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Ontario introduces act to combat auto insurance fraud

By Antonella Artuso, Queen's Park Bureau Chief

Ontario Finance Minister Charles Sousa. (ANTONELLA ARTUSO/Toronto Sun)

Ontario Finance Minister Charles Sousa. (ANTONELLA ARTUSO/Toronto Sun)

TORONTO - 

The Ontario government is moving to tackle fraud in auto insurance and help reduce rates for drivers, Finance Minister Charles Sousa says.

The Fighting Fraud and Reducing Insurance Rates Act — introduced on Tuesday — is designed to speed up the process to settle disputed claims, limit vehicle storage costs at repair shops and provide stricter oversight of health clinics that charge insurance companies on behalf of accident victims, Sousa said.

“These actions will reduce rates for Ontario drivers,” Sousa promised.

The Kathleen Wynne government — with much prodding from the NDP — committed last August to reducing auto insurance rates by an average of 15% over two years.

Sousa said rates have come down almost 5% and insisted the government is on track to meet its commitment.

Some insurers have dropped rates significantly but it’s not the good drivers who’ve benefited, Progressive Conservative MPP Jeff Yurek said .

“Those are the people that insure the drunk drivers, the drivers that clearly get demerit points, get bad tickets. The NDP and the Liberals have given an extra discount to the bad drivers,” Yurek said. “And the good drivers, from what I’m hearing from my office, their rates are still going up.”

The Ontario government should have moved much faster to bring in an anti-auto fraud squad, and reduce red tape that drives up expenses, he said.

NDP MPP Jagmeet Singh said while Sousa’s bill reduces costs for the industry, there’s no proof that companies will pass on the savings.

“We know that we need to get at the true profits that the insurance companies are making and we know that the profits are there,” Singh said.

The NDP would order the provincial industry regulator to mandate a 15% cut in rates.

Ralph Palumbo, Ontario vice-president of the Insurance Bureau of Canada (IBC), said the proposed changes to the dispute resolution process will shorten the current backlog and accelerate settlements for victims.

An edict to reduce insurance rates by 15% is not “realistic” unless costs in the system are also brought down, he said.

“It’s actually good legislation that should be supported by all parties,” Palumbo said.

The bill will only become law if the NDP or PCs jump on board.

Sousa said his government will also explore a province-wide response to oversight of the towing industry.

 

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