FSCO Approves Form Changes To Facilitate Better MIG Data

FSCO has introduced an additional change effective November 1, 2012 dealing with the submission of the Auto Insurance Standard Invoice (OCF-21).  As of the effective date HCAI will be rejecting invoices submitted that do not include two new mandatory data fields dealing with MIG treatment. 

The two fields are the date that each MIG treatment Block commenced, and the profession(s) of the health practitioner(s) who provided the treatment, are to be identified.

These changes build on previous revisions to the OCF-21 back on July 1, 2012 when it became mandatory to complete the “Plan Number” field. The Health Claims for Auto Insurance July 2012 Guideline (Superintendent’s Guideline No. 02/12) provides direction on how to complete this field.

These changes are intended to provide FSCO and stakeholders with a better understand medical and rehabilitation costs and trends. As well, there have been gaps identified where additional information is required in order to obtain useful data regarding minor injury claims.

FSCO bulletin found here...

Social Media and Auto Insurance

Social media is a tool that people use to share and learn more about each other. In doing so, you get to know people better and build relationships.

Even if you wanted to, it is impossible to ignore the phenomena of social media.  Social media platforms are now part of mainstream business life.  Insurers now have Facebook pages, Twitter handles and YouTube videos.

Many people think it is about e-commerce.  E-commerce has nothing to do with social media; in fact a great way to fail at social media is to spend your time using it to “sell”. Just because you have a sales-enabled web site does not mean you are social.

Social media sites allow users to create, distribute and receive specialized content and to interact with communities of people.  But the extent to which insurer have adapted to, and embracing social media varies considerably, despite the opportunities available.

Social media first benefits the consumer and that in turn benefits the company. Here’s how that works: The company has the greatest opportunity now, with the advent of the social networks and the number of people now using the social web, to provide value added services via social channels. In addition to providing value added content and resources for clients, the company as a result also creates content that increases audience reach (via search engines, LinkedIn, Twitter, Facebook, Google+). Increased reach can then lead to new business development.

The company is also in a position to learn more from our clients about what theycare about – as they share on a personal level, ask questions in the public eye, or dialogue with us. Companies used to have to conduct research, surveys and focus groups to get this kind of valuable information in the past. Now you have very real and immediate access. Social media is a win- win. Customers have a very distinct voice which drive services in to meet their needs, and companies who listen and engage stand to benefit.

Smartphone Apps

The Help I Crashed My Car Blackberry cell phone app allows you to contact your car insurance company, a body shop and up to 3 family members if you’ve been in an accident. This is very useful if you’ve been injured as well because this free Blackberry app links up with your phone’s GPS system to help you find police, hospitals and rental facilities in the area that you’ve had the accident.

We all know that drinking and driving is a very dangerous habit and should never be practiced. Not only does it threaten the safety of everyone on the road, it could increase your auto insurance rates. This is why theR-U-Buzzed iPhone app was released. By entering your weight and what you drank into the application, you will receive a fairly-accurate estimate of your blood-alcohol content and a recommendation of whether or not you should drive.

Geico Auto Insurance offers an iPhone app called the GeicoGlove Box. It offers a lot of great features to Geico customers, including offering account access and claims assistance. Also, you can take advantage of videos, how-tos and roadside assistance.

 

Facebook

For insurers, it is important to engage people who refer others to your company.  One of the best examples is Facebook Commerce, which allows customers to share their purchases (or purchase intent) through their Facebook page.  In other words, advertising it to the broader online community.  A credible social media presence not only builds trust with customers, it keeps brands at front of mind.

Twitter

Some companies have embraced Twitter to keep in touch with customers.  A growing number of consumers have shown a preference to Twitter as opposed to a call centre at the end of an 800 number.  Tweets range from job opportunities to weather advisories.  Here are examples of tweets recently sent out by Geico in the U.S.:

Save $10 on tickets to the GEICO 400 at Chicagoland Speedway with coupon code GEICO2012. http://bit.ly/TvyicG

Check out the http://www.youtube.com  homepage today to see some of our new commercials, including one that isn't on TV.

An important message about Hurricane Isaac: http://www.youtube.com/watch?v=29nbrr-tcxk

GEICO is hiring all across the country! For more watch this http://www.youtube.com/watch?v=4FKa5JnY54g … and see our jobs site at http://www.geico.jobs

YouTube

Some successful campaigns have focused on reducing risk through education and safety tips.  A wide range of online tools have been utilized including blogs, Twitter, Facebook and YouTube.  YouTube very much is adept at communicating to customers.  The IBC has created quite a number of YouTube videos including a series on fraudand tips from an insurance perspective on how you can help make it easier to get your life back together after any natural disaster or weather emergency.

Social media should be seen as a tool that complements the business and marketing strategies. It is important to monitor social media activity to learn what consumers and the public comment about you.  And how will you use the feedback to develop new brands and strategies?

Report Confirms That Collisions In Small Vehicles Cause More Injuries

It should come as no surprise that you are more likely to be injured as a passenger in a small vehicle.  The Insurance Institute for Highway Safety (IIHS) and Highway Loss Data Institute reported has provided accident safety data on a wide range of vehicle models including mini, small and midsize four-door cars. Clearly smaller vehicles had more frequent than average personal injury claims.  Below is a comparison of mini 4-door cars and large SUVs. Not only are personal injury claims higher in the smaller vehicles but so are collision claims.

To see the data on all vehicle models reviewed including years prior to 2009 to to the IIHS website at www.iihs.org.



MINI 4-DOORS 2009-11

Vehicle	Collision	Property damage	Compre- hensive	Personal injury	Medical payment	Bodily injury
Chevrolet Aveo	127	123	105	183	212	175
Ford Fiesta	98	95	104	134	140
Hyundai Accent	127	131	81	173	214	179
Kia Rio	115	121	84	175	203	151
Mazda 2	91		130
Toyota Yaris	112	101	89	201	171	125
Toyota Yaris hatchback	89	91	73	127	146	94

LARGE SUVs 2009-11

Vehicle	Collision	Property damage	Compre- hensive	Personal injury	Medical payment	Bodily injury
Buick Enclave	83	101	91	62	61	90
Buick Enclave 4WD	90	116	101	56	62	98
Chevrolet Tahoe	68	108	97	59	70	93
Chevrolet Tahoe 4WD	66	112	95	58	61	96
Chevrolet Tahoe hybrid	47		112
Chevrolet Tahoe hybrid 4WD	104	170	111
Chevrolet Traverse	67	100	86	79	74	88
Chevrolet Traverse 4WD	75	108	97	77	75	81
Dodge Durango	116		103
Dodge Durango 4WD	66		127
Ford Expedition	78	84	108	57	65
Ford Expedition 4WD	86	102	119	56	60
GMC Acadia	63	96	74	66	62	81
GMC Acadia 4WD	70	108	85	62	51	85
GMC Yukon	67	116	108	64	53	92
GMC Yukon 4WD	83	126	113	57	44	87
GMC Yukon hybrid 4WD	74		83
Nissan Armada	88	109	112	93	91	89
Nissan Armada 4WD	89	102	119	83	79
Toyota Sequoia	87	123	89
Toyota Sequoia 4WD	105	131	226	54
Volkswagen Touareg 4WD	99		116

Scale
Substantially better
Better than average
Average
Worse than average
Substantially worse

Pastore Court of Appeal Decision Reinforces a Broader Interpretation of Catastrophic Impairment

The Court of Appeal for Ontario recently released its decision in Pastore v. Aviva, allowing the appeal and restoring the Director’s Delegate’s order.

In Pastore, the claimant was involved in a car accident back on November 16, 2002.  She suffered a fractured left ankle.  Her injury didn’t heal properly, requiring several surgeries over the next five years, and right knee replacement when the ankle pain led to a change in her gait.  She applied for a catastrophic impairment determination in 2005.  Catastrophic impairment was supported by a DAC assessment but rejected by the insurer.  The issue in dispute was whether the claimant was catastrophically impaired due to a mental or behavioural disorder, under subsection 2(1.1)(g) of the SABS.

The arbitrator accepted that a Class 4 impairment (based on the AMA Guides to the Evaluation of Permanent Impairment, 4th edition) in one area of function was sufficient to meet the definition of “catastrophic impairment”.  This was the only area of function she reviewed in detail.  On this basis, she concluded that Pastore had suffered a catastrophic impairment. On appeal, the Director’s Delegate agreed with the arbitrator that a Class 4 (marked) impairment was required in only one of four areas of functioning to establish a catastrophic impairment.

The Divisional Court disagreed with FSCO and granted the insurer’s application for judicial review. The Court found that the Director’s Delegate had failed to properly appreciate the effect of incorporating the Guides into the SABS - that the Guides must be treated as part of the legislative scheme.  Justice Matlow disagreed in part.  He found there was nothing in the Guides which required more than a single finding and there was no requirement to evaluate each of the four areas of functional limitations before a "marked" impairment can be found to qualify.  He held that the Guides are not “part of the legislation” and are only guidelines.

This is just another in a series of decisions on the impact of psychological impairment on the determination of catastrophic impairment under the SABS.  In Kusnierz v. Economical Mutual Insurance Company, the Ontario Court of Appeal confirmed last year that psychological impairments should be combined with physical impairments to determine whether a person injured in a car accident has sustained a “catastrophic impairment.”
Prior to that the Ontario Superior Court of Justice’s 2004 decision in Desbiens v. Mordini was the leading trial decision regarding catastrophic impairment.  

The Superintendent's Report on the Definition of Catastrophic Impairment in the SABS attempts to mitigate some of the decisions by recommending the elimination of psychological impairments from the SABS definition and replacing them with psychiatric impairments.  As well the Superintendent's report recommends that physical impairments and psychological impairments not be combined. The court decisions reinforce my opinion that a regulatory prohibition on combining psychological and physical impairments will ultimately fail. The courts will find ways around it.  Instead a better solution might be to develop a more rationale model that acknowledges that psychological impairments can push physical impairments over the catastrophic threshold but that is less susceptible to manipulation.  The WSIB has been combining psychological and physical impairments for quite a number of years.

The Superintendent's report was submitted in December of last year but has not been acted upon.  The Minister of Finance conducted a stakeholder consultation over the summer. As well, stakeholder discussed the report during presentations to two Standing Committees of the Legislature during May and July of this year.


 the Pastore Divisional Court decision is here..

the Pastore Court of Appeal decision is here... 

2012 Canadian Auto Insurance Statisfaction Study

This week the J.D. Power and Associates released its 2012 Canadian Auto Insurance Satisfaction Study^SM.  The study, now in its fifth year, measures insurance customers' experiences with their primary insurer. Customer satisfaction is measured across five factors: interaction; price; policy offerings; billing and payment; and claims. Insurers are ranked in three regions: Western (British Columbia; Alberta; Saskatchewan; and Manitoba); Ontario/Atlantic; and Quebec.

Customer satisfaction in the Ontario/Atlantic region has increased by 11 points from 2011, primarily due to an increase in satisfaction with insurer policy offerings (+17 points). Policy offering satisfaction is most often influenced by the quality of discounts offered. In fact, 60 per cent of customers in this region received multiple (three or more) discounts on their policy, a six-percentage-point increase from 2011. Nearly 30 per cent (29%) of customers reported an insurer-initiated rate increase in 2012, representing a four-percentage-point decrease from 2011.

Obviously a big factor has been more stable premiums which continually has a significant impact on overall customer satisfaction.  However, J.D. Power and Associates pointed out that there was increases in satisfaction in nearly every factor across the board.

 Below is customer satisfaction in Atlantic/Ontario region broken down by insurer.

Are Non-Driving Rating Factors Unfairly Weighted in Auto Rates?

Rating factors that have little to do with an individual’s driving abilities appear to have considerable bearing on the price consumers pay for auto insurance, a report from Consumer Federation of America (CFA) asserts.

CFA also says the rating factors in question discriminate against low- and middle-income drivers.

The CFA released its third report this year examining the affordability of auto insurance and its impact on moderate income individuals’ mobility and access to better paying jobs.

In this latest report, the consumer-advocacy group examined how non-driving rating factors can affect the cost of auto insurance, increasing the price of coverage by as much as 50 percent or more depending upon location and insurer.

The report examined the price of minimum-liability insurance for a 30-year old woman working as a bank teller, with a clean driving record, high school education, and insurance coverage that lapsed 15 days ago. Quotes were sought from the websites of the five largest U.S. insurers in Baltimore, Miami, Louisville, Houston and Los Angeles. A quote was obtained for the individual under the standard information provided. Then new quotes were obtained adding five different rating factors:
• Married.
• Homeowner.
• Professional.
• No break in coverage.
• Higher-income zip code.

With each factor, the price of insurance declined, and when all five rating factors were added to the quote, the change in price was as high as 73 percent.

In Ontario, only marital status and some lapses in coverage are rating factors.  As well, territorial rating is permissible but not at the postal code level.

The report also includes a survey of 1010 adult Americans performed by CFA and ORC International asking what they thought about the use of specific factors to set auto insurance premiums (see chart below).

In response, Willem Rijksen, a spokesman for the American Insurance Association points out that the use of these factors, such as credit-based insurance scoring, location of the vehicle, driver experience, and traffic citations, helps insurers to more accurately price risk.  Neil Aldridge, senior vice president for state and policy affair for the  National Association of Mutual Insurance Companies commented that rating factors should not be “regulated by popularity,” adding, that “is not exactly a precise way to measure risk.”

read more here...

CFA report is here...

Retroactive Claims For Attendant Care

Section 42(5) of the SABS states:

An insurer may, but is not required to, pay an expense incurred before an assessment of attendant care needs that complies with this section is submitted to the insurer. 

A similar provision (39(3)) can be found in the SABS that applies prior to September 1, 2010.  Seems pretty clear.  An insurer would not have to pay for attendant care expenses before a Form 1 is submitted by a claimant. 

Well it seems that might not be true according to T.N. v. The Personal (FSCO A6-0003999, July 26, 2012) which deals with s. 39(3) of the Old SABS.

The provisions of s. 39 (Old SABS) clearly indicated that an insurer was only obliged to begin payment within 10 business days after receipt of the Form 1. Similarly, the insurer’s right to assess attendant care needs and correspondingly adjust payments appeared to arise only after receipt of the Form 1. Pending receipt of the Form 1, the insurer had no explicit right to assess the claimant's attendant care needs.

Arbitrator Bayefsky found that s. 39(3) did not displace the insurer’s obligation to pay “reasonable and necessary Attendant Care Benefits” determined in accordance with a submitted Form 1. While s. 39(3) provided that an insurer was not required to pay Attendant Care Benefits before the Form 1 was submitted, this did not, in Arbitrator Bayefsky’s view, mean that a claimant forfeited their right to attendant care benefits prior to submitting a Form 1.

These provisions were included in the SABS specifically to prevent retroactive claims for attendant care in an effort to contain fraud in the system. An insurer is at a considerable disadvantage when presented with a claim for 6 months of retroactive attendant care benefits during which it may have limited or no information as to the extent of the attendant care needs or “expenses incurred”.

Insurers can expect for retroactive attendant care benefit claims which will likely be used as leverage for settlements. The best advice for containing exposure is to proactively request submission of For 1s where the claim does not involve a minor injury.