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THE WEEKEND OUTLOOK Friday March 1991 Page 11 Peoples Forum- Questioning insurance system Dear Sir I have followed with some in the recent article by Halton North MPP Noel on the future publicly owned auto insurance plan and the more re cent letter from Shepherd who has spent years in the general insurance business The former outlined in general some ways in which he felt that a driverowned insurance system would be better than the current threshold nofault system introduced by the late Liberal in June 1990 The attacked the concept of a government operated plan on the basis of government inefficiency and with the claim that people are satisfied with the new system and that it is already adequately regulated by the government My own views on this subject come from the perspective of having been a volunteer worker on the Motorcyclists Coalition for Pair Insurance Rates for the past five years during which time a group of us have represented approximately 5000 of Ontario motorcyclists at a number of government hearings Insurance Board rate hearings and Legislative committee ses sions where one or another form of motor vehicle insurance have been discussed and rated Our library of reports of these hearings occupies quite a number of cardboard file cases in my basement Added to that is in formation from a large number of Ontario motorcyclists about how they find the current in system works for them On the basis of this informa the inescapable conclusion is that further reform is definite ly required I have no doctrinaire position about whether or not public ownership is necessary to accomplish this Either a closely regulated system as we have for the regulation of utilities such as electricity and telephone or a publicly owned system could work equally well The current system has more regulation in it than the previous one which was basically unregulated However the cur rent Ontario Insurance Commis sion has never held a public hear ing as the to acceptability of an lnsumace companys rates In fact the Commission is barred from telling the public if a com pany has applied for a rate change any details of those rate changes and the rate changes have been approved any details of what those approved changes were In every in surance company who filed motorcycle insurance rates under the new system was per mitted to charge those rates after 30 days Not a single alteration appears to have been made by the socalled government wat chdogs and yet at least one com pany the largest motorcycle in company in Ontario was permitted a per rent increase in average premium For the last five years and for 14 of the last 15 years motorcycle insurance in Ontario has been a substantially profitable business This is according to the In sumace Bureau of Canadas own figures which it collects tabulates and provides to the government of Ontario Un fortunately there is as many ac tuaries have pointed out in government hearings over the last few years no independent audit of those collected premium and cost figures Based on the 1989 industry data of premiums earned loss costs incurred costs of agents fees and business expenses and in cluding Interest earned at cur rent rates the net profit on motorcycle insurance in Ontario was about 25 per cent on sales of about 40 million dollars On the basis of the industrys claimed costs of operation other than those of directly servicing claims the net profit is over percent One problem emerging from the new system which restricts severely the rights of injured peo ple to sue for compensation in return for an enhanced package of without fault accident benefits is that many people in this province are not eligible for these benefits although they must pay for them since acci dent benefits are not first loss coverage In other words any other coverage you have through your employer or other private scheme of insurance must be us ed first before you can draw on the motor vehicle insurance coverage The insurance industry somehow convinced the previous government in 1989 that a tightly regulated system which was only weeks away from being implemented would not work and so Ontario motorists got an industrydesigned limited payout system with weak consumer pro tection For motorcyclists the tional discriminatory practices of Blacklisting refusing basic coverage on many makes and models requiring complemen business motorcycle in given only if you also in sure your house and car with the same firm this practice has been illegal in Ontario for many years incorrect use of the Facility Association bad driver rates as a means of turning away new business which have been common over the years are still common under the new system Further the new system has ap parently permitted insurers to ask for whatever rate they think the traffic will bear A rider insured with Prudential in 1990 paid 378 for basic coverage on his BMW motorcy For 1991 Prudential is asking for even though the rider has had no traffic violations ac cidents or claims An older rider of a late model Harley Davidson touring bike paid in for full coverage to Royal Insurance This year he has been asked for As a contrast the provincial government operated insurance system in Manitoba called Autopac would insure the BMW mentioned for basic coverage but also including collision for in an urban area or in a rural area The Harley- would have full coverage for in an urban area or in a rural area Even allowing for differences in the cost of servicing claims due to higher wages and overhead in Ontario than in Manitoba it is hard to see much advantage to the current Ontario system There are a number of cases arising which seem to indicate that the largest Ontario motorcy cle insurer who insures per cent of Ontario motorcyclists is reluctant under the new no- fault scheme to pay claims from who have been in accidents particularly those incurred while riding in the USA While settlement is sup posed to begin 10 days with interim payments I have heard of cases where months have gone by without any satisfaction A call to the Insurance Bureau of Canada has confirmed that this company is the source of a significant number of complaints by motorcyclists about poor claims settlement There are those who favour a pure nofault system such as provided in Quebec where one pays a flat fee along with the licence fee to obtain nofault benefits and give up your right to sue Additional coverage must be bought from the pnvate in industry What would be an ideal motor vehicle insurance system I think that Ontarios motorists and motorcyclists deserve to have the right to sue for damages in any accident where bodily injury and suffering requires medical treat ment The retention of legal rights in this type of civil suit is an important principle Accident benefits for those who do not have such protection through other in surance should be available but not mandatory Collision coverage should be available in the form provided under the previous system where it paid your car repairs if you were at fault but your notat fault situa tion was paid from the at fault drivers third party coverage Such a system could be provid at lower cost to the public than currently available by the use of a standardized classification and rating system which rewards good drivers and penalizes bad ones This would be coupled with strong consumer protection legislation and public review and audit of the operations of Ontario insurance companies Such a system could operate with coverage provided by private in through a private brokerage network It seems unlikely in my view that the in surance industry would ever agree to such a degree of regula tion The alternative then would seem to be a system operating through a private brokerage net work and selling coverage pro vided by a government insurance corporation which is regulated as a public utility Efficiently run there could well be additional cost savings in this system Yours sincerely Allan Johnson Georgetown Objects to columns Wants the truth about GST Dear Editor Twice now over the last several months I have via letters to the newspapers requested Garth Turner to tell us the cost of GST I suppose he feels if he does not reply the question will go away I have news for Mr Turner in tend to keep asking the question til a reply is received In the meantime Libertarians have done a guestimate Here it is employees at an average of pear year Equipment for work stations at each million Cost of million at per year Annual maintenance per year sq ft of office space at 90 per sq ft million Cost of 54 million at 12 per year Annual per Cost without soft maintenance year Total Annual paper postage ware etc etc per year At the most conservative estimate the cost of GST is over 150000000 per year This does not take into account the cost for the purchase of new systems to collect this tax by in dividual companies Also there is no doubt costs will go up as wages benefits etc go up Substantial extra costs will cur for business to document col and mail in this tax The government has constantly lied and said this tax will be revenue neutral irst of all they have to collect over 150 million just to break even However the government knows full well that GST will in fact produce somewhere between times the income that did All govern ments have forgotten how to tell the truth Libertarians would kill this tax since it costs too much to implement Sincerely Libertarian Acton Ont Dear Sir I felt the urge to write after reading The Editors Notebook Letter to Brian but changed my mind thinking it was an aber ration even editors are allowed to be petty on occasion The Let ter to Mike compels me to write I dont presume to have the solutions for the assorted pro blems of Canada or the world nor do I propose that differing view points should not be allowed their audience but Mr Gibsons let ters are an unconscionable abuse of privilege as well as being and banal The Letter to Mike debases the editorial to the level of washroom graffiti writing Mr Gibson is entitled to his opinion however of craft should oblige him to express his view point with wit rather than this dnvel This is not to say that it is necessary to foresake humour only the petty and the vulgar need to be omitted Using that criteria the space allocated to Mr Gibsons two let ters would liave been blank Sir you have a privileged posi tion to express your opinions use it with dignity do not denigrate it with such bankrupt prose Yours truly C Richard R I Georgetown Hospital lauded Dear Editor I would like to express my ap preciation towards John Oliver and the Board of Directors at Georgetown and District Memonal Hospital Over the past few years the neighbors have been exposed to increasing concentrations of of fensive smoke and odours from a waste incinerator at the hospital A few neighbours including myself have clearly informed the hospital of this unacceptable situation On March 6 I spoke with Mr John Oliver Executive Director and he informed me the Board of Directors made the decision at their meeting last week to remove this incinerator I applaud the Board of Direc tors and Mr Oliver for the sen sitivity they have expressed towards their neighbours who didnt want to complain or create a confrontation but merely wanted to breathe fresh air It is cooperation like this that makes Georgetown such an attractive place to live Yours very sincerely David Bradbury Georgetown Young adult looking for Real World To the Editor How many times can any young adult recall the number of times they are told about a mystical and magical place call ed the Real World Tonight was the final straw I want to know where this place is now and why I havent been admitted into itl Having a conversation in a local restaurant I was turned to and told that I needed to wait un til I had kids and was in the Real World Unable to resist I turned to this person and asked what the Real World was I was amazed to find out that I could not enter this land because I am a student at tending University I had no children and therefore any pro blems that I may have could not be that senous Let me tell you I am eagerly awaiting to join this legendary land Right now I am working three part time jobs in order to afford to live in this pretend land I volunteer with local softball and youth bowling for occasional pleasure I attend Ryerson Institute so I may be able to get a degree I have placement with a local youth drop in centre and then there is a long standing relationship which I am trying to hold on to even though my companion gets plac ed on the back burner far too often so I can cope One top of these unreal experiences there is homework my family eating sleeping and recreational activities the list could continue and for most young adults there are similar lists the items may change but the Idea is the same we are in the Real World its just different from yours I understand that many of you work an eight hour day and maybe even more and then you have to go home and make sup per spend some quality time with your children and then go to bed When you are leaving work we are just starting We come from our classes whether they be at the high school community college or university to a job where we are given similar responsibilities as you paid a hell of a lot less and are often times given the brunt of the day and all of your complaints From work we go home grab some cold lef tovers from the fridge in the kit chen and then we are off to do our homework I know if we had done our work at school then we would have no homework Sure if you believe this there is some swamp land in Florida for sale After our homework there may be time for a social life maybe Young adults are given the reputation of tying up the telephone lines for hours but how else can we socialize if we are ex hausted and we have four more chapters to read for tomorrow My day could start as early as a and I may not make it to bed until 3 00 a m or not at all but this is not the real world it is make believe Well I am waiting for the Real World to come and make my life worse I will get marned have a degree a fulltime job children to spend quality time with and sleep I think that it is time for us all to stand back and take a look at the other persons view before we condemn it We all have responsibilities they may be different but they are all responsibilities I may on ly be 21 but I think that the world that I am In right now is the Real World It may not be yours but it is mine so please respect that I try to respect yours Sincerely DeeDeeHaynes Georgetown Write us a letter The Herald wants to hear from you If you have an opinion you want to express or a comment to make send us a letter or drop by the office Our address 45 Street Georgetown On tario L7G All letters must be signed Please include your address and telephone number for verifica tion The Herald reserves the right to edit letters due to space 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