By Sawarn Benning
Overview:
In an attempt to meet commitments made during the 2024 Ontario budget, the government has proposed amendments to the Insurance Act and to the Ontario Regulation 34/10, more commonly referred to as the Statutory Accident Benefits Schedule or SABS.
There are three major categories of amendments proposed. The first two amendments aim to provide more options for auto insurance consumers and modify the payment priority of medical and rehabilitation benefits. The third amendment rectifies a technical error in the French language SABS.
Proposed Amendments:
Optional Benefits
The first proposed amendment would require that, for every contract evidenced by a motor vehicle liability policy, insurance companies must offer benefits under Parts II, IV, V and VI of the SABS as optional benefits. The benefits captured under the scope of these optional benefits would include income replacement, non-earner, caregiver, death and funeral and other benefits. However, Part III, pertaining to medical, rehabilitation and attendant care benefits, remains unchanged as mandatory auto insurance coverage.
This amendment would apply prospectively and retroactively, provided the latter changes are accompanied by written agreement between the insured person and the insurer.
The proposed amendments would also impact payment of weekly benefits. Currently, the SABS provides for fixed weekly payments for income replacement (section 7(1) in defining ‘B’), non-earner (section 12(2)), caregiver (section 13(2)(a)-(b)), and housekeeping and home maintenance benefits (section 23). Each of these prescribed monetary values would be substituted by the amount fixed by the optional benefit, should the insured person be entitled to the corresponding benefit.
Payment Priority
The second proposed amendment would modify the Insurance Act and SABS to reverse the priority levels for payment of medical and rehabilitation benefits (excluding medication expenses).
Currently, under section 46.3(2) of the SABS, supplementary health insurance plans must be exhausted before auto insurance can be claimed. Under the amendment, auto insurance would take payment priority for portions of the expense reasonably available to the insured person, under the supplementary health insurance plan.
French Language Discrepancy
The third amendment consolidates a discrepancy within the French version of the SABS. Section 3.1(1)(8) of the English SABS, as it pertains to catastrophic impairment, requires class 5 impairment in one or more areas of function. On the other hand, the French version requires class 5 impairment in two or more areas of function. The proposed amendment reconciles the discrepancy by making the French version consistent with the English version.
Impact of Proposed Amendments:
These amendments aim to provide greater flexibility and options to insured persons such that part of the auto insurance policy can be catered to an insured’s needs. It is important for insurers to note that these amendments would change the liability owed to the insured person depending on their chosen benefit plan.
Further, insurers should note that expense claims may increase, given the reversal of priority for payments of medical and rehabilitation expenses.
Sawarn Benning is an articling student at the firm and the author of this blog. If you have questions about this blog, please contact Sawarn at [email protected] or the co-chairs of our LAT practice group: Peter Durant and Rebecca Brown Greer.
