O. Reg. 275/03: AUTOMOBILE INSURANCE

 

ontario regulation 275/03

made under the

insurance act

Made: June 25, 2003
Filed: July 2, 2003
Printed in The Ontario Gazette: July 19, 2003

Amending Reg. 664 of R.R.O. 1990

(Automobile Insurance)

1. Section 1 of Regulation 664 of the Revised Regulations of Ontario, 1990 is amended by adding the following definition: 

“fleet” means a group of not less than five automobiles,

(a) that are under common ownership or management,

(b) of which at least five are commercial vehicles, public vehicles or vehicles used for business purposes, and

(c) of which any that are subject to a lease agreement for a period in excess of 30 days are leased to the same insured person;

2. Section 4 of the Regulation is revoked and the following substituted:

4. Insurers are exempt from the requirements of section 236 of the Act with respect to every contract of automobile insurance that insures a fleet.

3. (1) Clauses 9.1 (10) (a) and (b) of the Regulation are revoked and the following substituted:

(a) the restriction is contained in a settlement;

(b) the settlement is entered into on or after the first anniversary of the day of the accident that gave rise to the claim; and

(c) the insurer complied with subsections (2) and (3).

(2) Section 9.1 of the Regulation is amended by adding the following subsections:

(11) Despite clause (10) (b), a restriction contained in a settlement entered into before the first anniversary of the day of the accident that gave rise to the claim is not void under subsection 279 (2) of the Act if, in respect of the claim,

(a) the insured person brought a proceeding in a court of competent jurisdiction under clause 281 (1) (a) of the Act and examinations for discovery have commenced;

(b) the insured person referred the issues in dispute to an arbitrator under clause 281 (1) (b) of the Act and a pre-hearing conference has been completed; or

(c) the insurer and the insured agreed under clause 281 (1) (c) of the Act to submit the issues in dispute for arbitration in accordance with the Arbitration Act, 1991 and an arbitration agreement under that Act has been entered into.

(12) Clause (10) (b) and subsection (11) apply to claims that have not settled before October 1, 2003, unless a disclosure notice under subsection (2) in respect of the settlement or purported settlement was given to the insured person before that date.

4. Subsection 12 (2) of the Regulation is revoked and the following substituted:

(2) An arbitrator shall, under subsection 282 (11) of the Act, consider only the following criteria for the purposes of awarding all or part of the expenses incurred in respect of an arbitration proceeding:

1. Each party’s degree of success in the outcome of the proceeding.

2. Any written offers to settle made in accordance with subsection (3).

3. Whether novel issues are raised in the proceeding.

4. The conduct of a party or a party’s representative that tended to prolong, obstruct or hinder the proceeding, including a failure to comply with undertakings and orders.

5. Whether any aspect of the proceeding was improper, vexatious or unnecessary.

(3) Upon the request of the insurer or the insured person, the arbitrator shall, for the purposes of awarding expenses, take into account all written offers to settle, if any,

(a) that were made after the conclusion of mediation and before the conclusion of the arbitration; and

(b) that were made in accordance with the rules of practice and procedure applicable to the proceeding.

(4) If the arbitrator is requested to take into account a written offer under subsection (3), the arbitrator shall have regard to the terms of the offer, the timing of the offer, the response to the offer and the result of the proceeding.

5. The Regulation is amended by adding the following section:

13. Despite section 9.1 of the Statutory Powers Procedure Act, an arbitrator or, in the case of appeals or applications for variation or revocation, the Director of Arbitrations does not require the consent of the parties,

(a) to combine two or more proceedings or any part of them; or

(b) to hear two or more proceedings at the same time.

6. Subsection 15 (3) of the Regulation is revoked and the following substituted:

(3) Despite subsections (1) and (2), sections 410 to 417 of the Act do not apply to any contract of automobile insurance that insures a fleet.

7. Subsections 16 (5), (6), (7), (8), (9) and (10) of the Regulation are revoked and the following substituted:

(5) Membership in an organized group shall not be used as an element of a risk classification system unless the group consists of no fewer than 100 members other than associate members of the group, a group marketing plan has been entered into that meets the requirements of section 17 and the group is,

(a) a trade union, a professional or occupational association or an alumni association;

(b) a non-profit entity that has been in existence for at least 24 months;

(c) a group of employees of the same employer; or

(d) a group of members of a credit union that satisfies the requirements of subsection (7).

(6) An organization formed primarily for the purpose of purchasing or providing goods or services does not constitute a non-profit entity for the purposes of clause (5) (b).

(7) A group of members of a credit union constitute an organized group for the purposes of clause (5) (d) if the following rules are satisfied:

1. The bond of association in respect of the credit union for the purposes of subsection 30 (1) of the Credit Unions and Caisses Populaires Act, 1994 is a common bond of occupation or association referred to in clause 30 (2) (a) of that Act.

2. The members of the credit union who belong to the group are,

i. employees of the same employer,

ii. members of the same trade union, or

iii. members of the same professional or occupational association.

3. The group of members does not include any person admitted to the credit union who does not come within the common bond of association described in paragraph 1, unless the person is an associate member of the group under subsection (8), (9) or (10).

(8) Despite paragraph 2 of subsection (7), the following persons may be included in an organized group described in clause (5) (d) in respect of a particular credit union, but only as associate members of the group:

1. Employees of the credit union.

2. Retired employees of the credit union who receive or are entitled to receive retirement benefits from the credit union.

(9) Retired employees of the same employer who receive or are entitled to receive retirement benefits from the employer may be included in a group referred to in clause (5) (c) or subparagraph 2 i of subsection (7), but only as associate members of the group.

(10) Each of the following persons may be included in a group referred to in clause (5) (a), (b), (c) or (d), but only as an associate member of the group:

1. A person who is the spouse or same-sex partner of a member or associate member of the group.

2. A person under 25 years of age who is a child of a member or associate member of the group or of the spouse or same-sex partner of a member or associate member of the group and,

i. resides in the same dwelling as the member or associate member, or the spouse or same-sex partner of the member or associate member, as the case may be, or

ii. attends an educational institution on a full-time basis.

3. A person who is the spouse or same-sex partner of a child described in paragraph 2.

(11) A risk classification system shall not include an element that results in the exclusion of a member or associate member of an organized group referred to in subsection (5) for the purposes of risk classification if,

(a) the insurance is sold under a group marketing plan within the meaning of section 17; and

(b) coverage is for a private passenger vehicle within the meaning of the Plan of Operation established by the Facility Association under subsection 7 (3) of the Compulsory Automobile Insurance Act.

(12) No element of a risk classification system shall result in a change in the classification of an insured before the next renewal date of the insured’s policy because,

(a) a group marketing plan within the meaning of section 17 terminates; or

(b) the insured ceases to be a member or associate member of an organized group referred to in subsection (5).

(13) Subject to subsection (12), no element of a risk classification system that uses membership in an organized group referred to in subsection (5) shall apply to an insured who ceases to be a member or associate member of the group.

(14) An organized group that met the requirements of this section and section 17 as they read on September 30, 2003 shall be deemed to meet the requirements of this section and section 17 after that day if,

(a) membership in the group was an element of a risk classification system before October 1, 2003; and

(b) a group marketing plan has been entered into that meets the requirements of section 17.

(15) In this section,

“credit union” means a credit union as defined in section 1 of the Credit Unions and Caisses Populaires Act, 1994;

“same-sex partner” has the same meaning as in Part VI of the Act;

“spouse” has the same meaning as in Part VI of the Act.

8. (1) Subsection 17 (1) of the Regulation is revoked and the following substituted:

(1) In this section,

“group marketing plan” means an arrangement made in writing between an insurer and a sponsor to market automobile insurance to members of an organized group referred to in subsection 16 (5);

“sponsor” means a person who is authorized to enter into a group marketing plan on behalf of an organized group referred to in subsection 16 (5).

(1.1) A group marketing plan shall include the details of the arrangement, including,

(a) the name of the insurer and the name of the sponsor or sponsors and their respective responsibilities;

(b) the name of the broker or agent;

(c) the effective date of the group marketing plan;

(d) information with respect to fees;

(e) whether or not the group marketing plan is made to the exclusion of another group marketing plan with respect to the group; and

(f) the procedure for terminating the group marketing plan.

(2) Subsection 17 (3) of the Regulation is amended by striking out the portion before clause (a) and substituting the following:

(3) An insurer, agent or broker who sells automobile insurance under a group marketing plan shall not accept an application from a person for insurance coverage unless, not later than 30 days after accepting the application, the insurer, agent or broker makes full and fair disclosure in writing to the person of all features of the group marketing plan and the insurance coverage, including,

. . . . .

(3) Clause 17 (3) (b) of the Regulation is revoked and the following substituted:

(b) the financial interests of the sponsor in the group marketing plan.

(4) Section 17 of the Regulation is amended by adding the following subsection:

(3.1) For the purposes of clause (3) (b), the financial interests of the sponsor include any lump sum payment, percentage of premium or other payment received by the sponsor from the insurer as a result of a person purchasing automobile insurance coverage through the plan.

9. The Regulation is amended by adding the following sections:

Public Adjusters — Statutory Accident Benefits (Section 398 of the Act)

18. A person is exempt from subsection 398 (1) of the Act in respect of a claim for benefits under the Statutory Accident Benefits Schedule if,

(a) the person,

(i) obtains and continues to maintain errors and omissions liability insurance acceptable to the Superintendent in an amount of not less than $1 million in respect of any one occurrence,

(ii) does not provide services in respect of a claim by another person whom the person knows or ought reasonably to know has sustained a catastrophic impairment as that term is defined in the Statutory Accident Benefits Schedule, and

(iii) files with the Superintendent such information as the Superintendent requires; or

(b) the person is an employee of a barrister and solicitor or a firm of barristers and solicitors and, in respect of any claim for benefits under the Statutory Accident Benefits Schedule, acts only under the direct supervision and direction of a barrister and solicitor who,

(i) is a member in good standing of the Law Society of Upper Canada,

(ii) carries such professional liability insurance as the Law Society of Upper Canada requires, and

(iii) is retained in respect of the claim or is a member of a firm that is retained in respect of the claim.

Representation — Dispute Resolution Proceedings (284.1 of the Act)

19. (1) A person may, for compensation, represent a party to a proceeding under sections 279 to 284 of the Act if,

(a) the person meets the requirements in section 18; or

(b) the party to the proceeding whom the person represents is an insurer.

(2) For the purposes of subsection (1), a person shall be considered to be representing a party for compensation if the person receives or is entitled to receive, directly or indirectly from any source, a financial benefit in connection with the representation of the party, whether the financial benefit is wages, fees or another form of consideration or remuneration.

10. (1) Subject to subsection (2), this Regulation comes into force on the later of October 1, 2003 and the day it is filed.

(2) Section 9 comes into force on the later of November 1, 2003 and the day this Regulation is filed.