Bill 15: Big Changes Coming to Ontario’s Auto Insurance Industry

On July 15, 2014, Bill 15 was introduced in the Legislative Assembly of Ontario. The stated aims of the bill are to protect Ontario drivers, tackle fraud, and reduce costs and uncertainty within the auto insurance system. If passed, the bill would further the Liberal government’s goal of a 15% reduction in auto insurance rates within the next two years.

While the changes proposed by the bill  may be well intentioned; the implications of the bill are cause for concern for injured individuals and for the rehab community.

One reason for concern  is the transformation of Ontario’s auto insurance dispute resolution system. Under Bill 15, FSCO would no longer oversee the adjudicative process for SABS. Instead, the power would be placed in the hands of the Licensing Appeals Tribunal. Much of the transitional and opting out rules remain largely undefined and the changes also include the removal of the right to sue on all SABS disputes.

A second reason for concern  is the proposed reduction of prejudgment interest rates from 5% to 1.3%. The current rate of 5% was set back in 1990. The proposed reduction is intended to link prejudgment interest to current market conditions. With such a significant reduction, long-standing criticisms of the application of simple interest, as opposed to compound interest on prejudgment calculations becomes all the more valid.

You can read Bill 15 in its entirety by visiting the Legislative Assembly of Ontario’s website. Those opposed to the changes are urged to contact their MPP as soon as possible.

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