AB.Auto

Question 1

Identify the 7 goals of Alberta auto insurance reform

(Hint: PRAIRIS)

Answer 1

1. Private sector delivery model
2. Reduce or eliminate costs from system
3. Appropriate medical benefits
4. Income replacement - easier access
5. Requiring insurers to be responsive to the needs of their customers and accountable for their claims related decisions and practices
6. Insurance rates - affordability & stability of insurance rates
7. competitive Sustainability of auto insurance industry

Question 2

Briefly describe the 5 findings of the Alberta auto insurance committee

Answer 2

1. High premiums were caused by increasing bodily injury costs (specifically non-pecuniary awards for pain & suffering due to the tort system)
2. No mechanisms existed to control these BI costs
3. Injury compensation was often inadequate
4. Health outcomes are worse under tort systems
5. Health outcomes improved when tort systems were eliminated and replaced with full no-fault models

Question 3

Name 2 provinces that have a pure no-fault system

Answer 3

Manitoba & Quebec

Question 4

Identify the 2 recommendations of the Alberta auto insurance committee

Answer 4

• replace existing hybid tort/no-fault model with a pure no-fault model
• introduce a “continuum of care model” to promote appropriate medical evaluation, assessment and treatment

Question 5

Why might a pure no-fault system be cheaper and deliver more effective medical treatment?

Answer 5

benefits can be delivered without having to prove who is at fault:
• less money to lawyers
• quicker access to medical care

Question 6

Describe how Alberta’s new auto insurance is recommended to work

Answer 6

Create a Traffic Injury Regulator, including a Board and Tribunal to oversee the 4 arms of accident care & compensation:
[1] claims administration and support
[2] medical experts to evaluate injuries
[3] claims assessment panels for income replacement
[4] a reconstituted version of AIRB (Automobile Insurance Rate Board)

Question 7

How might the “4 arms” of Alberta’s Traffic Injury Regulator be funded?

Answer 7

• mainly by Alberta auto insurers in proportion to their market share
• a smaller contribution by the Alberta government (from savings generated by the new system)

Question 8

Assess the likelihood of a successful legal challenge if Alberta’s auto reforms are implemented

Answer 8

A legal challenge would probably not be successful for the following reasons:
→ Manitoba and Quebec already have a pure no-fault system
→ such systems have been judged to be within the scope of provincial legislative authority
→ a challenge under Canada’s Charter of Rights & Freedoms has no merit because all drivers are treated equally
→ Morrow v Zhang upheld the minor injury cap so a future Charter challenge would likely not succeed either
(So Alberta’s auto reforms would likely survive a legal challenge)

Question 9

Identify 2 regulatory reforms being considered for Albert auto insurance

Answer 9

• switch from ‘prior approval’ to ‘file & use’
• make winter tires mandatory from October to March

Question 10

Identify 2 problems that Alberta and Ontario auto insurance have in common

Answer 10

• rising cost of auto insurance (largely bodily injury costs)
• inefficient delivery of medical care

Question 11

What has been identified as a primary cause of problems in AB & ON auto insurance

Answer 11

both systems have a tort component which causes:
→ delays in medical care
→ diversion of resources to the legal system

Question 12

Identify a similarity in recommendations to address these problems in AB & ON auto insurance

Answer 12

Greater focus on timely medical care

Question 13

Identify a difference in recommendations to address these problems in AB & ON auto insurance

Answer 13

Alberta:
• convert to a pure no-fault system
Ontario:
• keep hybrid tort/no-fault system
(but fix structural flaws by appointing an arms-length regulator with powers to enact policies & procedures)