Trial Lawyers Call for Immediate Pause in "reforms"
TORONTO, April 24, 2015 /CNW/ - Ontario Trial Lawyers Association (OTLA) is calling on the Ontario government to hit the pause button on sweeping restrictions to coverage announced in yesterday's provincial budget.
OTLA is recommending a moratorium on any changes pending thorough consultations with all stakeholders in the auto insurance sector on how to fairly and equitably reduce rates and ensure continued fair coverage for victims.
"What's needed right now is a discussion among the many participants in the auto insurance sector: government, the regulator, victims, health care providers, and lawyers as well as the insurance industry itself," said Steve Rastin, President of OTLA. "We think it's possible to meet the rate reduction objectives set out in the budget without reducing coverage for the most seriously injured accident victims," he added.
"The changes announced yesterday are too sweeping and would impose too high a burden on injured accident victims, all to the net benefit of the insurance industry," Rastin cautioned. "There's absolutely no guarantee that drivers will see any of the savings in the form of reduced premiums."
The budget would cut auto insurance coverage in half for Catastrophically Impaired accident victims and limit coverage for less seriously injured accident victims, among other measures.
"There is another way," Rastin said. "We know from the research conducted by York University Professors Lazar and Prisman released just two weeks ago that auto insurers are charging too much and making too much profit. The report showed the way for government to reduce rates fairly without cutting coverage by simply restricting the profit margin to a reasonable level. Insurers pocketed more than $840 million in excess premiums in 2013 alone, and earned profits of 17.5%, well in excess of the regulated benchmark of 11%," he said.
The report found that the profit benchmark set by Ontario's insurance regulator at 11% return on equity should be no more than 5.5% given today's low interest rate environment. Ontario's insurance regulator recently changed the profit cap, allowing insurers to earn even higher profits. The professors concluded that consumers in Ontario may have overpaid for auto insurance by between $3 billion and $4 billion over the period 2001 to 2013.
OTLA reiterated a call for a thorough and truly transparent review that gets to the heart of costs in the insurance industry.
About the Ontario Trial Lawyers Association: Founded in 1991, the Ontario Trial Lawyers Association (OTLA) is an organization of more than 1,600 plaintiff lawyers, law clerks, articling students and law students. Our purpose is to promote access to justice for all Ontarians, preserve and improve the civil justice system, and advocate for the rights of those who have suffered injury and losses as the result of wrongdoing by others, while at the same time advocating strongly for safety initiatives. For more information, visit www.otla.com.
SOURCE Ontario Trial Lawyers Association
For further information: John Karapita, Director of Public Affairs, OTLA, Tel: 289-242-8577