Overview

In Ontario, every vehicle owner is forced to buy government designed auto insurance. The terms and conditions are set by the government, but the insurance itself is delivered by private sector insurance companies. FSCO is supposed to make sure that these private insurers follow the law and treat individuals fairly.

The government auto insurance policy provides for the provision of certain medical and rehab benefits to individuals harmed in car crashes, known as statutory accident benefits (SABs). To keep premiums low, accident benefits are subject to restrictions depending on the severity of injury. By law, companies selling auto insurance must provide these benefits.

In 2010, the harmonized sales tax (HST) was introduced. HST is payable on many of the accident benefits. Even before HST came into effect, FSCO directed insurance companies to pay HST in addition to accident benefits and not to include HST in the calculation of any restrictions to benefits. Over the next eight years, they repeated this direction over and over again in formal FSCO Guidelines.

FSCO has been absolutely clear from the beginning of the HST that HST is not a benefit and any HST payable for benefits must not be deducted from the benefits available to the injured person. FSCO has repeated that direction time and again.

The named insurance companies ignored the government and the regulator. Where they can, they refuse to pay the HST and they use HST to wrongfully lower benefits resulting in victims receiving less care. They have no intention of changing.

FSCO was aware of and acknowledged the insurance companies’ devious practices, but stood by while innocent victims suffered.

Lawyers prosecuting the class action believe that this is a wide spread industry practice and are investigating other insurance companies. A toll-free hotline has been established to receive complaints relating to any insurer who has wrongful reduced benefits by the amount of the HST. The number to call is (866) 540-2747