A - Marshall

Question 1

MARSHALL

2 component benefits of Ontario’s mandatory auto insurance system

Answer 1

1. No fault (AB)
   
   • Provide benefits regardless of fault
2. Tort (BI)
   
   • Allows you to sue the at-fault driver

Question 2

MARSHALL

For ON auto insurance, benefits are fair but are not delivered fairly.

4 CAUSES of unfair delivery of auto insurance benefits in Ontario.

Answer 2

1. COST CONTROL AT THE EXPENSE OF CARE
   
   • Insurers emphasize cost control instead of care
   • But then victims do not recover and final costs are higher not lower
2. LAWYERS
   
   • Lawyers’ contingency fees are a percent of the settlement
   • So lawyers seek higher settlements, not better care for victims
3. ENTITLEMENTS
   
   • Victims seek to maximize entitlements versus addressing own care needs
4. VOLUME
   
   • Providers are paid on volume of treatment not results

Question 3

MARSHALL

5 actions items in Ontario’s five-part ACTION PLAN for addressing the unfair delivery of benefits.

Answer 3

1. STRUCTURAL FLAWS
   
   • Fix structural flaws by appointing an arms-length regulator with powers to enact policies and procedures
2. CAT INJURIES
   
   • Change compensation system for cat injuries because lawyers are taking too big of a chunk
3. CARE NOT CASH APPROACH
   
   • Focus on timely, appropriate medical care, not cash payouts
4. LAWYERS
   
   • Make contingency fees transparent (and simplify benefits so there is less need to hire lawyers)
5. SMART REGULATION
   
   • Allow insurers more regulatory freedom to compete on price and service

Question 4

MARSHALL

What is the opportunity gap in Ontario Auto Insurance?

What is the value gap in ON Auto Insurance?

Answer 4

• Opportunity for ON Auto Premium much higher than canadian avg. Could be much lower without impacting quality
• The VALUE of medical care could be better if there were more focus on active medical management

Question 5

MARSHALL

Similarities and differences in BC and ON auto products.

Answer 5

• Similarities
  
  • Both are mandatory
  • Both include tort & no-fault benefits
• Differences
  
  • BC
    
    • Public
    • Emphasizes the tort system (litigation)
  • ON
    
    • Private
    • Has stronger no-fault benefits (AccBen)

Question 6

MARSHALL

Similarities and differences in PROBLEMS with BC and ON auto insurance.

Answer 6

• Similarities
  
  • Severity is increasing for minor injuries
  • Legal costs are too high
• Differences
  
  • BC
    
    • Frequency is increasing
    • Severity of minor injuries is increasing
  • ON
    
    • Frequency is decreasing
    • Severity of all injuries is increasing

Question 7

MARSHALL

Similarities and differences in PROPOSED SOLUTIONS regarding BC and ON auto insurance.

Answer 7

• Similarities
  
  • Shift focus from cash to care
  • Reduce legal costs in both
• Difference
  
  • BC
    
    • Reform emphasizes auto product redesign
    • Increase road safety because frequency is increasing
  • ON
    
    • Reform emphasizes structural changes in regulatory system
    • Frequency is a lesser issue

Question 8

MARSHALL

BC v ON: Which is the better auto insurance system : public or private?

Answer 8

Neither!

The goals of SUSTAINABILITY and AFFORDABILITY can be met by either a properly designed product or regulatory system.