Archived Articles 1998 - December

Bill 59 was introduced effective November 1, 1996. About 6 weeks later the Ontario Insurance Commission issued its requirements and reasons for the OPCF 47- "Agreement not to rely on SOBS Priority of Payment Rules". The late introduction of this endorsement led to the misunderstanding of its purpose and where it is required.

Section 268 of the Insurance Act applies to situations where an accident occurs involving a named insured, a dependant of the named insured or spouse, or a specified driver of the insured auto and where there is more than one policy in effect. The literal application of this section would apply if, for example, there were three cars in the household; two vehicles insured and owned by the husband and wife and the third vehicle owned by the son. Under Section 268 if the father purchased Optional Benefits on his policy and was injured in the son's auto, the optional benefits would not apply for the father.

It was the intention of the Ontario Automobile Rate Stability Act (Bill 59) that Optional Accident Benefits are to be purchased on one vehicle and apply to any vehicle in which the insured is either driving or a passenger. Obviously, there is a conflict between the intentions of Bi1159 and Section 268 of the Insurance Act!

This required the introduction of OPCF 47, which corrected the situation by allowing the father, in the above example, to claim for both the basic Accident Benefits and the Optional Accident Benefits that he has purchased from his insurer.

The Ontario Insurance Commission by way ofits bulletin dated December 9, 1996 require that this endorsement must be provided without charge to every policyholder who purchases optional statutory accident benefits and must be shown on the Certificate of Automobile Insurance as evidence of coverage.

If you are effecting a policy with any Optional Accident Benefits it is required that you also request that the OPCF 47 be added. If a mid term change adds any Optional Benefits similarly the OPCF 47 must be added at the same time. Remember, this applies to any Optional Benefit such as Increased Income Replacement, Caregiver, Medical, Rehab & Attendant Care, Death & Funeral and Indexation.

Some insurers are not attaching or indicating the OPCF 47 on the Certificate of Insurance. From the broker's perspective, you will be in a better position from an E & O claim if you can produce an application or memo requesting this endorsement. If an insurer does not respond to issue any policies with an OPCF 47, the broker should correspond with that insurer and confirm in writing that the insurer is reading in the provisions as required by the Ontario Insurance Commission with regard to the OPCF 47 -- Agreement Not to rely on SABS Priority of Payment Rules.

As mentioned in my previous article, the Automobile Committee is recommending that the Insurance Act be changed to correct the problem at the source. If the Insurance Act is amended to correct this problem, the OPCF 47 will disappear.