whether or not the applicant’s injuries fell within the MIG. Interestingly, the LAT has ruled in the insurer’s favour for the majority of these cases. This tendency seems to be a product of the applicant’s inability to meet the evidentiary threshold to remove themselves from the MIG. Where the LAT has found that an applicant’s injuries fall
within the MIG, this determination has usually been made on the basis he or she has not provided sufficient medical evidence to prove otherwise.
SUBJECTIVE EVIDENCE In meeting their burden of proof, applicants can provide objective and subjective evidence to substantiate their injuries. Objective evidence refers to medical imaging and test results not based on self-reports.Subjective evidence includes opinions expressed by medical practitioners or an applicant’s self-reported complaints or symptoms. The relative weight attributed to each type of evidence will depend on the context of the claim. In circumstances where the applicant is attempting to establish that his or her injury falls outside of the MIG, objective evidence will suffice. However, an applicant may need to submit both objective and compelling subjective medical evidence when claiming that pre-existing injuries would make rehabilitation difficult within the MIG’s $3,500 limit. Understanding the interplay between objective and subjective evidence is central to the potential outcome of a MIG case. Most MIG disputes before the LAT start with outlining which party bears the onus of establishing that the applicant’s injuries fall within or outside of the MIG. In its ruling in Scarlett v. Belair, released in 2015, Ontario’s Divisional Court held that it is the applicant’s responsibility to prove that his or her injuries should not be subject to the $3,500 limit prescribed by Section 18(1) of the Statutory Accident Benefits Schedule (SABS). Additionally, the applicant must provide medi-
May 2017 Canadian Underwriter
45
cal evidence which indicates he or she suffers from an impairment that does not fall under the definition of a “minor injury” under Section 3(1) of the SABS. It is always worth re-reading the definition: “one or more of a sprain, strain, whiplash-associated disorder, abrasion, laceration or subluxation and includes any clinically associated sequelae to such an injury.” In effect, these are predominantly soft tissue injuries. LAT vice-chair Gregory Flude comments in L.C. and Aviva Insurance Company of Canada that the impact of the definition of minor injury and Section 18(1) is to create a regulatory scheme where the focus is on the nature of the injuries sustained and not on the consequences arising out of those injuries. While the SABS provides some legislative guidance as to what injuries will qualify as “minor”, it does not paint the full picture of what injuries would take an applicant out of the MIG. For the full picture, it is important to review the case law. The LAT decisions to date show the LAT is placing greater weight on objective medical evidence as opposed to the testimony and self-reported complaints of the applicant. This is especially true where credibility is an issue. The LAT has not only been critical of applicants’ oral testimony, but also of subjective complaints referenced by medical practitioners in their reports.
DIAGNOSTIC REPORTS In another case, an applicant complained of headaches and chronic pain. The LAT found that her injuries fell outside the MIG after considering that she never visited a chronic pain specialist or underwent any diagnostic testing. It was noted that the applicant only complained of headaches three out of the 22 times she visited her family doctor. Keeping with earlier case law from arbitrators with the Financial Services Commission of Ontario (FSCO), the LAT places significant weight on objective medical evidence when determining whether or not the alleged injuries fall within the MIG. This is epitomized in LAT’s ruling in 2016 in N.C. and RBC General Insurance Company. 46 Canadian Underwriter May 2017
In finding that the applicant’s injuries fell outside of the MIG, the LAT considered diagnostic testing results which, it held, were consistent with the applicant’s subjective complaints. Particularly, the LAT referenced an MRI of the applicant’s right arm and hand, which revealed a deposit of fluid that was indicative of carpal tunnel syndrome. Further neurological testing revealed that the applicant had “crush syndrome” with ulnar neuropathy below the elbow. The LAT held that the applicant provided sufficient medical evidence to substantiate his alleged injuries as falling outside the MIG. This distinction between objective and subjective evidence and the relative weight
The LAT decisions to date show it is placing greater weight on objective medical evidence. afforded to each type is not a stranger to AB litigation. FSCO made a similar distinction. In FSCO’s ruling in Qasimi v. State Farm Mutual Automobile Insurance, arbitrator Marvin Huberman found sufficient medical evidence to substantiate the alleged neurological impairments. The arbitrator placed significant weight on neurological test results that demonstrated signs of radiculopathy and nerve damage. As one would hope, the LAT decisions to date show that the adjudicator will critically assess practitioners’ medical reports. Notwithstanding the expertise of medical assessors, the LAT has critiqued medical reports where objective medical evidence is inconsistent with the assessor’s conclusions. In the dispute before the LAT in B.U. and Aviva Canada Inc., the applicant alleged psychological sequelae. In response, the insurer ordered a psychological assessment, which concluded that the applicant’s psychological impairments were minor and did not warrant treatment in excess of the MIG limit. The LAT held that there was a discrepancy between the assessor’s conclusion and psychological test results. Particularly, the tribunal noted that the assessor’s
conclusion contradicted the objective medical tests which indicated the applicant suffered from “severe anxiety and severe depression.” Thus, the LAT will not accept medical practitioners’ subjective conclusions without evaluating its consistency with the objective medical findings.
WEIGHT ON TESTIMONY While objective medical evidence has a central role in arbitrators’ decision-making, subjective evidence can also be persuasive. The LAT may place greater weight on the applicant’s testimony where there is little objective evidence. In such circumstances, the LAT will apply a holistic approach, considering how the totality of evidence compares to the applicant’s allegations. This approach is illustrated in N.E. and Waterloo Regional Municipalities Insurance Pool. In this case, the applicant could not afford to commission an independent medical assessment and companion report. He argued that this should not prejudice his claim. Addressing this issue, the LAT held that the applicant’s failure to provide an independent medical assessor’s report was not fatal to his case. Rather, it suggested that he could meet his evidentiary burden by providing other, more accessible documentation such as “clinical notes and records from treating physicians, consultation reports from medical referrals, employer’s records, government documentation, correspondence, photographs as well as copies of emails, texts and social media accounts.” The LAT will subsequently consider this evidence along with any medical opinions from treating or assessment practitioners to evaluate their consistency with any objective medical documentation. The LAT will, ultimately, consider the totality of the evidence to determine whether or not the applicant is credible. An important issue to consider when assessing a case and the subjective and objective evidence available is what kind of hearing to have. The majority of the LAT decisions addressing the MIG to date have been in writing. Absent the opportunity to give oral evidence, an applicant is left to the written medical
evidence, and perhaps an affidavit, to make his or her case.
PRE-EXISTING INJURIES Objective evidence continues to play a significant role in establishing preexisting injuries. The LAT requires the applicant to provide sufficient medical evidence that he or she suffered from a pre-existing injury. In L.C. and Aviva, supra, the adjudicator did not accept the applicant’s evidence that his pre-existing degenerative disc changes entitled him to treatment above the $3,500 cap. The degenerative spine diagnosis was made three years after the accident and, therefore, failed to show that a pre-existing condition was identified by a healthcare practitioner prior to the accident. Vice-chair Flude took a strict and critical view of the reports submitted. From the insurer’s perspective, this narrow interpretation of the legislation is particularly helpful in that the LAT requires documented proof that the pre-existing injury was, in fact, diagnosed before the accident and not retroactively in the course of adjusting the applicant’s AB claim. Objective evidence is not determinative of whether or not an applicant’s preexisting condition will remove him or her from the MIG. Rather, it shares an interdependent relationship with subjective evidence. In other words, it is insufficient for an applicant to demonstrate that he or she suffers from a pre-existing injury. The LAT case law supports that the effect of an applicant’s pre-existing condition on the rehabilitation process is central to the analysis. Adjudicators often point to the presence or absence of a medical opinion drawing a connection between the pre-existing impairment and the applicant’s ability to achieve maximal medical rehabilitation. In A.P. and Aviva Canada, the applicant’s family physician noted that pre-accident, she displayed evidence of “cervical facet joint involvement which [had] been established as a common contributor to chronic pain symptoms.” The LAT concluded, however, that the applicant’s health practitioner failed to show how the alleged pre-existing condition impacted the applicant’s ability to recover from
the accident injuries within the MIG. In another written hearing, M.M. and Wawanesa Mutual Insurance Company, the applicant submitted evidence of two prior motor vehicle accidents (MVA) and a workplace injury. In 2009, she suffered a thoracic strain as a result of an MVA, and received treated under the MIG’s predecessor, Pre-Approved Framework (PAF), reaching maximal medical recovery with only mild decrease in her low back range of motion. In 2012, the applicant was involved in a second MVA in which she sustained further injuries to her back. The file with the Workplace Safety Insurance Board noted minor spinal strains with no previous barriers to recovery. The file documented a complete recovery at the end of treatment.
Understanding the interplay between objective and subjective evidence is central to the potential outcome of a MIG case. Although the applicant argued that these pre-existing injuries warranted entitlement to benefits beyond the MIG cap of $3,500, adjudicator Anna Truong was not satisfied on the totality of evidence that these pre-existing injuries were sufficient to do so. Truong noted that none of the assessors had commented that any particular preexisting injuries impeded her recovery from her minor injuries in the accident. This decision took a hard look at the medical evidence and required the health practitioner to address the legal test head-on. The general absence of expert oral testimony and cross-examination, especially where minor injuries are in dispute, underscores the need for better quality medical reports to be provided as evidence at the LAT. When there are conflicting medical assessments, the interdependent relationship between objective and subjective evidence in pre-existing injuries is most prominent. In such cases, the LAT will evaluate the merits of each opinion against the
totality of objective evidence. For example, where adverse medical opinions exist as to whether or not an applicant’s pre-existing arthritis in her hand will impact her ability to improve her grip strength, the LAT would likely consider which opinion is most consistent with diagnostic imaging or test results. Where conflicting opinions exist, it is also possible the LAT would assess all reports and come to its own conclusion of whether or not the MIG applies and what treatment is reasonable and necessary.
PUSH FOR WRITTEN HEARINGS From the modest pool of data available to date, on the LAT’s one year’s worth of MIG decisions, one could expect that the LAT will be more critical than FSCO arbirtrators were of expert reports to seek out the evidence required to satisfy the legal test as defined by the MIG and the SABS. Given that MIG cases tend to be litigated in writing, documentary evidence becomes increasingly crucial to succeed in a MIG dispute. Mediocre or non-existent expert reports will cause the claim to fail. Ultimately, the burden of proof lies with the applicant to show this relationship. Where such medical evidence does not exist, it is likely that the LAT will find that the MIG applies. It will be interesting to see a year from now, whether MIG cases will still be predominantly in favour of insurers. Until then, insurers are advised to do three things. For one, they should ensure that all pre-accident and post-accident records are requested pursuant to Section 33 of the SABS from the outset of the adjusting of the claim. They should also make sure that assessors with their insurers’ examiners are clearly asked to answer whether or not the injuries are predominantly minor in nature and if the treatment is reasonable and necessary. Third, insurers should push for written hearings, which are not only more cost-effective, but keep the subjective evidence to a minimum, while making a MIG case truly about the interpretation of the definition of minor injury and its application to the case at hand. This article was prepared with the assistance of Anissa Arra and Evan Presvelos, articling students at Schultz Frost. May 2017 Canadian Underwriter
47
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Robertson Morris Consulting and Pagewater Consulting enter into a strategic agreement on recruiting assignments April 13, 2017 — by Robertson Morris Consulting
CEP new head office tour
MKA Canada, Inc. announces new Edmonton office
April 13, 2017 — by CEP
April 6, 2017 — by MKA Canada, Inc.
Logiciels Deltek Inc. goes live with web services
Markel acquires Allsport
April 12, 2017 — by CSIO (Centre for Study of Insurance Operations)
April 6, 2017 — by Markel Canada
WICC prepares to rally the Relay For Life troops at its annual gala
April 4, 2017 — by FIRST Insurance Funding of Canada
April 12, 2017 — by Women in Insurance Cancer Crusade (WICC)
Totten launches national healthcare practice April 11, 2017 — by Totten Insurance Group
DSB Claims opens new office in Barrie, Ontario April 11, 2017 — by DSB Claims
The Society of Automotive Engineers International publishes 30 Forensic Engineering research paper April 11, 2017 — by -30- Forensic Engineering
DKI Canada is now hiring regional account director, Atlantic region April 11, 2017 — by DKI Canada
Automate your payments with FIRST Canada at the IBAM convention April 11, 2017 — by FIRST Insurance Funding of Canada
Rob Ginn promoted to vice president of operations for Vericlaim Canada April 10, 2017 — by Sedgwick
30 Forensic Engineering announces exciting career opportunities April 10, 2017 — by -30- Forensic Engineering
Automate your payments with FIRST Canada Quarter Century Club 58th annual reception to be held May 24, 2017 – Toronto April 4, 2017 — by Quarter Century Club
30 Forensic Engineering proudly announces retitled Transportation Safety Group April 3, 2017 — by -30- Forensic Engineering
APRIL Canada launches insurance for financial services April 3, 2017 — by APRIL Canada
The Guarantee’s Transportation Division announces new strategic partnership March 30, 2017 — by The Guarantee Company of North America
FirstOnSite Restoration reinforces leadership team in Alberta March 29, 2017 — by FirstOnSite Restoration
Construction claims team at 30 Forensic Engineering offers productivity loss assessment services March 29, 2017 — by -30- Forensic Engineering
Fred Nzivo joins Cunningham Lindsey as new senior multi-line adjuster in Canada
SMI goes live with eDocs, obtaining CSIO certification for personal and commercial lines of business
March 29, 2017 — by Cunningham Lindsey
April 10, 2017 — by CSIO (Centre for Study of Insurance Operations)
March 29, 2017 — by Markel Canada
Rise & Shine PJ Walk for Kids presented by ServiceMaster Restore April 10, 2017 — by ServiceMaster of Canada Limited
C.J. Campbell selects Policy Works as its Lloyd’s issuance platform
Markel trade credit team comes to Canada Announcing the Quarter Century Club 58th annual reception, May 24, 2017 – Toronto March 28, 2017 — by Quarter Century Club
La Garantie procède au lancement officiel de la protection H2O+MC
April 10, 2017 — by Policy Works
March 28, 2017 — by La Garantie
Kernaghan Adjusters continues to expand in Calgary with the addition of 2 new general adjusters
The Guarantee officially launches H2O+TM water protection
April 7, 2017 — by Kernaghan Adjusters
March 28, 2017 — by The Guarantee
Economical asserts its commitment to the broker channel by providing sophisticated industry data to brokerages from coast to coast
Townsend Mutual Insurance Company joins Mutual Concept Computer Group Inc.’s (MCCG) client community
April 6, 2017 — by Economical Insurance
March 27, 2017 — by MCCG
To Read the Full Story for Each Press Release, visit insPRESS.ca
SAVE THE DATE! Annual WICC Québec fundraising event to benefit the Canadian Cancer Society TUESDAY
OCT
2017
24
Le Windsor Hotel, Montreal
Uniting the industry in the Fight for Life
TM
Registration and payment:
Proud Platinum National Sponsor.
wicc.ca/qc For information: Jo-Anne Polidoro 438 843 9714
TM
Safe Driving
Jack Rozint
Vice President of Sales and Service, Mitchell Auto Physical Damage Solutions
New vehicle safety features, including crush-resistant materials and driver-assist technologies, are reducing highway risk, but they also present a challenge to collision repair providers. Vehicle complexity has significantly increased over the last decade, with sophisticated electronics, safety features and the type of materials used in car manufacturing continuing to evolve. Gone are the days when collision repair was simply about sheet metal, headlamp and bumper replacements. Instead, adaptive front lighting, front and rear back-up systems, 360-degree cameras and automatic braking have all contributed to the complexity of vehicles as they have improved safety. A few years ago, many of these advanced safety systems could only be found in high-end vehicles, but are now being built into the manufacturing process on mid-level sedans, cross-overs, pick-ups and mini-vans. As the cost of safety components continues to decrease and consumer demand increases, more and more vehicles will be built with advanced
safety features in the coming years. While these new features will have a direct impact on bodily injuries and collision severity, they will also present new challenges for collision repair facilities.
GET SMART Over the last few years, many of the new vehicle safety features that have been developed were built to help with accident avoidance. From automatic braking to blind spot detection systems, vehicles are becoming smarter to keep drivers and passengers safe and avoid collisions altogether. But accidents continue to occur, and as such, advances in technology, design and special materials are helping to reduce the risk of severe injuries when a collision takes place. For example, the number of air bags installed in some vehicles has increased from two to 10 or more, providing added protection to passengers. In addition, the increased use of special materials in car manufacturing, such as high-strength steel and aluminum, has also helped create passenger compartments that are crush-resistant and safer. An article posted to the website of the United States Department of Energy reports that at the equivalent weight, aluminum can absorb twice the crash energy of mild steel. This permits the design of larger crush zones without weight penalties. On top of that, it is anticipated there will be a
May 2017 Canadian Underwriter
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continued expansion of special materials used in vehicles, with projections of 90 % growth in the use of high-strength steel by 2025. But while these advancements are making vehicles safer, injury severity is being offset with distracted drivers.
EYES ON Distracted driving continues to play a bigger role in the traffic accidents and fatalities that occur each year. The U.S. National Highway Traffic Safety Administration reports that during daylight hours, approximately 660,000 drivers are using cellphones while driving. Advances in technology and a mobile workforce have allowed people to be “always on� and connected 24/7, only increasing the amount of distraction drivers face. Now people are no longer just talking on their phones while driving, but texting, emailing and watching and posting videos. As a result, while vehicles become safer, drivers become more dangerous, offsetting progress made to reduce accidents. In turn, new technology and features have made the vehicle repair process even more complex. Fixing a car as little as five years ago was drastically different than what the repair process looks like today. A repair that used to be a simple replacement of a bumper cover and headlamp now includes everything from a bumper cover, headlamp, camera in the grille, sensors used for assisted parking and airbag deployment 52 Canadian Underwriter May 2017
A repair that used to be a simple replacement of a bumper cover and headlamp now includes everything from a bumper cover, headlamp, camera in the grille, sensors used for assisted parking and airbag deployment sensors. sensors. With each new added feature, it becomes another step, another part and another skill that manufacturers and collision repair facilities need to consider. Similarly, the repair of a side mirror used to just mean getting a new mirror and attaching it. Now, the mirror might be heated for defrosting, include a blind spot-detection sensor and require a scan tool for recalibration of the blind spotmonitoring system, all adding to the complexity of the repair.
LEARNING CURVE These new features present a number of challenges in the repair process, including more equipment to repair and more expensive parts, leading to higher repair costs. On top of that, a higher level of training is required for technicians doing the repairs. As technology continues
to evolve, so do the skills and knowledge of the people tasked with fixing a bumper that has multiple components. In order to most effectively service customers, collision repair facilities need to devote extra time studying new parts, original equipment manufacturer (OEM) repair procedures and how to correctly execute repairs on late-model vehicles. This presents a challenge in and of itself given the rapid level of change that occurs each year with technological advancements. In fact, as advanced technology continues to be built into vehicles, claims and repair organizations face challenges in keeping up with the rapidly evolving industry. Carriers have a plethora of data on vehicles and repairs available today, but it is not typically categorized to split out repair costs for high-tech safety systems, such as advanced driver-assistance systems (ADAS). Therefore, being able to pinpoint and analyze how much of repair severity is attributed to these systems is not easy. On top of that, many OEMs who developed these technology features did not consider how the technology would impact vehicle repairs until after it was introduced. Because technology has changed so rapidly and has been adopted so quickly, car manufacturers did not account for how the after-market would need to become better versed in repairs, or that they would need deeper insights and data on how to fix these new systems. As consumers continue to request the latest technology in their vehicles, advancements in safety features will only continue to grow. But while this trend toward improved vehicle safety continues, distracted driving seems to be on a path to keep collision rates high. These more complex vehicle systems will continue to add to the complexity of vehicle repairs. In the past few years, the repair costs related to advanced safety systems and special materials have increased dramatically on late-model year vehicles. This trend can be expected to continue in the future, as manufacturers, collision repair facilities and carriers need to work together to keep up with the latest developments.
REGISTER NOW www.niccanada.com
2 17
October 1-3 Québec City Convention Centre
Sessions include: • The View from OSFI • Straight Talk Commercial: Global Risk Manager Views • Straight Talk Personal: Consumer Focus Millennials Discuss Insurance From Their Perspective
The NICC is Canada’s pre-eminent insurance conference attended by senior executives of insurers, brokers, reinsurers, risk managers, regulators and industry associations. Together with our senior advisory committee of industry CEO’s, we are once again making the NICC a can’t miss industry leadership event.
• Global Leaders’ Panel • Did We Get It Right? A Realistic View of the Industry’s Performance in Fort McMurray • C-Suite vs. Analytics & Business Intelligence vs. Cultural Shift • Drones and Sensors: A Tool for the Industry • Where Water Meets Underinsurance: Canadian Flood Risk - A Public Policy Imperative • Canadian Auto - State of the Union • InsurTech - Evolution or Revolution? Platinum Sponsors
Keynote Speaker Brett King
Keynote Speaker Kirstine Stewart
Founder & CEO of Moven
Chief Strategy Officer at Diply
Connect with us on Twitter:
@NICC_Canada Follow the conversation: #NICC2017 Gold Sponsors
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YOUR ACCESS TO JUSTICE
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May 2017 Canadian Underwriter
53
MOVES & VIEWS
UPCOMING EVENTS: FOR A COMPLETE LIST VISIT
www.canadianunderwriter.ca
AND CLICK ‘MY EVENTS CALENDAR’ ON THE HOME PAGE
1
Totten Insurance Group has established a new national healthcare team. In the coming months, Theresa Teixeira, Totten Insurance Group’s executive vice president and chief underwriting officer, and her team will connect with brokers across Canada. Totten Insurance supports the broker community in key segments, including commercial property, commercial casualty, healthcare, hospitality, construction, forestry, mining, professional liability and personal lines.
2
Alberta-based Full Circle Insurance Ltd. and Ontario brokerages Fairview Insurance Brokers Inc. and Steven Kaluski Insurance Brokers Ltd. have joined BrokerLink, which has operations in Alberta, Ontario and Atlantic Canada. Terms of the transactions were not disclosed. Full Circle Insurance offers home, auto, recreation/travel and commercial insurance; Fairview Insurance Brokers provides a wide range of products serving the needs of drivers, homeowners, tenants and commercial customers; and Steven Kaluski Insurance Brokers offers commercial and personal insurance.
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Dave Schioler [3], chief executive officer of the Insurance
54 Canadian Underwriter May 2017
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Brokers Association of Manitoba (IBAM), will step down April 11, 2018. During his 11 years at IBAM’s helm, it has grown five times, the association reports. Schioler says he still has much to do during what will now be a transition year.
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St. John’s-based Cal LeGrow Insurance Ltd. recently joined Canadian Broker Network (CBN). “Under Jeff LeGrow and Rod Vatcher’s leadership, their firm aligns perfectly with our principles of innovation, collaboration and independence,” CBN managing director Lorie Phair says in a statement. “One of Cal LeGrow’s core values is embracing innovation; this
fully aligns with CBN’s drive to enhance best practices and adopt digital technology built around a better customer experience,” adds Jeff LeGrow, chief executive officer and chairman of Cal LeGrow Insurance.
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Stefanie McKay [5] is ENCON Group Inc.’s new chief underwriting officer. McKay will be responsible for leading and developing underwriting strategy across all lines of business. She last served as senior vice president of the firm’s errors and omissions underwriting department.
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Cameron Copeland [6] was named president of Can-Sure
Underwriting and Beacon Underwriting, effective April 15. Copeland replaces CanSure Underwriting founder Jeff Hart, who has “decided to step away from the industry to spend more time with his family and pursue other business opportunities,” but who will serve as an executive advisor for a “period of time.” Can-Sure Underwriting is a managing general agency. Beacon Underwriting offers, among others, insurance for personal and commercial watercraft, motorcycles (British Columbia), mobile homes, boat dealers and marina operators.
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Multi-line brokerage Andrew Agencies Ltd. acquired Airdrie,
MOVES&&VIEWS VIEWS MOVES
of Calgary; Gordon Adams; Robert Cartwright, Jr.; Al Gorski; Leslie Lamb; John Phelps; Michael Phillipus; Frederick Savage; and Lori Seidenberg.
3
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9 positions have included general 11adjuster, branch manager, vice president of operations and Lloyd’s Division leader. Alberta-based McCracken Insurance M.I.L. Ltd. on April 3. The new Airdrie Macdonald Chisholm location will be Andrew Traskfirst Insurance (MCT) Agencies’ in Alberta, announced in early joining 17 others January that it Saskatchewan. will join propManitoba and erty and casualty brokerage All staff of Andrew Agencies BrokerLink. of the will remain,The withterms Debbie transaction were notasdisMiller now serving branch closed, notes a statement manager. Current staff will be from BrokerLink.with BrokerLink complemented existing companies, subsidiaries of product specialists. Andrew Intact Financial Corp., Agencies, established in include officesManitoba, serving 1913 in84 Virden, clients in Atlantic Canada, offers home/condo/tenant Alberta andand Ontario. Dating insurance commercial, back more than 60and years, automotive, travel MCT has more thanas110 health insurance, wellinas surance in 18 financialprofessionals services; McCracken offices. Michael who Insurance, whichBrien, has been has led MCT over the last 12 offering insurance in Airdrie years, joins BrokerLink as and the surrounding area head its Atlantic operations. sinceof1963, provides auto,
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Carolyn Snow [7] will lead RIMS as president for thecommercial 2014 term,and home, farm, which took effect January 1. life insurance. Snow, who has been on the RIMS Board of Directors Rob Ginn [8a] has for seven years, is currently been promoted to director the of risk management position of vice for Humana Inc. She previously president of operations at served as RIMS’s Vericlaim Canada,treasurer, report secretary and director of Sedgwick its subsidiary, external affairs. Theserved RIMS as Vericlaim. Ginn has boardoperations for 2014 manager also includes both and vice Richard as anpresident adjuster at Vericlaim Roberts,and Jr.;has treasurer Julie Canada more than Pemberton; corporate secre20 years of experience as an tary Nowell Seaman, independent adjuster.director Still of global risk management for at Sedgwick, Lisa Bodemann Potash of [8b] hasCorporation been named Saskatchewan Inc.; Gloria business relationship Brosius; Steve director manager in the Pottle, company’s of risk management services Mississauga office and will at York University; have oversight over Jennifer client Santiago;inJanet Stein, accounts Canada. Indirector of risk management and addition, Josie MacKinnon insurance at the University [8c] has taken on the role of
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As of January 8, Toronto insurance broker Jones DesLauriers Insurance Management Inc. 8c (JDIMI) had acquired Whitley Insurance and Financial Services. Whitley has national client Insurance service director offices in Belleville, Ontario in the Mississauga office. and the nearby communities of Trenton, Deseronto and FirstOnSite Stirling. “The acquisition is Restoration has expected to buildaanumber solid welcomed presence JDIMI in Eastern of people for to new positions Ontario and position thehas firm out West. Kevin Clarke to better service their clients, been appointed senior vice with strengthened president, Prairies;commerJamie cial andispersonal Mackie the newinsurance director offerings in thePrairies; region and of operations, Kylea new financial Scott will now services serve asdivision,” notes a statement from district general manager for JDIMI. President CEO Saskatchewan andand Manitoba; ShawnDeines DeSantis lead the Aaron haswill been teams from both companies. named branch manager for Loris ClarkeKevin [8] has been Edmonton; McNeill named successor to Paul has taken on the role of Whitley,manager presidentforofGrand Whitley branch Insurance, will remain Prairie; andwho William Elliott during a transition period. has been named the branch
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manager for Calgary.
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Ken C. Rayner has Scott[9] Gunter joined Anderson [10a] has been McTague & Associates named Chubb’s Ltd. division as its director of businew president, ness development, Central North America Commercial Region. “Ken brings a Steven wealth Insurance, succeeding of experience to our comPozzi [10b], who is retiring pany,ahaving various after 36-yearheld career in the senior management positions industry and assuming a spewithadvisory insurers role and on other MGAs,” cial special
says Chuck McTague, president of Anderson McTague & Associates, a familyowned MGA based New projects. Gunter lastinserved Brunswick. In January, Anas chief operating officer derson McTague & Associates of Chubb’s North America announced it was expanding, Personal Risk Services adding an office in Toronto division. Also at Chubb, Anato service[10c] the brokers of Ontario Robic has been named and company’s Manitoba. new Rayner’s the chief appointment confirms operating officer, Norththe company’s “commitment to America personal risk services. the Ontario/Manitoba marketplace, and Fred to theNzivo building [11]of a local support team to assist has been named brokers withCunningham their surplus lines andCanada difficult to place Lindsey Claims business,” McTague adds. Services Limited’s new
11
senior, multi-line adjuster in Calgary. With more than 14 The Guarantee years of experience, Nzivo Company previously worked as anofinNorth America dependent adjuster and staff has announced thatnational Tara adjuster with both Wishart [10] became vice adjusting firms and insurers. president of claims for the insurer’s Toronto branch on Stephen Catlin December 2, 2013. Having [12], executive 21 years ofdeputy experience in The chairman Guarantee’s claims of XL Group Ltd.’s Board of department, willfor be Directors, willWishart not stand responsible for the operations re-election at the company’s of the Toronto Branch Claims. upcoming Annual General She first in joined GuaranMeeting May. The XL Group tee in 1995 as an adjuster acquired Catlin Group Ltd. and has held rolesbeen of increasin 2015 and has using ing seniority thesince comthe XL-Catlinwith brand pany,ofincluding, May that year.most Stephen recently, manager for Catlin — claims who will continue specialty lines. Wishart is a as executive deputy chairman member both the Surety until Mayof15 — founded Association Catlin GroupofinCanada 1984. and the Canadian Association of Women in Construction.
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May 2017 Canadian Underwriter February 2014 Canadian Underwriter
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GALLERY
The City of Brotherly Love played host to the 2017 convention (title: Risk Revolution) of the Risk and Insurance Management Society (RIMS) from April 22 to 26. The official welcome party at Philadelphia’s Franklin Institute, a science museum, gave delegates the chance to meet each other and get charged for three full days of walking the tradeshow floor, taking in educational seminars and inspiring keynote speeches by the likes of Michael J. Fox, and, of course, going to more parties. Canadian Underwriter was a media sponsor of the convention, the largest in the insurance world.
56 Canadian Underwriter May 2017
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GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
May 2017 Canadian Underwriter
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GALLERY
SCM Insurance Services sponsored this year’s RIMS Canada Night at Philadelphia’s grand Masonic Temple. In between the mixing and mingling, RIMS Canada Council Chair Reineke Lips and Southern Alberta RIMS director Trinh Tran presented donations from their respective organizations totaling $15,000 to Joe Restoule, president of the William H. McGannon Foundation, which supports students interested in risk management.
58 Canadian Underwriter May 2017
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
Canadian Underwriter was privileged to attend numerous other RIMSassociated functions, including a pre-conference cocktail reception presented by Crawford & Company at Philly’s Brick and Mortar gastropub on April 22.
May 2017 Canadian Underwriter
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GALLERY
Disco Glam was the theme of this year’s Women in Insurance Cancer Crusade (WICC) Gala in Toronto. Canadian Underwriter co-sponsored the April 12 dinner, dance and silent auction, which featured performances by ABBA and Bee Gees tribute bands and raised $150,000 for the Canadian Cancer Society.
60 Canadian Underwriter May 2017
GALLERY See all photos from this event at www.canadianunderwriter.ca/gallery
continued on page 62... May 2017 Canadian Underwriter
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GALLERY ...continued from page 61
62 Canadian Underwriter May 2017
See all photos from this event at www.canadianunderwriter.ca/gallery
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Putting the pieces together.
Events and Seminars Calendar CIP Society Events and Seminars give you the opportunity to learn, to network, to catch up on industry developments and to advance your professional and career development. CIP Society Seminars
CIP Society Events
Medicine Hat—Introduction to Condo Insurance ........................................May 30 Medicine Hat—Condominium Insurance Claims .........................................May 30 Kelowna—Trending Topics in Tort Law ........................................................May 30 Hamilton—Risk Forum 2017 ..........................................................................June 1 Cornwall—The Basics of Business Interruption..............................................June 1 Calgary—Introduction to Condo Insurance....................................................June 7 Calgary—Condominium Insurance Claims ....................................................June 7 Kitchener—Auxiliary Heat.............................................................................June 15
Calgary—Battle of the Insurance Bands ........................................................June 1 Vancouver—Golf Tournament ........................................................................June 2 Toronto—Fellows’ Golf Tournament ..............................................................June 5 Ottawa—Wine & Cheese & Learn................................................................June 15 Victoria—Golf Tournament ..........................................................................June 21 Kelowna—Okanagan Boat Cruise .................................................................July 13 Edmonton—Annual Golf Fun Day .................................................................July 17 Hamilton—Volleyball Tournament.......................................................... August 30
Looking for insight and research on the latest trends in the p&c industry? Visit our free online library of Trends Papers at www.insuranceinstitute.ca/cipsociety/information-services. Looking for information to advance your career? Visit: www.insuranceinstitute.ca/mycareer.