Now McGuinty has put his money where his mouth
was: in late June, the government released "final draft" amendments to the SABS
regulations. They eliminate DACs, introduce a new regime, and put teeth into
that regime by way of amendments to the Unfair or Deceptive Acts or Practices
A letter dated June 27 from Bryan Davies,
former chief executive officer and superintendent of financial services at the
Financial Services Commission of Ontario (FSCO), advised stakeholders of the
Davies offered stakeholders an opportunity to
review what he calls the "final draft regulations" in the context of a "brief
technical review" by FSCO "before the Ministry takes the regulation forward for
final approval." The review process was conducted in July.
The government believes the new system will
streamline the claims process. It allows parties with disputes over assessment
or examination findings and benefit determination to proceed directly to the
dispute resolution system at FSCO or to the courts following mediation.
The current version of the regulation follows
on one released in December 2004.
"The most important change allows claimants to
[give] the insured's caregiver a chance to comment on the medical report
obtained by the insurer," says Philippa Samworth of Dutton Brock LLP.
Under the DAC system, claimants could be
subject to three different assessments in any one claim: from their own health
care providers, from examination, and by DACs.
"Because DAC decisions were binding, adjusters
often sat back and took the path of least resistance by sending claimants to
the DAC for determination, even in slam-dunk cases," Orlando says. "Given the duty of good faith
and the unfair practices amendments, I hope that the new system will run in a
more efficient manner."
Samworth believes it will. "I'd like to think
these changes will make our system easier and fairer to insureds and give them
a better understanding of what the assessors are saying," she said. "Insured
shouldn't have to go through the myriad of medical examinations and reports
that occurred under the DAC system."
Under the new regime, claimants will still be
allowed to obtain assessments from their own health care providers, and
insurers disputing claims will have to schedule a separate medical examination
with an expert of their choosing before making a decision on benefit
entitlement. The insured can then have his or her health care provider make
written comments about the insurer's report.
"Hopefully that will effect settlement or
narrow the issues pending the dispute resolution process," says Samworth.
There are benefits to insurers as well: the DAC
system allowed referrals to up to four different types of DACs. Each centre
separately reviewed medical and rehabilitation issues, catastrophic impairment,
disability, and attendant care issues. The new system lets insurers combine
broad benefit issues into one comprehensive examination.
The government also hopes to eliminate the
large multidisciplinary teams involved in DAC assessments, where health care
providers assessed and reviewed treatment plans proposed by the same type of
health care provider.
Under the new system, claimants and insurers
must use single examiners wherever feasible. Multidisciplinary teams can be
used if justified by the nature of the claims and the benefits of using such
From a governance perspective, examiners will
be subject to the rules of their governing body and the requirements of the
Insurance Act. They must adhere to the practice standards of their health
profession when conducting examinations. Insurers who request an examination
from an unqualified professional commit an unfair business practice.
The insurance examination must take place no
further than 30 km from the claimant's home in the Greater Toronto Area, and
not more than 50 km from the claimant's home elsewhere in Ontario. If no qualified practitioner is
available within these parameters, the insurer may arrange an examination "at a
location that is reasonable in the circumstances."
Subject to defined parameters, the cost of
examinations becomes a matter of negotiation between individual insurers and
Rigorous procedural time frames permeate the
new system, including:
must schedule examinations within five to 10 days (20 when there is a
catastrophic impairment determination) after notifying the claimant that the
insurer requires an examination by its own expert, but the parties can agree on
an alternative date;
must provide reports to insurers within 10 days of an examination, or 30 days
in the case of catastrophic impairment;
must make benefit determinations within five business days after receipt of the
examination report. They must also provide copies of the report to the claimant
and the claimant's health care practitioner; and
must take place within 60 days of an application to FSCO.
Perhaps most importantly, the government has
put some teeth into SABS. The amendments to the Unfair or Deceptive Acts or
Practices regulation make it an unfair practice for an insurer to deny
entitlement without a medical examination, to misrepresent the opinion of an
examiner, to request an examination when not reasonably required, or to fail to
pay a claim or for the costs of an assessment within the prescribed time limits
The release of the final version of the draft
regulations means that the process of DAC elimination, which started in March
2004, is nearing a close.
At the time a government white paper
recommended abolishing DACs and replacing the system of separate evaluations
from the "plaintiff's doctor" and the "insurance company doctor" with an
"Expert Assessor Network," which would be a pool of doctors to whom FSCO would
But the Association of Designated Assessment
Centres (ADAC), looking at the disenfranchisement of a highly profitable
business, objected vehemently.
The government listened. Colle appointed
Samworth as a consultant. After five days of hearings and over 100 written
submissions, Samworth made confidential recommendations to the government.
Soon afterwards, the Liberals went back to the
drawing board. The December 2004 regulation was the result.
It took approximately six months for FSCO to
come up with the final draft regulations after hearing over 200 submissions.
Still, the process isn't quite at an end.
"The latest word on implementation is Feb. 1,
2006," Samworth says.