Many Ontario drivers have likely never heard of David Marshall. In 2016, the Minister of Finance appointed Mr. Marshall as an advisor to make recommendations on improving Ontario’s auto insurance system. Before his appointment, Marshall was the President and CEO of the Workplace Insurance and Safety Board (WSIB) where he oversaw a major overhaul of their system in order to address the government’s commitment to eliminate the Board’s unfunded liability.
Fourteen months after Marshall’s appointment, in April 2017, his report, Fair Benefits Fairly Delivered: A Review of the Auto Insurance System in Ontario was released. Marshall’s report made 35 recommendations. The following is an overview of his major observations and recommendations.
- The average premium paid by Ontario drivers is higher than in any other province.
- Claims are more expensive and take longer to resolve.
- There are a high proportion of disputed claims requiring independent medical exams (IMEs) and mediation/arbitration.
- Mr. Marshall rejected the option of introducing government-run insurance similar to what exists in Quebec and Manitoba.
- The government should avoid further cuts or reductions to no-fault benefits.
- The regulator should move forward on introducing programs of care (treatment guidelines) for the most common auto accident injuries.
- The regulator should create a network of neutral Independent Examination Centres (IECs) in public hospitals to replace the current system of competing assessments carried out by insurance companies and accident victims’ treatment providers.
- The regulator should establish fees for treatment providers that are comparable to fees paid by other bodies (such as the WSIB).
- The government should ban the settlement of claims for cash except in cases where the accident victim’s injuries are catastrophic.
- The government should restrict or ban lawyers from collecting referrals fees or billing clients based on a percentage of payments received from an insurance company.
- The government should encourage insurance companies to introduce innovative pricing models and do away with the requirement that the regulator approve all rates before they can be used by an insurer.
- A new, independent regulator with its own board of directors for automobile insurance should be established either as part of the new Financial Services Regulatory Authority or a new separate office specifically for auto insurance.
- Insurance companies must change their role from managing costs to delivering care to their customers.
What’s happened to Marshall’s recommendations?
The previous government consulted the public on Marshall’s recommendations in the months following the release of his report. They discovered strong opposition from many groups and organizations except for the insurance industry. As a result, the government was reluctant to move ahead and adopt any of the recommendations. They newly-elected government has made no decisions related to the Marshall’s report, so reforms remain in limbo.
Why is there so much opposition to Marshall’s recommendations?
Some critics have complained that Mr. Marshall is trying to impose the WSIB system (a government-run insurance system) onto a system that is structured very differently. The Ontario auto insurance system is delivered by private insurers and is a mix of no-fault and law suits. Many people have suggested that you can’t superimpose the WSIB model without turning auto insurance into a government-run system.
The strongest opposition was in response to the recommendation to create a network of neutral Independent Evaluation Centres. Many people pointed it that the government created a similar network that operated from 1994 to 2006, which ultimately failed. There was also concern about using resources at our public hospitals to conduct insurance medical exams.
A few stakeholders point out that, although some of Marshall’s recommendations have merit, they are not worth pursuing. Mr. Marshall’s report is too focused on problems in the past. Cost drivers in the system have changed and accident benefits reforms won’t address current critical issues. Insurance companies are filing for rate increases and the most common reasons for higher premiums are distracted driving, the cost of fixing cars (that are more and more loaded with expensive technology) and fraud. None of these issues were considered by David Marshall.
What’s your take on David Marshall’s report? Drop a comment below!