The actuary who prepared the closed-claims study for the Public Utilities Board (PUB) in its review of automobile insurance in the province probably felt like she was on a new car’s heated seat Wednesday as lawyers steered questions at her repeatedly on the reliability of the data used in the completion of the report.
Paula Elliott, principal with Oliver Wyman, however, remained steadfast that the data — collected by the Insurance Bureau of Canada (IBC) — was reliable and properly obtained even though the IBC is the national industry association representing Canada’s auto insurers.
“The responsibility that was undertaken by IBC was to ensure that the data, that they validate it, checked it, were there to answer any questions, to train the staff — that was the role that they played,” Elliott said. “They are the experts in this. They’ve done this before. … (We) relied upon their data collection process in a similar format previously for studies that have been accepted and adopted in other provinces and have stood. My findings have stood the test of time.
“I do have confidence in the data that was provided to me based on the history of IBC’s work and their area of expertise.”
Ernest Gittens, the lawyer representing the Atlantic Provinces Trial Lawyers Association, said his group has concerns about the involvement of the IBC in gathering the data used in the closed-claims study.
“You acknowledge that IBC is also a lobby group for the insurance industry, and the companies providing the data also have a parallel interest or a similar interest to what IBC has in terms of the outcome of these proceedings or the ultimate implementation of a cap?” Gittens asked.
“I’m aware that they would likely, I have not read it, but I’m aware of what you’re saying and why they would likely want a cap, yes,” Elliott replied.
The PUB had asked Oliver Wyman to do a closed-claims study on third-party liability/bodily injury claims arising from the use of private passenger automobiles in the province.
The study includes data collected on 1,977 claimants from 20 insurers whose claims were closed during the period from Jan. 1, 2016 to Nov. 30, 2017. The data includes statistics regarding the number and distribution of claimants and paid claimant costs.
Oliver Wyman collaborated with the IBC to design a detailed template for the study, and the IBC managed the collection of data. The IBC then compiled and validated the data submitted by the insurers.
Jerome Kennedy, representing the Campaign to Protect Accident Victims, said his group has problems with how the current insurance review is being conducted as compared to the last review in the province in 2005.
“In 2005, for example, there was a medical consultant utilized by the board, there was a retired claims adjuster who was involved in looking at files and there was also a former chartered accountant who performed an audit or review of the file,” Kennedy said, adding that those roles in the current review are filled by the IBC.
“So it was certainly, in our view, a much more rigorous approach to the closed-claims study in 2005.
“When we are looking at something as serious as the decision that has to be made here, whether or not to change a system that has been in place for many years and to bring in something such as a (compensation) cap on minor injuries, then I would certainly have liked to see a process utilized similar to the one utilized in 2005, but that is something the commissioners will have to grapple with later on.”
A cap on compensation for minor injuries is one of the possible solutions being put forward to the PUB in its review of automobile insurance rates in the province.
Amanda Dean, IBC vice-president Atlantic, however, said there is much more to their submission than the imposition of a compensation cap on minor injuries. She said there is also a focus on health, and how to get people who are injured well again faster.
“We are seeing increasing pressure on claims costs. We are hearing from consumers that premiums are high,” Dean said. “Right now there is a gap. Premiums aren’t covering claims costs, especially after you factor in the taxes paid by industry, costs of salaries, building rentals, you name it.”
Dean said the lobbying aspect of the IBC is separate from the statistical department, which is important for the credibility of any data collected by the IBC.
“There is certainly a lot of checks and balances in the data that IBC collects, and IBC collects this data on an ongoing basis for GISA, the General Insurance Statistical Agency,” she said. “What that means is it’s a group of regulators right across the country who need to collect this data. As a result of IBC being contracted to collect that data, there’s a number of checks and balances that GISA has for IBC. One of those things include frequent audits in terms of how the data is being collected, how is it being used.
“Those IBC employees who are contracted by GISA to collect this data, they are subject to an awful lot of scrutiny and a number of audits as well to ensure things are being done in accordance with the way GISA wants things done.”
In the current PUB review, Dean said, there was a lot of conversation back and forth with the PUB’s actuarial consultant to ensure the proper methodology was being used to collect the data for the review.
This session of the PUB public hearings is expected to run through next week.
