Bill 90, Automobile Insurance Consumer Protection Act, 1998

Sampson, Hon. Rob Minister Without Portfolio

Versions

B090_E

Bill 90 1998

An Act to increase fairness and consumer protection while maintaining a balanced and stable automobile insurance plan in Ontario

Her Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Ontario, enacts as follows:

PART I

AMENDMENTS TO THE INSURANCE ACT

1. (1) Subsection 121 (1) of the Insurance Act, as amended by the Statutes of Ontario, 1993, chapter 10, section 12, 1994, chapter 11, section 338, 1996, chapter 21, section 14, 1997, chapter 19, section 10 and 1997, chapter 28, section 107, is further amended by adding the following paragraph:

23.2.1 defining "income continuation benefit plan" and "loss of earning capacity" for the purpose of this Act or any provision of this Act.

(2) Paragraph 23.4 of subsection 121 (1) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 14, is amended by striking out "subsection 267.5 (4)" in the second line and substituting "clause 267.5 (4) (a)".

2. Subsection 230 (2) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 18, is repealed and the following substituted:

Information from agents

(2) An agent shall inform an applicant for automobile insurance that the agent only represents one insurer.

Request for written information

(3) The broker or agent shall provide the information referred to in subsection (1) or (2) in writing if the applicant so requests.

3. Section 267.4 of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29, is amended by adding the following subsection:

Application of amendments

(2) Subsection (1) shall not be interpreted as requiring an amendment made to sections 267.5 to 267.11 to apply in respect of the use or operation, before the amendment came into force, of an automobile.

4. (1) Subsection 267.5 (4) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29, is repealed and the following substituted:

Exception

(4) Subsection (3) does not apply if,

(a) the injured person has sustained a catastrophic impairment, as defined in the regulations, arising directly or indirectly from the use or operation of the automobile; or

(b) the injured person was less than 16 years of age at the time of the incident and has sustained permanent serious impairment of an important physical, mental or psychological function arising directly or indirectly from the use or operation of the automobile.

(2) Paragraph 3 of subsection 267.5 (7) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29, is amended by inserting at the beginning "Subject to subsections (8) and (8.1)".

(3) Subsection 267.5 (8) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29, is repealed and the following substituted:

Application of subpara. (7) 3 i

(8) Subparagraph i of paragraph 3 of subsection (7) does not apply if the amount of damages for non-pecuniary loss other than damages for non-pecuniary loss under clause 61 (2) (e) of the Family Law Act would exceed $100,000 in the absence of that subparagraph.

Application of subpara. (7) 3 ii

(8.1) Subparagraph ii of paragraph 3 of subsection (7) does not apply if the amount of damages for non-pecuniary loss under clause 61 (2) (e) of the Family Law Act would exceed $50,000 in the absence of that subparagraph.

Application of subss. (7)-(8.1)

(8.2) Subsections (7), (8) and (8.1) apply in respect of each person who is entitled to damages for non-pecuniary loss.

(4) Subsection 267.5 (11) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29, is repealed and the following substituted:

Motion to determine if threshold met; health care expenses

(11) In an action for loss or damage from bodily injury or death arising directly or indirectly from the use or operation of an automobile, a judge shall determine, on motion made before trial with the consent of the parties or in accordance with an order of a judge who conducts a pre-trial conference,

(a) for the purpose of clause (4) (a), whether the injured person has sustained a catastrophic impairment arising directly or indirectly from the use or operation of the automobile; or

(b) for the purpose of clause (4) (b), whether the injured person has sustained permanent serious impairment of an important physical, mental or psychological function arising directly or indirectly from the use or operation of the automobile.

(5) Subsection 267.5 (14) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29, is repealed and the following substituted:

Determination at trial; health care expenses

(14) If no motion is made under subsection (11), the trial judge shall determine,

(a) for the purpose of clause (4) (a), whether the injured person has sustained a catastrophic impairment arising directly or indirectly from the use or operation of the automobile; or

5. Subsection 267.8 (19) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 29 and amended by 1997, chapter 16, section 9, is repealed and the following substituted:

Workplace Safety and Insurance Board

(19) Subsection (17) and clause 258.3 (1) (a) do not apply with respect to a subrogated action brought under subsection 30 (10) or (11) of the Workplace Safety and Insurance Act, 1997.

6. The Act is amended by adding the following section:

Winding up orders

268.0.1 (1) The making of a winding-up order in respect of an insurer under the Winding-up and Restructuring Act (Canada) shall not be taken into account in determining under section 268 whether the insurer is liable to pay statutory accident benefits.

Motor Vehicle Accident Claims Fund

(2) If an insurer in respect of which a winding-up order has been made under the Winding-up and Restructuring Act (Canada) is liable to pay statutory accident benefits, the Motor Vehicle Accident Claims Fund shall pay the benefits, including any benefits that were outstanding at the time the order was made.

7. Subsection 282 (11.2) of the Act, as enacted by the Statutes of Ontario, 1993, chapter 10, section 33, is repealed.

8. Subsection 283 (7) of the Act, as amended by the Statutes of Ontario, 1993, chapter 10, section 34 and 1996, chapter 21, section 39, is further amended by striking out "(11.2)" in the amendment of 1993 and substituting "(11.1)".

9. Subsection 284 (5) of the Act, as re-enacted by the Statutes of Ontario, 1996, chapter 21, section 40, is amended by striking out "(11) to (11.2)" in the first line and substituting "(11) and (11.1)".

10. Subsection 412 (2) of the Act, as re-enacted by the Statutes of Ontario, 1996, chapter 21, section 45, is amended by striking out "Commissioner" in the first line and substituting "Superintendent".

11. (1) Subsection 413 (3.4.1) of the Act, as enacted by the Statutes of Ontario, 1997, chapter 28, section 128, is repealed and the following substituted:

Hearing by Tribunal

(3.4.1) If an insurer appeals the Superintendent's decision within the 15-day period, the Tribunal shall hold a hearing.

(2) Section 413 of the Act, as amended by the Statutes of Ontario, 1993, chapter 10, section 40, 1996, chapter 21, section 46 and 1997, chapter 28, section 128, is further amended by adding the following subsection:

Powers of the Superintendent, etc.

(6) For the purposes of this section, subsections 410 (4), 412 (6) and (7) and 412.1 (2), (3) and (4) apply, with necessary modifications, as if the insurer had made an application under section 410.

12. Subsection 417.1 (1) of the Act, as enacted by the Statutes of Ontario, 1993, chapter 10, section 46 and amended by 1997, chapter 28, section 134, is further amended by striking out "every three years" in the second line and substituting "every two years".

PART II

AMENDMENTS TO OTHER ACTS

Compulsory Automobile Insurance Act

13. (1) The Compulsory Automobile Insurance Act is amended by adding the following section:

Evidence in certain prosecutions

13.2 (1) This section applies with respect to prosecutions for offences under sections 2, 13 and 13.1.

Affidavit

(2) An affidavit sworn by a person who is identified in the affidavit as an officer or employee of an insurer is admissible in evidence as proof, in the absence of evidence to the contrary, that the motor vehicle identified in the affidavit was or was not insured by the insurer on the date or dates specified in the affidavit. The affidavit is admissible without proof of the signature of the person who appears to have signed it.

Notice by prosecutor

(3) If the prosecutor intends to introduce the affidavit at trial, the prosecutor shall give the following documents to the defendant at least 15 days before the beginning of the trial:

1. A copy of the affidavit.

2. Notice that the prosecutor intends to produce the affidavit in evidence at the trial.

3. Notice of the requirements described in subsection (5).

Same

(4) Unless the court orders otherwise, the affidavit shall not be received in evidence if the prosecutor fails to comply with subsection (3).

Notice by defendant

(5) If the defendant intends to cross-examine the deponent of the affidavit at trial, the defendant shall give written notice to the prosecutor at least seven days before the trial begins, and the prosecutor shall arrange for the deponent to attend at the trial.

(2) Clause 15 (1) (c.2) of the Act, as enacted by the Statutes of Ontario, 1996, chapter 21, section 50, is amended by inserting "or an agent of the Minister of Transportation" after "Minister of Transportation" in the second and third lines.

Highway Traffic Act

14. Subsection 7 (24) of the Highway Traffic Act, as amended by the Statutes of Ontario, 1994, chapter 27, section 138, is further amended by adding the following clause:

(p) requiring insurers within the meaning of the Insurance Act or any other class of persons to provide the Ministry with information relating to damage to or the condition of vehicles, including prescribing the classes of persons to which the requirements apply, prescribing the circumstances in which the information must be provided, prescribing the information to be provided and prescribing the manner in which the information must be provided.

Motor Vehicle Accident Claims Act

15. (1) Subsection 3 (1) of the Motor Vehicle Accident Claims Act is amended,

(a) by striking out "Superintendent" in the first line and substituting "Director"\; and

(b) by striking out "Superintendent" in the second line and in the fourth line of clause (a) and substituting in each case "Director".

(2) Section 4 of the Act, as amended by the Statutes of Ontario, 1993, chapter 10, section 54, 1997, chapter 19, section 16 and 1997, chapter 28, section 188, is further amended by adding the following subsection:

Minister may require information

(4.1) The Minister may require a person who has a cause of action against the Director or against the owner or driver of a motor vehicle that may be uninsured to,

(a) provide the Minister with the information prescribed by the regulations within the time period prescribed by the regulations;

(b) at the Minister's expense, undergo examinations by one or more persons selected by the Minister who are members of Colleges within the meaning of the Regulated Health Professions Act, 1991\;

(c) provide the Minister with a statutory declaration describing the circumstances surrounding the incident and the nature of the claim being made;

(d) provide the Minister with evidence of the person's identity;

(e) provide the Minister with a copy of any notice and information provided under subsection 258.3 (1) of the Insurance Act.

(3) Section 5 of the Act is amended,

(a) by striking out "prescribed by the Minister" in the fourth-last line of subsection (1) and substituting "approved by the Director"\; and

(b) by striking out "prescribed by the Minister" in the second and third lines of clause (3) (b) and substituting "approved by the Director".

(4) Subsection 6 (1) of the Act is repealed and the following substituted:

Statutory accident benefits

(1) Any person who has recourse against the Fund for statutory accident benefits under section 268 of the Insurance Act may make application, in a form approved by the Director, for payment out of the Fund of the benefits.

(5) Section 6 of the Act, as amended by the Statutes of Ontario, 1993, chapter 10, section 54 and 1993, chapter 27, Schedule, is further amended by adding the following subsection:

Accidents outside Ontario

(3.1) Subject to section 6.1, no payment out of the Fund is required in respect of statutory accident benefits if the accident from which the entitlement to statutory accident benefits arose occurred outside Ontario.

(6) The Act is amended by adding the following section:

Benefits payable as a result of winding-up order

6.1 (1) If a winding-up order is made in respect of an insurer under the Winding-up and Restructuring Act (Canada) and the Fund is liable to pay statutory accident benefits under section 268.0.1 of the Insurance Act, any person entitled to the benefits may make application, in a form approved by the Director, for payment out of the Fund of the benefits.

Rights and obligations of Fund

(2) If the Fund receives an application under subsection (1),

(a) it has the same rights and obligations with respect to the statutory accident benefits as the insurer that was subject to the winding-up order; and

(b) the person entitled to the statutory accident benefits shall be deemed to have assigned to the Fund all of his or her rights against the insurer that was subject to the winding-up order.

Payment

(3) The Minister shall make payment out of the Fund of the amounts owing to a person who makes an application under subsection (1).

Application of subs. 23 (6)

(4) Subsection 23 (6) does not apply to payments under this section.

No need for designation

(5) This section applies whether or not the insurer that was subject to the winding-up order is a designated insurer.

(7) Subsection 7 (1) of the Act, as amended by the Statutes of Ontario, 1993, chapter 27, Schedule, is further amended by striking out "prescribed by the Lieutenant Governor in Council" in the ninth and tenth lines and substituting "approved by the Director".

(8) Sections 12, 13, 14, 15, 16, 17 and 18 of the Act are amended by striking out "Superintendent" wherever it appears and substituting in each case "Director".

(9) Section 19 of the Act, as amended by the Statutes of Ontario, 1993, chapter 27, Schedule, is further amended by striking out "Superintendent" in the second line and substituting "Director".

(10) Subsection 20 (1) of the Act, as amended by the Statutes of Ontario, 1993, chapter 27, Schedule, is further amended,

(a) by inserting "or the Director" after "Superintendent" in the second line; and

(b) by striking out "Superintendent" in the third line and substituting "Director".

(11) Clause 20 (2) (a) of the Act is amended by inserting "or the Director" after "Superintendent" in the fourth line and in the fifth and sixth lines.

(12) Section 21 and subsections 22 (1) and 23 (4) of the Act are amended by striking out "Superintendent" wherever it appears and substituting in each case "Director".

(13) Section 25 of the Act is repealed and the following substituted:

Interpretation

25. (1) For the purpose of this section, residence shall be determined as of the date of the motor vehicle accident as a result of which the payment out of the Fund is claimed.

Payments to non-residents

(2) The Minister shall not pay out of the Fund any amount in favour of a person who ordinarily resides in a jurisdiction outside Ontario unless that jurisdiction provides persons who ordinarily reside in Ontario with recourse of a substantially similar character to that provided by this Act.

Same

(3) The total amount paid out of the Fund in favour of a person who ordinarily resides in a jurisdiction outside Ontario shall not exceed the amount that would be payable in equivalent circumstances under the law of that jurisdiction to a person who ordinarily resides in Ontario.

Application

(4) This section does not apply to payments made under section 6.1.

(14) The Act is amended by adding the following sections:

Offences

29. (1) Every person is guilty of an offence who,

(a) knowingly makes a false or misleading statement or representation to the Fund or the Minister in connection with the person's entitlement to a benefit or payment under this Act;

(b) wilfully fails to inform the Fund or the Minister of a material change in circumstances in connection with the person's entitlement to a benefit or payment under this Act within 14 days of the material change; or

(c) knowingly makes a false or misleading statement or representation in order to obtain payment from the Fund for goods or services.

Penalty

(2) On conviction for an offence under this section, the person convicted is liable on a first conviction to a fine of not more than $100,000 and on each subsequent conviction to a fine of not more than $200,000.

Regulations

30. The Minister may make regulations prescribing anything that subsection 4 (4.1) refers to as being prescribed by the regulations.

Transition

(15) Despite subsections (8), (9) and (12) of this section, the references in sections 14, 16, 17, 18, 19 and 21 and in subsections 22 (1) and 23 (4) of the Act to "Director" shall be deemed to read "Superintendent" in respect of any action commenced before the day subsections (8), (9) and (12) of this section come into force.

PART III

COMMENCEMENT AND SHORT TITLE

Commencement

16. (1) Subject to subsection (2), this Act comes into force on a day to be named by proclamation of the Lieutenant Governor.

Same

(2) Section 8 shall be deemed to have come into force on July 1, 1998.

Short title

17. The short title of this Act is the Automobile Insurance Consumer Protection Act, 1998.

EXPLANATORY NOTE

The Bill amends the Insurance Act, the Compulsory Automobile Insurance Act, the Highway Traffic Act and the Motor Vehicle Accident Claims Act.

The amendments to the Insurance Act include the following:

1. Section 121 of the Act is amended to permit the expressions "income continuation benefit plan" and "loss of earning capacity" to be defined by regulation.

2. Section 230 of the Act is amended to require insurance agents to inform applicants for automobile insurance that they only represent one insurer.

3. Section 267.5 of the Act is amended to enable people under age 16 who are injured in automobile accidents to sue for health care expenses if they sustain permanent serious impairment of an important physical, mental or psychological function.

4. The deductible amounts set out in section 267.5 of the Act that apply to awards for non-pecuniary loss arising from automobile accidents are eliminated in the case of damages for non-pecuniary loss that exceed $100,000 (or $50,000, in the case of damages for non-pecuniary loss under the Family Law Act).

5. Subsection 267.8 (19) is amended to provide that the Workplace Safety and Insurance Board's right of subrogation under the Workplace Safety and Insurance Act, 1997 will apply to automobile accident claims.

6. A new section 268.0.1 is added to the Act to require the Motor Vehicle Accident Claims Fund to pay statutory accident benefits owing by an insurer that is subject to a winding-up order under the Winding-up and Restructuring Act (Canada).

7. Subsection 417.1 (1) of the Act is amended to require a review of the Rate Determination and Risk Classification regulation every two years, the same time period that applies to reviews of the Statutory Accident Benefits regulation.

The Compulsory Automobile Insurance Act is amended to allow insurers to prepare an affidavit, instead of attending court, in order to give evidence about whether or not a motor vehicle is insured. The Act is also amended to clarify that the regulations that require automobile insurers to provide the Minister of Transportation with prescribed information may also require the information to be provided to agents of the Minister.

The Highway Traffic Act is amended to permit regulations requiring insurers and other persons to provide the Ministry of Transportation with information relating to damage to or the condition of vehicles.

The Motor Vehicle Accident Claims Act is amended to make clear that the Motor Vehicle Accident Claims Fund is not required to pay statutory accident benefits in respect of an automobile accident that occurs outside Ontario, to provide a mechanism for the payment of statutory accident benefits owing by an insurer that is subject to a winding-up order under the Winding-up and Restructuring Act (Canada), to clarify that any amount payable out of the Motor Vehicle Accident Claims Fund to a non-resident will not exceed the amount that would be payable in equivalent circumstances to an Ontario resident under the law of the non-resident's jurisdiction, and to create offences for submitting false or misleading information to the Fund. Other amendments to the Act provide the Motor Vehicle Accident Claims Fund with powers comparable to those of insurance companies with respect to notice and disclosure of information and references in the Act to the "Superintendent" are replaced with references to the "Director". Copyright © 1998

Office of the Legislative Assembly of Ontario

Toronto, Ontario, Canada.