Driving Change in Ontario

April 24, 2024

Last month the Ontario Government released its 2024 Budget. A headline-grabbing feature of the budget was the long-awaited announcement of reforming the Ontario Auto product. What exactly those changes are going to be has still yet to be determined. However, the IBAO works closely with Ontario’s Ministry of Finance and they’ve shared with us that the changes will: 

  • Be Industry Led – The final details will be built by a group of stakeholders, which includes IBAO 
  • Not Be Rushed – There are no defined timelines for when these changes will be made available to consumers  
  • Avoid Using Prescriptive Premium Targets – With more choice, more competition and removal of red tape, any cost savings would be market driven, not government driven. 

“Reforming Ontario Auto Insurance is complex and we’re glad to be able to work with Insurance Brokers Association of Ontario and draw on their expertise,” said Minister of Finance, Peter Bethlenfalvy.  

Let’s take a closer look under the hood at the proposed reforms addressed in the budget:

There’s a focus on optionality

“Mandatory auto insurance accident benefit coverage will continue to apply to medical, rehabilitation and attendant care benefits, while all other benefits would become optional.”  

There’ll be a review of the health service provider guidelines and framework

The government is requesting that the Financial Services Regulatory Authority of Ontario (FSRA) review the Professional Services Guideline and the Attendant Care Hourly Rate Guideline, and consider updating these guidelines based on their findings.” 

Auto Insurance is to become the first payer

“The government will be proposing to make auto insurance pay for medical and rehabilitation benefits following an auto accident before extended health care plans do. This would apply to all automobile accidents, regardless of the injury sustained.” 

There’ll be a review of how claims processing works at FSRA

“The government is also requesting that FSRA conduct a review of the Health Service Provider Framework and the Health Claims for Auto Insurance (HCAI) system to find administrative and cost efficiencies to contribute to having a more modern and efficient system.” 

“There’s been discussion that with additional consumer choice, comes additional work and risk for brokers. We’ve suggested to the government that for this reason, these changes will need to come with new protections for brokers,” said IBAO CEO Colin Simpson.  The Government has confirmed that they are open to hear our recommendations in this regard. 

In the budget there is a continued commitment to review the use of territorial rating, which is something we’ve advocated for. The budget notably doesn’t include mention of using credit scoring for auto insurance, which is one measure we’ve advocated against. Our positions on both of these issues are crucial for protecting consumers, especially the most vulnerable among them.  

We’ll continue to work with the Ministry of Finance, and it seems as though there’ll be a lot of work to be done. We’re building a working group of expert brokers to help us advise the government and generate suggestions of changes that will be of the greatest benefit to consumers.  

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