Enhanced FSCO would help fight auto insurance fraud

“We are considering enhanced authorities for FSCO — to authorize it to regulate the business practices of health care treatment and assessment facilities; to permit it to require information and investigate market conduct with respect to a broader range of participants in the business of auto insurance; and to assess whether the definition of unfair or deceptive practices should be expanded and whether the penalties for their breach are adequate deterrents,” it says.

As a significant number of the recommendations under consideration are directed to FSCO, the report also notes that these changes would carry significant resource implications. “It is necessary that FSCO be provided with the requisite staff and expertise to assume these new regulatory activities. In this regard we suggest that the government consider allowing FSCO to hire new staff as necessary, particularly since the insurance sector would be absorbing the additional costs associated with new resources,” it says.

The report also says that the task force is considering whether to recommend that existing civil immunity provisions in the Insurance Act be broadened to protect insurers from civil suits for reporting to regulators, or the police, when they have suspicions of fraudulent behaviour by their own policyholders.

Additionally, it is considering regulating the towing industry; mandatory disclosure by insurance companies about how they select and supervise their preferred service providers; and, developing a consumer engagement and education strategy.

“Overall, the changes we are considering should result in net savings to the system from a reduction in the cost of fraudulent insurance claims. Those practitioners and clinic operators who are the most competent and scrupulous would enjoy a larger share of the available business. And injury victims would receive better care,” it says.

The final recommendations are due in the fall of 2012.