In the 2015 Ontario Budget, the government advised that it was introducing measures to “ensure affordable auto insurance rates.” The Liberals noted that “Ontario’s auto insurance system remains the most generous among Canadian jurisdictions with private marketplace systems” and that the “government’s reforms will continue to ensure the generosity of Ontario’s auto insurance accident benefits.”
On August 26, 2015, the Ontario Legislature filed Bill 251/15, which apparently seeks to achieve the goals set out in the 2015 Budget. For the most part, the amendments apply only to policies issued or renewed on or after June 1, 2016. Existing contracts will remain subject to the current limits until the contract is terminated or renewed.
The most debated/contentious changes are to the catastrophic impairment definitions. There are also significant changes to the non-earner benefits, attendant care benefits, and medical/rehabilitation benefits available under the policy.
What follows is a brief overview of the notable changes and the possible implications the accident benefits and tort industries face with them.
The catastrophic impairment definition post-June 1, 2016 includes new and/or updated definitions and criteria for traumatic brain injuries for adults and children. The new definition adopts a number of medical tools to categorize these impairments, such as reference to a (bedside) text called “Structured Interviews for the Glasgow Outcome Scale and the Extended Glasgow Outcome Scale: Guidelines for Their Use, Journal of Neurotrauma, Volume 15.” The often-controversial and highly problematic Glasgow Coma Scale category is removed.
The new definition also updates criteria for amputations, ambulatory mobility, loss of vision, and mental and behavioural impairments. Of note, Pastore (Pastore v. Aviva Canada Inc., 2012 ONCA 642) has been overruled: future catastrophic status for pure mental and behavioural disorders will require marked impairment in three of four aspects of function, or extreme impairment in one aspect, and the person must be precluded from useful function.
Finally, the Desbiens (Desbiens v. Mordini, 2004 CanLII 41166 Ont. Sup. Ct.) and Kusnierz (Kuznierz v. Economical Mutual Insurance Company, 2011 ONCA 823) methods of “combining” physical and mental impairments now must be done with the American Medical Association’s Guides to the Evaluation of Permanent Impairment, 6th edition (as opposed to the 4th edition). The 6th edition provides a specific methodology for assigning a Whole Person Impairment (WPI) to certain mental and behavioural conditions, which the Legislature has adopted for use in conjunction with the 4th edition’s system for rating other impairments.
For catastrophic impairment claims, a new combined medical/rehabilitation and attendant care benefit of $1 million is available. This reduces the potential amount of recovery under the policy significantly from $1 million for medical/ rehabilitation and $1 million for attendant care.
Under the existing SABS, the non-earner benefits are paid after a six-month waiting period after the accident (onset of disability), up to two years post-accident at a rate of $185/week. If the person continues to meet the disability test after two years, the benefit amount increases to $320/week. Further, the benefit is available to a claimant who is 16 years of age or older.
As of June 1, 2016, the six-month waiting period is replaced by a four-week waiting period, but the benefit is no longer payable after two years. Therefore, the $320/week benefit is eliminated and the insurer’s exposure stops at the two-year mark. Finally, the benefit is not payable to anyone who is under 18 years old.
Medical/Rehabilitation and Attendant Care Benefits
The new changes significantly water down the non-catastrophic medical/rehabilitation and attendant care benefits. A new standard benefit that combines medical/rehabilitation and attendant care limits these claims to $65,000 (instead of $50,000 for medical/rehabilitation and $36,000 for attendant care).
Most importantly, the non-catastrophic medical/rehabilitation benefits are no longer available after five years post- accident (instead of 10 years). Of course this change may not make much difference in the long term considering how difficult it can (or should) be to make $50,000 last over the course of 10 years. Nevertheless, the insurer’s exposure post- accident for these benefits will stop after five years. The new duration does not apply to children under 18 at the time of the accident.
Optional Benefits for Medical/Rehabilitation and Attendant Care
The current optional $100,000 non-catastrophic medical/rehabilitation and $72,000 attendant care benefit have been eliminated. Instead, policyholders can purchase a new combined optional medical/rehabilitation and attendant care benefit of $130,000, which doubles the $65,000 standard limit for these benefits. They can also purchase the existing optional $1 million combined medical/rehabilitation and attendant care benefit that is available currently.
For catastrophic impairments, a new optional benefit of up to an additional $1 million for medical/rehabilitation and attendant care will be available. This optional benefit essentially would restore the catastrophic limits to the default catastrophic limits available today (although the medical/rehabilitation benefits would be combined with the attendant care benefits up to $2 million).
Other Changes — Attendant Care
The amendments have tweaked the attendant care benefit claim by confining entitlement to actual losses when an attendant care provider performs the services at a cost that is less than the actual amount stipulated on the Form 1 (“Assessment of Attendant Care Needs”).
What Does this Mean?
• The next six to 12 months will be very interesting for Ontario auto insurance stakeholders:
• The new changes present a number of challenges for insurers and claimants alike. Insurance adjusters will have to wrap their heads around the several new tools/texts that have been inserted in the new catastrophic definition, which could make responding to these claims difficult for the next while.
• It is not clear whether claimants and insurers will be pushing for full and final settlements of their claims, now that the standard medical/rehabilitation benefits have been capped at five years post accident.
• It will be interesting to see whether motorists start purchasing some of the optional benefits available to protect themselves and their families. Of course doing so would also increase the cost of auto insurance for the insured who wants that protection.
• Tort adjusters should also expect to see more claims with higher exposures now that the standard and catastrophic medical/rehabilitation limits have been significantly reduced. Direct writers/brokers should consider advising their customers to purchase enough liability coverage going forward.
• We are still waiting to see what the government plans to do with the Ontario Protocol for Traffic Management (OPTIMa) Collaboration. (See more at: http://samislaw.com/wp/2015/10/26/update-on-the-mig-protocol-project)
• The Licensing Appeal Tribunal, which currently reviews matters such as fishing and gaming licenses, will have to learn about such things as the Spinal Cord Independence Measure and the Snellen Chart.
One thing we know for sure is that some or all of these changes will be the subject of much debate, at least until the next round of changes occurs.
Daniel Strigberger is a partner with Samis & Company and provides litigation services to many of Canada’s leading property and casualty insurers.