The Ontario Court of Appeal has clarified that 2015 amendments to the Insurance Act could apply to actions that were brought forward before changes came into force. In complimenting decisions of two cases heard together on appeal — El-Khodr v. Lackie and Cobb v. Long Estate — the court found that a new prejudgment interest rate applied to actions brought over motor vehicle accidents that predated the legislation. In 2015, amendments to the Insurance Act came into effect, which reduced the default rate of prejudgment interest for non-pecuniary losses for bodily injury or death from five per cent to the bank rate at the time the proceeding is started. There, however, has been much debate as to whether this had retrospective effect or only applied to new actions.Lawyers say the Court of Appeal’s decision could settle this argument and bring greater certainty to the issue. Barry Percival, one of the lawyers who represented the defendants in El-Khodr, says the decision is … [Read more...] about OCA clarifies Insurance Act amendments
New car insurance rates
Insurance giant Allstate has raised eyebrows after being granted patents for a proposed high-tech surveillance system that could track a driver’s every move. The company won patents for technology that, through the use of cameras and sensors, could monitor whether a driver is speeding, peeling rubber or turning without signaling. Sensors could even record a driver’s heart rate and blood pressure and gather information about passengers.Not only could Allstate use that data to set insurance rates and analyze driver behavior, the company could be free to sell it to third parties such as life and health insurance companies, potential employers, credit rating agencies and advertisers.As with other types of data companies collect from consumers, drivers are unlikely to know what’s done with it, how it’s stored, and who winds up with the information for what purpose. And though Allstate’s new technology would require consent for those willing to give up such … [Read more...] about How much privacy are drivers willing to give up for better car insurance rates?
After the financial crisis exposed the devastation caused by predatory lending, state and federal authorities vowed to protect consumers from practices that lured them into debt they couldn’t afford.But Congress kept most auto loans – the second largest source of debt for Americans – out of the reach of the fledgling U.S. Consumer Financial Protection Bureau. And now many of the same tactics that led to the mortgage meltdown – like fudging facts on the loan application or charging consumers hidden fees – continue to plague auto loans, an investigation by the Center for Public Integrity found.The politically powerful industry has also mastered a few high-pressure tactics of its own. Chief among them is the “yo-yo,” where dealers let buyers drive a new car home in hopes of locking them into a deal and later tell them their financing fell through. The tactic can lure buyers to accept a higher interest rate.And while the financial crisis rendered … [Read more...] about Buyer Beware – Car Dealers Adopt Outlawed Mortgage Tactics, New Consumer Agency Powerless Against Them
Many insurance professionals believe the next hard market may be lurking right around the corner. Is your self-insurance program ready?Many insurance professionals believe the next hard market may be lurking right around the corner. Historically in hard markets, self-insurance has been used as a risk financing mechanism to offset higher insurance prices and the lack of capacity. But just as a diligent driver would be sure to have a mechanic perform a full tune-up before embarking on a long car trip, a risk manager also needs to periodically conduct a systematic check of insurance exposures in order to maximize the performance of a self-insured program and determine if there are any issues hidden below the surface. The following key questions can guide your assessment.Is Self-Insurance a Viable Option?Self-insurance and large-deductible programs are usually mentioned at the top of the list of ways to control insurance costs in a hard market. A risk manager needs to first determine which … [Read more...] about Does Your Self-Insured Program Need a Tune-Up?
According to the National Insurance Crime Bureau (NICB), 2009 will mark the sixth consecutive year that car theft rates have gone down. Unfortunately for auto insurers (and anyone who wants to buy an inexpensive car insurance policy), it seems that criminals have moved on to bigger and better things. Auto insurance fraud incidents, or what the NICB refers to as “staged accident questionable claims,” have gone up 46% from 2007 to 2009.“Across the country we’re seeing an alarming number of what we call staged accidents,” said Joe Wehrle, NICB president and chief executive officer. “These are crashes that are made to look like accidents, but in reality are carefully orchestrated scenarios aimed at collecting medical and vehicle damage payments from insurers. The simple truth is they are expensive and dangerous.”So while claims have gone down as a whole (probably due to declining auto sales and fewer drivers on the road as a result of the … [Read more...] about Auto Insurance Fraud On the Rise
Males have by and large run this planet since Neanderthals were drawing on walls in caves. So when we talk about improving gender equality, we are generally talking about things that are immediately beneficial to women. A recent ruling by the European Court of Justice, however, is likely going to cost female drivers some money.The court has found that tying insurance rates to gender goes against Europe’s Fundamental Charter of Rights. So come December 2012, insurers will no longer be able to do it. The actuarial science regarding male and female drivers, particularly those under 25 years old, couldn’t be clearer. Young men get into more and more expensive accidents than your women. Still, while the numbers don’t lie, I have always wondered why that fact makes it OK to discriminate.Apparently the court agreed.Claire Wilkinson of III’s Terms + Conditions blog explains the likely fallout.In the past, insurers relied on a 2004 directive that recognized the … [Read more...] about Europe Just Cost Women a Bunch of Money on Their Car Insurance By Switching to Gender Equality
Vehicle safety systems are experiencing a period of development unlike any in the history of the industry. While the 20th century focused on passive safety systems, such as crumple zones, seat belts, and airbags, these measures focused on mitigating the danger to occupants once an accident had happened. The 21st century, on the other hand, has emphasized active safety: keeping occupants safe by making sure the accident never happens. Concerns About the Pace of Adopting Active Safety SystemsWhile new technologies are becoming available at seemingly a rapid-fire pace, some industry figures are concerned about the rate that active safety systems are being adopted in the industry. A Boston Consulting Group study commissioned by The Motor & Equipment Manufacturers Association recently found that so-called advanced driver assistance systems that are currently available could save up to 9,900 lives a year if they were fully adopted in the United States. These systems focus on three ways … [Read more...] about New Study Says…Pace of Adopting Active Safety System Should Be Picked Up
On March 1, 2016, WRAL Investigates reported that North Carolina Insurance Commissioner Wayne Goodwin wants state lawmakers to tighten up regulations over commercial vehicle insurance, stating that some out-of-state trucking companies are claiming in-state residency to obtain lower insurance rates.It is no secret that North Carolina has some of the lowest vehicle insurance rates in the country. These insurance policies, however, are available only to residents and businesses that reside in the state. According to WRAL, ten years ago, drivers from New York and New Jersey were registering their cars in North Carolina in order to get cheaper car insurance. But, the General Assembly changed the law to stop this from happening.On March 3rd, the same issue is occurring in the $670 million-a-year commercial vehicle insurance market. Reportedly, North Carolina Insurance Commissioner Wayne Goodwin is seeking to have a similar statutory enactment passed. In recent years, the North Carolina … [Read more...] about Tightening Up Regulations Over Commercial Vehicle Insurance
While recent innovations in batteries have been driving down the cost of electric vehicles, electric vehicles still initially cost a premium over their gasoline-powered counterparts, even with the assistance of large tax subsidies. However, the real savings come over time as the electricity required for recharging a vehicle’s battery is less expensive than a tank of gas and fewer moving parts means fewer fluids to replace and less parts undergoing wear and tear. Even the brakes last longer because regenerative braking from the electric powertrain replaces rotors and brake pads for most braking needs.Although the long-term cost savings of electric vehicles are easily recognizable, the upfront financial burden still gives consumers pause. However, the automotive industry is finally taking note as manufacturers unveil all-inclusive leasing or rental programs. For example, these programs offer the car with maintenance and insurance at a flat rate. In a … [Read more...] about New Ownership Model Accelerates Adoption of Electric Vehicles
On September 21, 2015, the U.S. Tax Court released its decision in R.V.I. Guaranty Co. v. Commissioner (RVI), 145 T.C. No. 9, and ruled that the taxpayer’s residual value insurance contracts constituted insurance for U.S. federal income tax purposes. As a result, the taxpayer was able to more closely match premium inclusions with loss deductions. This case represents a third victory for taxpayers with respect to the definition of insurance for tax purposes, following Rent-A-Center v. Commmissioner, 142 T.C. 1 (2014), and Securitas Holdings, Inc. v. Commissioner, T.C. Memo. 2014-225. BackgroundR.V.I. Guaranty Co. Ltd. (RVIG), is a Bermuda corporation registered and regulated as an insurance company under the Bermuda Insurance Act of 1978. As an electing domestic taxpayer under Internal Revenue Code (Code) § 953(d), RVIG is the common parent of an affiliated group of corporations that includes R.V.I. American Insurance Company (RVIA), a property and casualty insurance company … [Read more...] about U.S. Tax Court Upholds Favorable Definition of Insurance