The IBC has issued a “fact check” on the newest Ontario Trial Lawyers Association (OTLA) report, with spokesman Ralph Palumbo declaring that the study “isn’t fair, it isn’t serious and it isn’t factual.”
The study, an updated analysis of Ontario’s auto insurance industry, found that the province’s consumers “likely” overpaid on their premiums by $1.5 billion in the past two years, amounting to $100 per policy in 2014 and $120 per policy in 2013.
Consequently, it concluded that the industry is “fundamentally broken” and calls for Ontario’s Auditor General to conduct an investigation on “premiums, insurance coverage and industry profits.”
"Clearly Ontario's auto insurance system is in deep trouble," Maia Bent, OTLA president, said in a statement. "Not only are drivers paying through the nose, but the policy is not worth the paper it's written on.”
The IBC, however, has emerged to rebuff these claims and debunk the report, which it labels a “self-funded ‘study.’” Palumbo believes that the findings are skewed since they fail to include 25% of Ontario’s auto insurers, “conveniently” the ones that lost money.
Moreover, he contends that the study neglects to compensate for contingency fees charged by personal injury lawyers, which can equal 40% of the settlement.
"This trial lawyers' study is misleading Ontario consumers. It is not an academic study. There are a number of factors contributing to the cost of auto insurance, including not only distracted driving and fraud – but also the exorbitant fees that trial lawyers are themselves demanding of innocent accident victims," Palumbo said in a statement.
The report, titled
Return on Equity for Insurance Companies in Ontario, can be viewed
here.
