Insurance amendment will allow rampant insurer fraud
Insurers set to profit from injured claimants on low prejudgment interest rate
FOR IMMEDIATE RELEASE
March 7, 2014
Burlington, ON: Auto insurance legislation introduced this week will give insurers an additional incentive to delay justice to innocent Motor Vehicle Accident victims.
The Ontario Trial Lawyers Association (OTLA) is concerned about changes to the prejudgment interest rate in pain and suffering claims. Under the proposed legislation, the rate would be lowered to 1.3 per cent from the current 5 per cent. If this change is approved by the Legislative Assembly, insurers will be set to profit particularly in serious cases as they can earn greater returns by delaying settlement and investing the funds.
"It's simple math," said Charles Gluckstein, President of OTLA. "Why would an insurer pay out a claim when it can make money by delaying that claim indefinitely? When they are getting 4 per cent on their money, and they only have to pay interest to the claimant at 1.3 per cent, they can't lose in that scenario."
"When it's more profitable for an insurer to delay than to pay, that's just wrong," added Gluckstein.
OTLA urges all Members of the Legislative Assembly of Ontario to demand that the Minister of Finance amend the bill.
OTLA is also concerned about certain changes to Ontario’s Auto Insurance Dispute Resolution System. While Justice Cunningham, in his recent review of the Dispute Resolution System, has recommended a number of sensible reforms, OTLA strongly cautions the government to reconsider changes that would deprive injured accident victims of the opportunity to access the Courts in cases involving denials of statutory accident benefits.
“When an insurance company wrongfully cuts off a person’s benefits, that person should be able to go to Court to force them to pay,” said Gluckstein. “They shouldn’t be denied access to justice.”
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The Ontario Trial Lawyers Association was formed in 1991 by lawyers acting for plaintiffs. Our purpose is to promote access to justice for all Ontarians, preserve and improve the civil justice system, and advocate for the rights of those who have suffered injury and losses as the result of wrongdoing by others, while at the same time advocating aggressively for safety initiatives. Our organization has almost 1,500 members who are dedicated to the representation of injured plaintiffs across the province and country. For more information, visit www.otla.com.
Director of Public Affairs
Ontario Trial Lawyers Association