Insurance Changes in Ontario Budget

Auto Insurance

The Government of Ontario announced in the 2015 budget that it intends to amend the Insurance Act and its regulations as follows:

  • to change the standard deductible for comprehensive coverage to $500 from $300;
  • to change the standard benefit level for medical and rehabilitation benefits to $65,000 (from $50,000) and include attendant care services under this benefit limit, with an option to increase that coverage up to $1 million;
  • to include attendant care services with the $1 million medical and rehabilitation benefit for catastrophic impairments, and to provide the option for additional coverage for $2 million in total coverage;
  • to reduce the standard duration of medical and rehabilitation benefits from 10 years to 5 years for all claimants except children;
  • to eliminate the 6-month waiting period for non-earner benefits and limit the duration of non-earner benefits to 2 years after the accident;
  • to require goods and services not explicitly listed in the Statutory Accident Benefits Schedule (SABS) to be “essential” and agreed on by the insurer;
  • to amend the "catastrophic impairment" definition to reflect current medical information;
  • to adjust the deductible on court awards for non-pecuniary damages to reflect inflation and link this deductible to future changes in inflation;
  • to adjust the dollar thresholds beyond which the tort deductible does not apply to reflect inflation and link these thresholds to future changes in inflation; and
  • to allow for the tort deductible to be taken into account when determining a party’s entitlement to costs in an action for damages from bodily injury or death arising from an automobile accident.

In addition, the Government intends to implement the following changes to auto insurance:

  • the maximum interest rate charged on monthly auto insurance premium payments will be decreased to 1.3% from 3%;
  • premium increases for minor at-fault accidents that meet certain criteria will be prohibited (such as no reported injuries); and
  • all insurers will be required to offer a discount for the use of winter tires.

Further to the passing in November 2014 of the Fighting Fraud and Reducing Automobile Insurance Rates Act, 2014, responsibility for the auto insurance Dispute Resolution System (DRS) will be moved to the Ministry of the Attorney General's Licence Appeal Tribunal. The DRS will begin accepting disputes on April 1, 2016.

Modernization of Insurance System

The Government of Ontario intends to modernize insurance regulation by repealing outdated legislation such as the Marine Insurance Act.

Review of Financial Services Regulators

The Government of Ontario will review the mandate of key financial services regulators, including the Financial Services Commission of Ontario and the Financial Services Tribunal. It has appointed a three-person panel which will be holding consultations in the spring of 2015. This panel is expected to deliver recommendations by early winter 2016. The review will focus on "ensuring that regulatory activities are carried out in the most appropriate and efficient manner, reflecting the complexity of this important sector" and "ensuring that the mandates of each agency remain flexible in a changing environment."

The Government also proposes to make technical changes to the Financial Services Commission of Ontario Act, 1997, and related legislation to improve administrative clarity and effectiveness.