By: Luke Jones, Published on December 11, 2017 10:27 AM, Last Update on December 11, 2017 07:29 AM
Ontario announced it will form the Serious Fraud Office (SFO) in an effort to clamp down on auto insurance fraud. Many industry organizations have praised the decision, although remain cautious about its potential results.
Auto insurance fraud in Ontario is a major concern, costing the industry nearly $2 billion per year. Insurance companies put this cost back on to customers, who have to pay higher premiums. It is one of the core reasons why the province is the most expensive insurance market in Canada.
“In theory and in design it’s the right step,” said Gordon Rasbach, vice president of fraud management at Aviva Canada. “What that translates to in practice remains to be seen.”
The SFO is part of the Ontario Fair Auto Insurance Plan. It is a seven-point program that follows some of the recommendations from the David Marshall Report, Fair Benefits Fairly Delivered: A Review of the Auto Insurance System in Ontario.
Marshall became the advisor or auto insurance and pensions in February 2016. Provide advice and recommendations to governing and regulatory bodies in an effort to reduce auto insurance costs in Ontario, while the role also involves him overseeing the roll out of the Ontario Retirement Pension Plan (ORPP). He worked as a direct advisor to Ontario finance minister Charles Sousa.
Ontario’s new plan was created in collaboration with the Law Society of Upper Canada to bring contingency fees. Insurance Bureau of Canada (IBC) and the Insurance Brokers Association of Ontario (IBAO) both confirmed their commitment to work with the government to implement its plans.