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Archive for November 2012

Ontario Court of Appeal Upholds “60 Day” Rule for FSCO Mediations

The Ontario Court of Appeal has upheld a decision from the Superior Court of Justice of Ontario that declared a mediation by the Financial Services Commission of Ontario (FSCO) failed if it has not been mediated within 60 days of the application being submitted.

In Cornie v. Security National [2012 ONSC 905], which was heard with three other similar cases, Justice J.W. Sloan found the insurance companies’ postion that accident victims must simply wait to be ”preposterous” and suggests that FSCO can continue to try to comply with the 60 day period or seek a change and/or ask for some legislative direction to extend the 60 day period in appropriate circumstances.  This decision was posted in our blog on February 9, 2012.

This ruling means that, when an accident benefits insurer has denied a benefit, the insured can apply for mediation at FSCO and, 60 days after the mediation has been filed, the insured can then move on to either arbitration or a lawsuit against the insurer if the mediation has not been conducted within that timeframe.

The Court of Appeal concluded their decision by stating the following:

[56]        The legislative scheme for resolving disputes about statutory accident benefits requires that insured persons resort to a mandatory mediation process before commencing a court proceeding or submitting their disputes to arbitration. The Act, the regulations and the DRPC make it clear that this process is intended to be completed within 60 days from the filing of an application for mediation with FSCO, unless the parties agree to an extension of time. The scheme postpones the right of insured persons to commence civil actions against their insurer in order to allow the mediation process to be completed within the time prescribed, but leaves them free to commence actions once that period has expired.

Anti-Fraud Task Force Issues its Final Report

The Ontario Automobile Insurance Anti-Fraud Task Force Steering Committee has released its Final Report to the Minister of Finance.

The Committee makes several recommendations, including:

  • The formation of an Anti-Fraud Awareness Implementation Group;
  • Require insurers to disclose publicly how they choose and assess the performance of businesses and professionals they recommend to consumers or refer them to see, such as independent medical examiners;
  • Require insurers to ensure their public information on how consumers may register a complaint is simple to understand and easy to locate;
  • The government should reduce uncertainty and delay for those who have legitimate auto insurance claims;
  • Implement a province-wide licensing scheme for the towing industry;
  • Collect information about towing expenses to facilitate analysis of relationships between tow operators, collision repair facilities and health care clinics;
  • Take steps to reduce unreasonable storage costs for vehicles damaged in a collision;
  • Permit insurers to collect a cancellation fee from claimants who fail to attend a medical examination at the agreed time, without reasonable notice or explanation;
  • Insurers should move aggressively to establish an organization that would pool and analyse claims data to identify potential cases of organized or premeditated fraud;
  • Require the licensing of health clinics that treat and assess auto insurance claimants and empower FSCO to regulate their business practices, as well as oversee and audit the business and billing practices;
  • Additional powers for FSCO to conduct fraud investigation and enforcement;
  • Require claimants to confirm attendance at treatment facilities and receipt of goods and services billed to insurers;
  • Require insurers to itemize the list of invoices they have received when they provide a benefit statement to a claimant every two months;
  • Allow insurers to suspend income replacement benefits when there is compelling evidence the claimant has submitted a fraudulent claim in conjunction with an effective, timely and robust dispute resolution system; and
  • Health regulatory colleges should enhance their understanding of the consequences associated with fraud and ensure that complaints are investigated and lead to disciplinary action where appropriate, as well as develop professional standards, guidelines and best practices to improve the quality of independent medical assessments of auto insurance claimants conducted by their members.

The entire report can be read by clicking here.

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