AB.Auto

Question 1

Identify the goals of Alberta Auto Insurance Reform (7)

Answer 1

1. Private Sector Delivery model
2. Claims handling - efficient and effective
3. Medical Benefits: make sure that they are appropriate
4. Income replacement: easier access
5. Reduce costs
6. Stabilize rates - should be affordable for all Albertans
7. Sustainability - the needs of insureds, “traffic-injured” persons, and insurance providers needs to be met

Question 2

Briefly describe the findings of the Alberta auto insurance committee (5)

Answer 2

1. High premiums were caused by increasing bodily injury costs (specifically non-pecuniary awards for pain & suffering due to the tort system)
2. No mechanisms existed to control these BI costs
3. Injury compensation was often either too high or too low
4. Health outcomes are worse under the tort-system (and hybrid tort/no-fault system)
5. Health outcomes improved when tort systems were eliminated and replaced with full no-fault models

Question 3

Name 2 provinces that have a pure no-fault system

Answer 3

Manitoba and Quebec

Question 4

Identify the recommendations of the Alberta auto insurance committee

Answer 4

1. Replace existing hybrid tort/no-fault model with a pure no-fault model
2. Introduce a “continuum of care model” to promote appropriate medical evaluation, assessment and treatment

Question 5

Why might a pure no-fault system be cheaper and deliver more effective medical care vs a tort system?

Answer 5

Benefits can be delivered without having to prove who is at fault:
- Less money to lawyers
- Quicker access to medical care

Question 6

Describe how Alberta’s new auto insurance is recommended to work

Answer 6

Create a Traffic Injury Regulator, including a Board and Tribunal to oversee the 4 arms of accident care compensation:
1. Claims administration and support
2. Medical experts to evaluate injuries
3. Claims assessment panels for income replacement
4. A reconstuted version of AIRB (Automobile Insurance Rate Board)

Question 7

How might the “4 arms” of Alberta’s Traffic Injury Regulator be funded?

Answer 7

• Mainly by Alberta auto insurers in proportion to their market share
• A smaller contribution by the Alberta government (from savings generated by the new system)

Question 8

Assess the likelihood of a successful legal challenge if Alberta’s auto reforms are implemented

Answer 8

A legal challenge would probably not be successful for the following reasons:
- MB and QC already have a pure no-fault system
- Such systems have been judged to be within the scope of provincial legislative authority
- A challenge under Canada’s Charter of Rights & Freedoms has no merit because all drivers are treated equally
- Morrow v Zhang upheld the minor injury cap so a future Charter challenge would likely not succeed either

Question 9

Identify regulatory reforms being considered for Alberta auto insurance

Answer 9

• Switch from “prior approval” to “file and use”
• Make winter tires mandatory from October to March

Question 10

AB vs ON: Identify problems that Alberta and Ontario auto insurance have in common (2)

Answer 10

• Rising cost of auto insurance (largely BI costs)
• Inefficient delivery of medical care

Question 11

AB vs ON: What has been identified as a primary cause of the problems in AB & ON auto insurance

Answer 11

Both systems have a tort component which causes:
- Delays in medical care
- Diversion of resources to the legal system

Question 12

AB vs ON: Identify a similarity in recommendations to address these problems in AB & ON auto insurance

Answer 12

Greater focus on timely medical care

Question 13

AB vs ON: Identify a difference in recommendations to address these problems in AB & ON auto insurance

Answer 13

AB: convert to a pure no-fault system

ON: keep hybrid tort/no-fault system (but fix structural flaws by appointing an arms-length regulator with powers to enact policies & procedures)