OTA takes insurance concerns to Queen’s Park

TORONTO, (Aug. 8, 2003) — The Ontario Trucking Association is making sure both the governing Ontario Tories and poll-leading Liberal opposition include insurance reforms for trucking in their upcoming election campaigns.

Skyrocketing automobile insurance rates is becoming an important election issue for both parties. However, the OTA says such interest in the problem hasn’t necessarily translated into concern for the trucking industry, and the association wants commercial vehicle insurance reforms to be considered as well.

While the OTA is distancing itself from some calls demanding a government-run insurance scheme or regulated insurance premiums, it is lobbying for tort reform designed to moderate the dollars that are being paid out in claims. Among the issues raised by OTA was the need to: Eliminate the loss transfer provision for collisions involving commercial vehicles and other types of vehicles; limit a carrier’s liability for costs to the extent to which they are found to be responsible for causing a collision; and, allow the deductibility for tax purposes of self-insurance reserves.

One of OTA’s main criticisms of the industry is that the current no-fault insurance system does not exist where a truck and a car are involved in a collision. Instead, the carrier’s insurance company must pay the amount of any claim on the part of the car driver that exceeds a threshold of $2,000 — regardless of the extent to which the carrier is responsible for causing the collision. In addition, the current regime in Ontario still allows parties to seek damages in cases of personal injury, and in the case of car-truck collisions the courts have had a tendency to assign a greater share of the costs to carrier insurance policies — taking the position that a carrier is more able to pay (the so called “deep pocket” theory). The OTA insists this ‘deep pockets” approach is patently unfair to the trucking industry, and the government’s tort reform package should include a limitation on the carrier’s liability up to the extent that it was negligent.

In recent meetings with government officials, the OTA also expressed concerns over the lack of competition in the insurance market and sky-rocketing premiums are leading companies to take on higher levels of self-insurance, thereby forcing them to set up reserves in the years when their claims are low. However, tax law does not allow deductibility of reasonable reserves. “Consequently,” the OTA said in a press release, “carriers face the choice of increased administrative costs to implement legal structures such as ‘captive’ insurance schemes, or they may be forced to reduce coverage which is not in society’s best interest.”

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