Claims Canada June/July 2013

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June/July 2013

Cyber Specter

Official Journal of the Canadian Indeépendent Adjusters’ Association

It’s not a question of if, but when a cyber-breach will occur

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• first notice FN Ontario budget proposes changes to rate-filing process, regulation to reach 15 per cent reduction target The Ontario Liberal government’s budget outlines potential changes to the rate filing process, the return-on-equity benchmark for insurers and measures aimed at addressing fraud — all part of the larger target of a 15 per cent average reduction in auto insurance premiums. It was released on May 2.

Earlier in the week, the government announced it would introduce legislation and amendments aimed at making the 15 per cent average reduction for Ontario drivers, using a figure the provincial NDP said the government would need to meet to have its budget supported and avoid an election.

The budget included more details on how the government plans to meet that target, with Finance Minister Charles Sousa calling high costs in the auto insurance system “a drag on our economy.”

The timeline for premium cut is still unclear, with the budget document citing the change will be made “within a period of time to be prescribed by regulation,” which would be set out in the government’s future legislation.

In a press conference, Sousa said the timeline is dependent upon how quickly the budget measures are passed, but that changes would begin within a year.

If the government’s legislation is passed, insurers would be required to offer lower premiums to drivers with safe driving records, but the budget didn’t include specifics on how much lower the premiums would need to be, or when insurers would have to make their changes.

Budget measures would “give FSCO some teeth”: Sousa If passed, the government’s plan would also see the Superintendent of Financial Institutions having the authority to call on insurers to file their rates, rather than having to wait for insurers to come forward to propose changes to their rates.

The government also said its legislation would “call on” the Financial Services Commission of Ontario (FSCO) to reduce

the return-on-equity (ROE) benchmark used for rate filings, which currently stands at 12 per cent. The government has not yet said how much lower the benchmark should be or the timeline for the change.

New “expert” reports on costs, dispute resolution system Citing the goal of increasing accountability and transparency, the budget calls for “a new independent annual report by outside experts” to examine the effect previous reforms have had on costs and premiums. The report would also look at industry costs and premiums and would need to include recommendations for further steps needed to meet the 15 per cent average reduction target. It isn’t clear yet when the report would be expected.

The government’s plan would also see FSCO consolidating its statutory auto insurance reviews. Currently, FSCO conducts a two-year review of the Statutory Accident Benefits Schedule (SABS), a three-year review of the rates and classifications system and a five-year review of the auto insurance system generally. The change outlined in the budget would see FSCO providing one consolidated review, although the period for the reviews to be conducted hasn’t yet been outlined.

In terms of dispute resolution (the mediation and arbitration backlog), the government said it plans to appoint an “expert” to review the system and propose amendments this fall, although it wasn’t specific about who that expert would be.

The government’s plan would also call on the regulator to provide an interim report this year on the progress of the Minor Injury Treatment Protocol project.

Regulation coming for health clinics?

Unsurprisingly, the budget document also included antifraud provisions, including expanding the Superintendent’s “investigation and enforcement authority” over fraud prevention, a recommendation made in the Auto Insurance AntiFraud Task Force’s final report last November.

If passed, the government’s legislation would allow FSCO to regulate health clinics and other practitioners that invoice auto insurers, also a recommendation originally laid out in the task force’s report.

“Further study” will be conducted for CAT impairment, towing industry changes The budget did not include specifics on amending the catastrophic impairment definition in the SABS, or a plan to potentially regulate the towing industry, both controversial aspects of Ontario’s auto insurance system. Rather, the government said it will “conduct further study and consultation” on those issues and other potential cost-reducing initiatives.

The Auto Insurance Anti-Fraud Task Force’s report did call for more regulation of the towing industry, and the issue was touched on during recent hearings on auto insurance held by the Standing Committee on General Government, which includes members of provincial parliament from all parties. l

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Winmar signs contract With symbility solutions inc.

Left to right: Paul Wormith - Winmar Co-Founder & CEO, John Burega - Symbility Sr. VP Sales & Marketing, John White - Winmar Co-Founder & President, James R. Swayze - Symbility CEO, Lyne Mercier - Symbility Regional VP Sales Canada, Tom Brodhurst - Winmar Executive Vice President, Glenn Woolfrey Winmar Executive VP Corporate Operations

www.winmar.ca

Winmar Franchise Corp., a London, Ontario-based to be one of the estimating platforms that Winmar has independently owned and operated property restora- chosen for their large network of offices across the tion company with over 85 offices across Canada, country.” is pleased to announce that “Winmar has been in business they have signed a multi-year since 1977, with offices spanagreement to integrate Symbilning from St. John’s, Newity Solutions Inc. ® (TSX.V: SY; foundland to Victoria, British OTCQX: ATBEF), a provider of Columbia. Our partnership with cloud-based smartphone/tabSymbility enables our franlet-enabled claims technology chises to collaborate on the that uses one of the most commost innovative cloud-based prehensive data for the property platform in the market and John White & James R. Swayze and casualty insurance industry will enable us to provide our into its daily operations. valued customers an alterna“It is with great pleasure that we welcome Winmar, one tive choice in the software we use to estimate their of the leaders in the restoration industry in Canada, claims,” comments John White, President/Founder, and their franchise owners to our valued and growing Winmar Franchise Corp. “We look forward to a succlient base,” said James Swayze, CEO, Symbility Solu- cessful, long-term relationship with Symbility Solutions. “Symbility is committed to supporting contractor tions as we continue to expand the way we service networks and restoration companies and we are proud our customers.”

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• first notice FN New Brunswick’s higher cap for minor auto collision injuries to take effect July 1 The pain and suffering damages cap for people suffering minor personal injuries in auto collisions in New Brunswick will be increased this summer.

The new cap of $7,500 (up from $2,500) will take effect on July 1, the province’s Justice Minister and Attorney General Marie-Claude Blais announced in the legislative assembly on May 8.

Beginning Jan. 1, 2015 the maximum amount will increase annually in accordance with the Consumer Price Index for New Brunswick.

Along with those changes, the definition of “minor personal injury” has also been updated in the province’s Insurance Act. Insurance Bureau of Canada (IBC) said the industry is committed to working with the provincial government on implementing the changes. “IBC will work with the government and the insurance industry to ensure smooth

implementation of the changes to the minor injury damages cap for New Brunswickers,” IBC said.

“A sustainable and stable auto insurance system must strike a balance between providing adequate benefits for the few people who make claims and affordable premiums for everyone who drives,” Steve Olmstead, manager of government relations with IBC, commented.

“The government’s decision to increase the minor injury cap changes that balance to provide more benefits that we hope will serve to benefit New Brunswick drivers,” he added. “We know that caps can work, and that caps are a fair and reasonable way to control claims costs and deliver affordable premiums for consumers.”

The previous $2,500 cap was implemented in 2003. An Auto Insurance

Working Group was formed in 2011 to address the cap on personal injury awards, and in November of that year, the group released its final report. Its recommendations included proposed changes to the minor personal injury definition and increasing the personal injury award cap to between $4,000 and $6,000.

The provincial government tabled its own recommendations, in June 2012, based on the working group’s report. It proposed increasing the cap to $7,500, more than the working group’s proposal, but on par with the cap in Nova Scotia.

The government also asked for public and stakeholder feedback on the amendments following its proposed changes in June 2012, and again earlier this year. l

Defined policies key when using social media in investigations: police constable It is imperative that a company has a social media policy to reference when conducting investigations, stresses Constable Richard Gadreau, social media officer with the Niagara Regional Police Service.

More than one-third of insurance companies who use social media in any capacity don’t have a social media strategy, he said, speaking at the 2013 Ontario Insurance Adjusters Association’s Provincial Conference, held by the group’s Niagara Falls chapter.

The reason for not having a policy in place is two-fold, Gadreau said: top management doesn’t support its usage, and there is a lack of skill or know-how.

“They don’t have boundaries, they don’t have policies and procedures and how-tos for their company,” Gadreau said. “That’s a bit of a red flag for me, because if you don’t have something that sets out ‘this is how we are going to operate,’ you are setting yourself up for more criticism.”

Social media can play a large role during an investigation, but if the information is not credible, and the case ends up in court, it could be worth nothing.

On the flip side, if a company has a social media policy in place, including a meth6

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od for gathering information from various social media sites, the information can be very advantageous.

“Define the framework by which you are going to conduct your investigations, and how social media is going to be used,” Gadreau noted.

Going through the investigation process, companies must be as transparent as possible, he said. “Open is better,” he added. “If you are not only using it to gather information, but you are also using it to share information, it helps your credibility if you come across as being transparent: ‘I will tell you what we do, this is how we conduct our investigations’.”

He also urged his audience not to forget that social media is all about information sharing and to use that to their advantage. Connect with companies, investigators and clients to widen the social network — and by default the availability of information, he said.

The top two network sites to join, Gadreau said, are Facebook and Twitter. Unlike with Facebook, one does not need to be accepted as a friend to view

Tweets — which are often posted in real time.

Gadreau offered up some other tips when conducting investigations using social media: • Don’t expect a smoking gun. Sometimes it’s more often what a person isn’t saying, than what they are saying.

• Look at a person’s digital shadow (any bit of information about a person found online). What are they putting out there? Who are their friends, contacts and associations?

• Look at friends and family members.

The person being investigated might not be saying much, but friends and family might offer up clues.

• Think about who the source of information might be. A neighbour? A coworker?

“Information solves crimes,” Gadreau said. “The information is out there for us to put together and sometimes the important part is not what you see as a total, but the ability to connect the dots.”

“Remember too: little things, little comments might not be significant at the time, but collect that information . . . it might be important down the road,” he said. “Keep good quality notes and quality reports. You need to be able to define how you are doing social media investigations.” l www.claimscanada.ca

13-06-25 9:25 AM

Every file is different

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In addition to natural case differences, regional rules and nuances often come to bear and shape outcomes.

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• first notice FN Over-inflated charges for assistive devices costing insurance industry Implementing standard pricing for assistive devices could save the insurance industry a substantial amount of money, suggests Constable Glen Morash of the Major Fraud Bureau with Peel Regional Police.

Morash was speaking at ISB Canada’s ISB-U Education Series event, in Milton, Ont. on April 11.

While investing MVA clinics during a fraud investigation, he said he noticed a number of patients were receiving household assistive devices paid for by the insurance companies. The devices were all standard items that claims adjusters see regularly, including lightweight vacuums, shoehorns, ergodynamic devices.

However, when Morash looked into it further, he found that clinics were charging insurers $149 for a lightweight vacuum, which in reality was a Swiffer that retails for $34.99. To boot, the clinics would be getting the “vacuum” at a

wholesale cost, making the profit even higher for them.

Long shoe horns were being billed at $29.99, with a wholesale cost of $2.99, hot and cold packs were being billed for $20, when they cost $1.99 retail, and so forth.

“You do that with over 60 patients in one clinic in a six month period and it becomes a large dollar fraud,” he said. “But I can’t even really call it fraud because it is accepted by the industry.”

“If the clinic is willing to charge you that and you are willing to pay it, then it is your loss,” Morash said.

“We can’t even charge them with fraud for that, unless they come out and tell you it’s something else.”

Paul Aquino Publisher (416) 510-6788 paul@canadianunderwriter.ca

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Christine Giovis Advertising Sales Representative (416) 510-5114 christine@canadianunderwriter.ca

Laura Kupcis Editor (416) 510-5215 laura@claimscanada.ca

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Mike Wells Account Manager (416) 510-5122 mike@canadianunderwriter.ca

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Subscription inquiries (416) 442-5600 • 1-800-668-2374 Fax: (416)Indeépendent 442-2191 Official Journal of the Canadian Adjusters’ Association

www.claimscanada.ca Produced by the publishers of Canadian Underwriter magazine

A bi-monthly magazine (6x per year), Claims Canada is published by BIG Magazines LP, a div. of Glacier BIG Holdings Company Ltd. Business Information Group is located at: 80 Valleybrook Drive, Toronto, ON, M3B 2S9.

Claims Canada magazine is the Official Publication of the Canadian Independent Adjusters’ Association [CIAA] and through its editorial content and circulation brings together the ‘entire property & casualty insurance claims market nationally’ with information and insight into the profession, business and people of insurance claims and loss adjusting.

All key claims process stakeholders are reached as part of our readership community – including: both CIAA member and non-member independent claims adjusting firms; insurance and reinsurance company executive, claims management

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The description of the product in question is so vague that there was nothing the fraud department could do. “It is all just pure profit for the clinic at a cost to you guys,” he said.

The industry is not looking into these charges because they fall under the threshold of care for the industry — and they are small ticket items that appear once per claimant. The concern is higher price point items, which are claimed frequently over a number of visits over a longer period. “When you start adding it up over and over again, it is a lot of money to them, when it could be a savings to you guys,” Morash said.

He suggested that the industry should implement a standard pricing on these devices to help save costs. l

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Gary White Production Manager (416) 510-6760

and claims adjusting personnel; corporate risk managers and loss control professionals; insurance brokers; insurance law firms; forensic engineers and accountants; appraisal, restoration, rehabilitation and collision repair professionals; Insurance Institute chapters; insurance associations, regulators and related claims market recipients.

The contents of this publication may not be reproduced or transmitted in any form, either in part or in full, without the written consent of the copyright owner. Nor may any part of this publication be stored in a retrieval system of any nature without prior written consent.

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13-06-25 9:25 AM

“You’re hired.”

Two words that can change someone’s life forever.

How you can help...

CRDN - Certified Restoration Drycleaning Network is challenging insurance professionals in the GTA to donate gently-used clothing and business attire, in support of Dress for Success Toronto, to benefit disadvantaged women seeking gainful employment.

This year’s event will take place September 16-27. Bag pick-up and cleaning services provided by CRDN of Greater Toronto.

CRDN of Greater Toronto www.crdn.ca

To promote this year’s clothing and suit drive in your office, contact CRDN of Greater Toronto prior to August 1 to request a donation bag and information kit.

(416) 533-2736 | toronto.custserv@crdn.com In recognition of your valued support, all participating companies will be published in Claims Canada Magazine and Canadian Underwriter Magazine after the event.

WWW.DRESSFORSUCCESS.ORG/TORONTO

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13-06-12 3:52 PM

Message from the President La Plume du Président JOHN D. SEYLER

I was in New Brunswick to visit our Maritime membership in May. The educational day included an excellent presentation

by Charles Foster and his colleagues of Foster & Company. It was great to see New Brunswick/PEI CIAA Regional President Luc Aucoin and Nova Scotia President Grant King. In addition to being industry leaders, I count them amongst my friends. At these events I am often asked to say a few remarks. Those that know me well, know I am rarely lost for words, but this particular morning I was ready to impress! I was fresh out of the public speaking course at the Ontario Insurance Adjusters Association provincial conference. I was prepared to connect to my audience: I was going to use my hands, I wasn’t going to hold eye contact with some poor attendee to the point of being mistaken for a serial killer, I was going to deliver a compelling message of member benefit and the importance of education. But an hour before arriving, I saw an article about the driverless car by Google and threw my notes out.

The article got me thinking: Do adjusters do enough to keep pace with the advancing technology at the same pace as other professions? For those that haven’t heard of the Google navigated driverless car, it was first revealed in 2010. The technology has now advanced to the point of reliability that three states have passed legislation approving their operation. Five manufacturers, including Mercedes Benz, Audi and Volkswagen will have a driverless car in production in five years.

With the flick of a switch, the car takes over and miraculously responds to rapidly changing traffic conditions. Ironically, the first driverless car crash occurred in August 2011 when it was in manual mode with the human in control at the time of the crash. I asked the group to reflect on the societal and technological changes involving many of us. For example, I recall the choice of smoking or non-smoking on a flight, and the miracle of my first cell phone, which was half the size of my head. I realize that as an adjuster, I had best be open to change and continue to try and advance my craft, or I expect I will be replaced by a smarter, younger version of me.

The driverless car speech posed the question as to how would this affect our industry? The car’s safety systems are said to be foolproof. It easily responds to the car that cuts in front of it by gradually slowing to a safe distance. It responds with robotic efficiency when faced with a hazard in its path. If collisions are reduced by two-thirds or half, what effect can we expect in the claims industry. If the car operates like my laptop or iPhone, I 10 Claims Canada

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En mai, j’étais au Nouveau-Brunswick pour rendre visite à nos membres des Maritimes. La journée de formation incluait une excellente présentation par Charles Foster et ses collègues de Foster & Company. Il était agréable de rencontrer Luc Aucoin, président régional de l’ACEI du Nouveau-Brunswick et de l’Île-du-PrinceÉdouard, et Grant King, président de l’ACEI de la Nouvelle-Écosse.

En plus de les considérer comme chefs de file de l’industrie, je les compte parmi mes amis. Lors de ces événements, on me demande souvent de dire quelques mots. Ceux qui me connaissent bien savent que les mots me manquent rarement. Mais ce matin-là, j’étais prêt à impressionner la galerie. Je venais tout juste de participer à une formation sur la communication orale lors de la réunion à l’extérieur de l’Ontario Insurance Adjusters Association. J’étais prêt à établir un contact avec l’auditoire. J’allais utiliser mes mains.

Je n’allais pas maintenir le contact visuel avec un pauvre participant jusqu’au point où on allait me prendre pour un tueur en série.

J’allais livrer un message convaincant sur les avantages pour les membres et l’importance de l’éducation, mais une heure avant mon arrivée, j’ai lu un article sur la voiture sans conducteur de Google et j’ai jeté mes notes.

L’article m’a fait réfléchir. Est-ce que les experts en sinistres en font suffisamment pour maintenir le pas avec les avancées technologiques au même rythme que les autres professions? Pour ceux qui n’en ont pas entendu parler, la voiture autonome sans conducteur de Google a été dévoilée en 2010. La technologie est maintenant rendue fiable à un tel point que trois états ont adopté des lois qui autorisent son utilisation. Cinq fabricants, incluant Mercedes Benz, Audi et Volkswagen, auront des voitures sans conducteur en production dans cinq ans.

En appuyant simplement sur un bouton, le véhicule prend le contrôle et répond miraculeusement aux variations rapides des conditions routières. Ironiquement, le premier accident de voiture sans conducteur a eu lieu en août 2011. Une personne conduisait le véhicule en mode manuel au moment de l’impact. J’ai demandé au groupe de réfléchir sur les changements sociétaux et technologiques qui touchent beaucoup d’entre nous. Par exemple, je me souviens d’avoir eu à choisir entre un vol fumeur ou non-fumeur et du miracle de mon premier téléphone cellulaire, qui devait faire la moitié de la taille de ma tête. Je réalise que, en tant qu’expert en sinistres, il vaut mieux être ouvert au changement et continuer d’améliorer mon art. Sinon, je dois m’attendre à être remplacé par une personne plus jeune et plus intelligente que moi.

La question de la voiture sans conducteur amène à se demander quelle incidence elle aura sur l’industrie. On dit que les systèmes de sécurité du véhicule sont infaillibles. La voiture réagit facilement à un véhicule qui coupe devant elle en ralentissant graduellement jusqu’à atteindre une distance sécuritaire. Elle répond avec l’efficacité d’un robot lorsqu’un danger surgit sur sa route.

Si le nombre de collisions diminue de deux tiers ou de la moitié, www.claimscanada.ca

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am sure those driver-related collisions would be replaced by the inevitable computer crash or freeze up. How will the auto policy respond to “no one” driving? Statutory regulations in place will have to provide some protection against manufacturers who will rapidly become a target for litigation for every routine collision.

Keeping up with technology is a costly venture. Knowing where to invest financial resources is a challenge for our national members as well as small member firms. No one wants to get stuck with the proverbial Beta VCR. We can always improve systems and look for efficiencies, but fundamentally we are in a customer service industry, which should never seek to eliminate the personal contact for an app or process.

At the CIAA National convention in September 2013, at the Banff Springs Hotel in Banff, the keynote speaker will be Jeff Mowat, who will focus on the customer service aspect of our business while the education program will address the technical side. The balanced approach is not unlike my personal approach to the advancing technology. Embrace it, utilize it, but in harmony with customer service. Honestly, I can’t wait until the day when I can snooze on the way to the office or tell Siri where my appointment is and let her do the driving. n

quels effets pouvons-nous nous attendre d’observer sur l’industrie des assurances? Si la voiture fonctionne comme mon ordinateur portable ou mon iPhone, je suis persuadé que les collisions provoquées par les conducteurs cèderont la place aux inévitables cas d’ordinateurs qui plantent ou qui gèlent. Comment la politique en matière d’automobiles répondra-t-elle à la conduite « sans conducteur »? Les règlements en place devront fournir une certaine protection contre les fabricants, qui deviendront rapidement la cible de litige pour chaque collision de routine.

Maintenir le rythme de l’évolution de la technologie est une aventure coûteuse. Savoir où investir ses ressources financières est un défi pour nos membres à l’échelle nationale, ainsi que pour les petits cabinets membres. Personne ne veut se retrouver coincé avec ce bon vieux magnétoscope à cassettes Beta. Nous pouvons toujours améliorer les systèmes et tenter d’accroître l’efficacité, mais fondamentalement, nous appartenons à une industrie de service à la clientèle qui ne doit jamais chercher à éliminer les contacts personnels au profit d’une application ou d’un processus. À l’occasion du congrès national de l’ACEI, qui aura lieu en septembre 2013 à l’hôtel Banff Springs à Banff, le conférencier d’honneur sera Jeff Mowat. Il abordera l’aspect service à la clientèle de notre industrie. Pour sa part, le programme de formation aura pour thème le côté technique de l’industrie. En matière de progrès technologiques, mon approche personnelle vise l’équilibre. Adoptez et utilisez la technologie, mais faites-le en harmonie avec le service à la clientèle. En toute honnêteté, j’attends avec impatience le jour où je pourrai faire une sieste sur le chemin du bureau ou dire à Siri où est mon rendez-vous et la laisser conduire. n

NATIONAL EXECUTIVE 2012-2013 2011-2011 PRESIDENT John D. Seyler, CIP ProFormance Group Inc. 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 • Fax: (905) 238-2735 E-mail: jseyler@prospecialty.ca 1ST VICE-PRESIDENT Marie C. Gallagher, FCIP, CRM Granite Claims Solutions 71 King Street, Suite 204 St. Catharines, ON L2R 3H7 Phone: (905) 984-8282 • Fax: (905) 984-8290 E-mail: marie.gallagher@graniteclaims.com 2ND VICE-PRESIDENT E. Grant King, BA, B.Ed., CIP Crawford & Company (Canada) Inc. 120 – 237 Brownlow Avenue Dartmouth, NS B3B 2C7 Phone: (902) 468-7787 • Fax: (902) 468-5822 E-mail: Grant.King@crawco.ca SECRETARY Paul Hancock, B.Sc., CIP Crawford & Company (Canada) Inc. 300 – 123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 867-1188 Fax: (416) 867-1925 E-mail: Paul.Hancock@crawco.ca

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TREASURER Russell Fitzgerald, CIP Kernaghan Adjusters Limited 203 – 4246 97 Street N.W. Edmonton, AB T6E 5Z9 Phone: (780) 488-2371 Fax: (780) 488-0243 E-mail: rfitzgerald@kernaghan.com

DIRECTOR James B. Eso, BA, CIP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca

PAST-PRESIDENT Greg G. Merrithew, CIP, FIFAA Arctic West Adjusters Ltd. 201 – 5204 – 50 Ave. Yellowknife, NT X1A 1E2 Phone: (867) 920-2212 Fax: (867) 873-2244 E-mail: gregm@arcticwest.ca

DIRECTOR John Jones, BA Granite Claims Solutions Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: john.jones@graniteclaims.com

EXECUTIVE DIRECTOR Patricia M. Battle Canadian Independent Adjusters’ Association/ L’Association Canadienne des Experts Indépendants Centennial Centre, 5401 Eglinton Avenue West, Suite 100 Etobicoke, ON M9C 5K6 Phone: (416) 621-6222 Toll Free: 1-877-255-5589 Fax: (416) 621-7776 E-mail: pbattle@ciaa-adjusters.ca

DIRECTOR Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 3550 Victoria Park Ave., Suite 301 Toronto, ON M2H 2N5 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com

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• cover story

Cyber Specter

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When it comes to cyber attacks, it is not a question of if, but when, a breach will occur. The acceptance of cyber insurance as necessary coverage is likely to increase, as more companies realize it is an essential component to the cyber security solution.

BY LAURA KUPCIS

A

s the frequency of targeted attacks continues to rise, there might be a misplaced confidence in IT departments to be able to protect businesses against cyber attacks.

“I suspect that if you were to survey businesses that had made a decision not to either put their mind to the risk exposure, try to quantify it and try to manage it, or as part of that analysis purchase insurance, a large number of them would suggest that the reason they haven’t done so is they have confidence in their IT,” Mario Fiorino, senior counsel with Insurance Bureau of Canada, said. “They have confidence that their IT controls are robust enough and that they are not vulnerable to penetration or to being attacked. I think there is a confidence, maybe a misplaced confidence or overconfidence, in their IT controls.”

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But, the evidence has shown, no matter how robust IT security is, there are still vulnerabilities that can result in a loss, Kevin Kalinich, global practice leader for cyber insurance with Aon Risk Solutions, said.

There was a 42 per cent surge last year alone in targeted attacks as compared to 2011, according to Symantec Corp.’s Internet Security Threat Report, Volume 18. A whopping 31 per cent of these attacks were on small businesses with fewer than 250 employees — a sector that may feel immune to targeted attacks, Symantec reports. Symantec has established comprehensive sources of internet threat data through the Symantec Global Intelligence Network, which is comprised of roughly 69 million attack sensors and records thousands of events per second. The network monitors threat activity in more than 157 countries and territories.

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While it is imperative to have multiple layers and multiple walls, and to have confidence in a company’s IT system, the reality of it is, just like a burglary, if someone is determined to get in, they are going to get in, there is no way to completely prevent that.

Small businesses seem to assume that they are immune to attacks, based on surveys conducted by Symantec. However, this is not the case.

Any business, no matter the size, is a potential target for attackers. “Money stolen from a small business is as easy to spend as money stolen from a large business,” Symantec writes in its report. “And while small businesses may assume that they have nothing a targeted attacker would want to steal, they forget that they retain customer information, create intellectual property, and keep money in the bank.

While it can be argued that the rewards of attacking a small business are less than what can be gained from a large enterprise, this is more than compensated by the fact that many small companies are typically less careful in their cyberdefenses. Criminal activity is often driven by crimes of opportunity. With cybercrimes, that opportunity appears to be with small business.”

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In fact, the threat caused by a small business’ lack of adequate security practices affects everyone. Hackers who can’t breach the defenses of a larger business will attack a smaller business that has a relationship with the real target, using it as a way to get into the larger one, Symantec reports.

Interestingly, while many would assume that the financial and government sectors would be the most targeted for a cyber attack, it is, in fact, the manufacturing sector, according to Symantec. In 2012, the manufacturing sector saw 24 per cent of all targeted attacks, up from 15 per cent in 2011. The government and public sector organizations saw a drop in attacks in 2012, from 25 per cent in 2011, to 12 per cent last year.

“The targets of cyber risk really include everyone — the attacks are, more often than not, indiscriminating and random,” Pat Van Bakel, COO at Crawford & Company (Canada) Inc., said. “The methods of attack are

dynamic and evolving and therefore the mitigation and defense strategies need to keep pace.”

While it is imperative to have multiple layers and multiple walls, and to have confidence in a company’s IT system, the reality of it is, just like a burglary, if someone is determined to get in, they are going to get in, there is no way to completely prevent that, Dale Avis, CIO, Crawford & Company (Canada) Inc. said. The key is to ensure that in the event of a breach, there is a plan in place to handle that.

Available insurance coverage “Cyber insurance is probably the fastest growing area of availability of insurance coverage in Canada and North America, if not the world,” Mike Petersen, communications, media and technology practice leader with Marsh Canada Ltd., said. “What began as an offering with a small number of underwriters in 19992000 in and around Y2K has reached www.claimscanada.ca

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the point where here in Canada there are in excess of 25 underwriters with a stated theoretical capacity of over $300 million for Canadian admitted paper.”

Coverage is available in the Canadian marketplace in varying degrees.

Some markets have produced separate standalone cyber policies covering a wide range of exposures, such as privacy or data breach consulting services, notification expense reimbursement, forensic investigation expenses, crisis management services, etc., Dave MacDonald, assistant vice president, ProFin, global specialty lines with RSA, said. Many other markets created cyber endorsements, which provide a more limited scope of cyber coverage, attaching it to a D&O and/or an E&O policy.

As global awareness of cyber risks becomes more evident, Canadian markets are gearing up in establishing their coverage solutions to meet their client’s local and foreign needs.

Petersen notes that at his firm, they break network security and privacy into seven different items: 1. privacy liability 2. network security liability 3. cyber extortion 4. regulatory defense 5. crisis management 6. property loss 7. business interruption Typically the coverage includes various first party losses, including the loss of a business’ own data or a business interruption loss, and third party liability.

The difficulty, however, is that there is no uniformity in the wording or in the coverage, because it is such an emerging area. “Consumers will have to be very careful working with their respected advisors to make sure that they have the appropriate coverage,” Fiorino said.

Cyber exposures are, at best, not well understood by most people, MacDonald said. “There very well could be an understanding or misunderstanding that they’re fully protected from cyber attacks within their other insurance policies, such as CGL, D&O, and E&O,” he added. “To 16 Claims Canada

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some extent, certain cyber exposures could be partially protected through these other liability policies, depending on the cyber circumstances and the actual coverage within these other policies. But for sure they would not be fully covered for all types of cyber issues.”

While Sean Forgie, executive general adjuster, national director of casualty/liability with the commercial risk division at Cunningham Lindsey, hasn’t handled a large volume of cyber claims, he says he has dealt with

Those companies most at risk, such as those with valuable IP, financial data, ecommerce requirement, etc are likely to have great interest in the cyber security product.

a number of claims on a CGL-type basis, where the gap in coverage is exposed. “Something has happened, information has gotten out there, and you are realizing there isn’t coverage for this under the normal insurance program.

“These claims can be very complex to handle, and if you don’t have underlying coverage under your general liability policy, paying the appropriate experts to handle this could be as large as the potential exposure of the claim,” Forgie addes.

Current take-up Because many entities had the mistaken belief they had coverage under their property or general liability policies, there was little take-up on cyber insurance.

“What happens is the legacy policies might not have specifically excluded the coverage for cyber exposures, but they didn’t specifically include it, because they just didn’t think about it,” Kalinich said. “We didn’t have social media, we didn’t have mobile devices, we didn’t have ‘bring your own device to work,’ we didn’t have cloud computing, we didn’t have big data just five or 10 years ago, so we didn’t have those exposures accounted for in the policies.”

Despite the increase in cyber attacks, many companies still feel they are immune.

“Some companies are going to take the approach that our internal security is good enough, that we don’t feel that we have a risk there that we are willing to pay the cost to the insurance,” Avis said. “Other ones are going to say that there is a huge potential risk there, that if there is a breach we need some coverage. You can get into a strategy where a business would only insure a high end, like an excess liability type coverage, then self-insure the smaller stuff. Then, if there was a huge breach, a business would have the high end covered off through insurance and transferring of risk strategy, especially around the low frequency, high severity and impact type claims.”

Large international companies, especially those with US exposures, are more apt to consider buying a cyber policy for their company, MacDonald points out. “They understand they’re exposed to many kinds of cyber attacks which could decimate their brand/image and financially destroy their company,” he said. The dilemma in Canada is that there are only a handful of high profile cases hitting the various media venues, which truly suppresses the need to protect a company and its employees with a cyber policy. “Corporate executives, for the most part, do agree that their compawww.claimscanada.ca

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nies are exposed to various forms of cyber attack, but until they, or their corporate neighbours, encounter an actual cyber intrusion, many businesses are resisting and taking their chances using the old cliché ‘it’ll never happen to us’,” he added.

As the threat to Canadian business increases, the appetite for risk management solutions, including insurance, will increase, John Proctor, vice president of security services with CGI, said. “Generally, Canada lags slightly compared to other countries, but this is true across the whole cyber security/risk mitigation portfolio.”

Those companies most at risk, such as those with valuable IP, financial data, ecommerce requirement, etc are likely to have great interest in the cyber security product.

“Most Canadian companies simply don’t see the need to spend their limited insurance budget dollars on cyber insurance,” MacDonald said.

“Unfortunately, most of these companies will experience some form of cyber attack within the near future, but will be uninsured. It will be a serious wake-up call.”

erty damage and supply chain risks.

There are a number of different ways a company can be targeted in a cyber risk claim. The most common is denial of service, where a hacker will, basically, take possession of hundreds of thousands of computers across the world and attempt to access the same website at the same time.

This shuts the website down, because too many people are trying to access

it at once, John Valeriote, executive general adjuster at Granite Claims Solutions, said. This results in a loss of income, because the business is relying on the website to generate income.

There are also viruses, where a hacker will break into a computer and place a virus, which will allow them to break in and steal information. They might steal information and sell it or hold a business hostage for ransom. Finally

Claims As with any new product, it takes some time for enough policies to be in force to actually result in any significant volume of claims. “The exposures are certainly real and are occurring virtually every day,” Van Bakel said. “It ranges from malicious attacks like phishing, malware and spyware that can bring an entire company to its knees in an instant, to more unintentional events like an employee losing a mobile device or a memory stick.”

The risks are two-fold: First party and third party. First party exposures are reputational risk, business continuity, customer retention, as well as direct costs of computer forensics, legal and public relations. Mass data breaches would also create exposure to class action litigation. Third party risks are, for the most part, a result of data breaches, but there are certainly other exposures, such as contract fulfillment and, depending on the nature of the business, could even be propwww.claimscanada.ca

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there is theft of information, where it might not be actual theft of a business’ information, but the client’s information, including credit card information, transaction numbers, etc.

“These are the types of risk that the policies are contemplating,” Valeriote said, “and those are the claims that are evolving out of this.”

One of the key changes is coming to understand the complexity of the risk in a non-traditional insurance area. Actually processing the claim usually requires technical support and advice for the claimant and then deep technical support to assess the reality and the impact of the incident, Proctor said. The challenge in conducting the technical forensics and assessing the claim is not only discovering what happened and what was lost, but assessing the intangibles, such as brand and reputation value, future value of IP, financial impact of a data breach or e-commerce outage. At the same time, the process used for the forensics analysis may have to be legally defensible requiring the technical team to understand chain of evidence and chain of custody requirements.

When adjusting a claim, Valeriote and his team would immediately bring in a law firm to deal with legal issues relating to any stolen information. A public relations firm is brought in to handle any dialogue with the media, which helps clients to feel secure. Finally, an IT firm is brought in to figure out what exactly transpired. “We don’t use the insureds IT people, because they may be in on it,” he said. “When I communicate initially, I never communicate by email, I always call, because I don’t know who has access to the system now; it’s clearly been breached.” The IT firm is brought in to determine how someone was able to access the system, what they did and ultimately assess the damage and determine the best way to repair the breach. Then another IT firm is brought it to actually handle the repair, to ensure that a company is not over-paying for the repair. Throughout the entire process, the independent adjusters would

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be overseeing all the activity and, at the same time, determining what coverage is available and what would be indemnified to the policyholder.

As an adjuster, be aware that you have to plan very early on what you are going to look for as to the cause of the damage and what you are going to do about, Valeriote warns. If a company’s own internal staff starts trying to fix the issue, you are never going to find out the answer. It is not dissimilar from a fire claim, where the location is sealed off and nobody is allowed in until the expert determines

The challenge in conducting the technical forensics and assessing the claim is not only discovering what happened and what was lost, but assessing the intangibles, such as brand and reputation value, future value of IP, financial impact of a data breach or e-commerce outage. a cause. But, most people understand why they cannot enter the location of a fire; they do not always appreciate why they can’t begin rebuilding immediately after a cyber attack. All they recognize is that their business has been compromised and they want to get it back up and running, which could mean deleting files, checking discs, stopping entry. “What I really need to say is ‘don’t do anything for a minute, let me have my expert

come in and see everything and save it and freeze that moment in time to see what has happened’,” Valeriote said. “That communication between you and the insured is vital to explain this has to happen before you continue doing what you are doing because they might delete everything that shows there was a breach, in which case there is no coverage.”

Increasing awareness “I think we will see consumers becoming aware of this issue, both because of the increase in frequency and severity as being reported by the media, and secondly the necessity of the availability of the coverage and its foreseeable consequences will drive brokers to counsel their clients about this particular exposure,” Fiorino said.

Those businesses that do suffer a cyber incident are most likely uninsured and are now very motivated to purchase some form of cyber insurance protection, MacDonald said.

Companies that thought they were insulated from cyber attack or simply didn’t have an exposure, are coming to the realization how widespread cyber risk truly is. “Virtually every company and business is exposed to some for of cyber attack,” he said.

Brokers need to be well armed with what cyber products and coverages exist in Canada in order to better serve their clients, MacDonald stressed. “Clients, with the assistance of their insurance broker, need to better identify where they may be exposed to cyber liabilities and how they can transfer those risks to insurance companies through purchasing a cyber insurance product which meets their needs.”

Like many risk strategies, sometimes the best model is a blended solution, Proctor said. In assessing the required protection, it will be important for the insurance provider to be able to understand the risks associated with cyber coverage, what a reasonable amount of security the insured should have and the constantly changing threat of the cyber environment. 

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Crossroads

Dennis Bymak, principal of All Task Adjusters, has had a flourishing career in independent adjusting. He now has the luxury of deciding whether to continue pursuing claims or retiring.

BY LAURA KUPCIS

L

ike many independent adjusters reaching a certain stage in life, Dennis Bymak is at a crossroads: to carry on adjusting or to retire.

While we seemingly spend our entire careers talking about the freedom of retirement, when push comes to shove, walking away from an industry you have been a part of your entire life, and a career you love, is not an easy task. And this is why Bymak, the principal of All Task Adjusters in Calgary, Alta, is having such a tough time deciding the next step.

Having been in the adjusting world for more than 40 years, Bymak is certainly entrenched in the industry.

Bymak opened All Task Adjusters in 2005, but he is not new to business ownership. He was the principle shareholder of Bymak & Associates, along with two other minor shareholders, in Yorkton, Sask. for 20 years. The company also had a branch office in Dauphin, Man. He sold the company and moved back to Calgary in 1997, at which time he started working for Kernaghan Adjusters. In 2004, the opportunity to do some catastrophe work arose in the Grand Cayman and he jumped at the chance, having benefited from two prior CAT experiences in Kauai, HI and St. Thomas, USVI. Six months later, he returned to Calgary and for the first time in 35 years, he actually took a break from insurance adjusting. For about five months, Bymak could be found doing safety

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work in the oil patch, until a local insurer pulled him back into the fold. In the spring of 2005, there was a large flood south of Calgary in the High River and Okotoks areas of Alberta, at which time Bymak launched All Task Adjusters. “A local (insurer) had called me and said ‘what are you doing’ and I said I was playing around,” Bymak laughs. “He said you’d better put your adjusting cap on because we are really busy, would you like some work.

That’s how All Task started.”

Busier than ever After the 2005 storm-work influx, All Task continued at a pace that suited Bymak’s semi-retirement perceptions. He was billing 700-800 hours a year, enjoying the continuity of a longstanding career, but also with enough free time to enjoy travelling and his other hobbies. Then, in July 2010, Calgary and parts of southern Alberta were pummeled with golf ball-sized hail, resulting in a record amount of insured damage from hailstorms in Canada. Following the storm, which resulted in nearly $400 million in insured damages, Bymak — and All Task Adjusters — saw the two busiest years of his entire career.

At that time, Bymak considered selling All Task Adjusters, but just as he was inundated with claims, so was every other independent adjusting firm that would be interested in acquiring his business. There are always

peaks and valleys in this business, Bymak said, and at that point, no other company had the time to add on the workload of another small business.

Sure enough, the valley came. He has parted ways with one of his main clients, and while he is still in a partnership with another niche client, the availability of claims has diminished.

Choices So here he — and All Task Adjusters — stands: at a crossroad.

If Bymak decides it’s ultimately not time to retire just yet, then he sees his future unfolding in two ways: either ramping up his domestic work or perhaps heading back into catastrophe work again.

As a member of the Canadian Independent Adjusters’ Association (CIAA), he has expressed interest in signing up for the association’s Catastrophe Response Resource (CRR).

The CRR is a way for members of the CIAA to become a part of an insurer’s strategy for catastrophe preparedness. If an insurer does not have a plan in place — or the existing plan is not meeting the insurer’s needs during a catastrophe — they can count on the CIAA to send a call to its members for catastrophe adjusters. Bymak is confident he has the expertise and knowledge to handle any catastrophe claim situation thrown his way.

If All Task Adjusters decides to take on more domestic files, then it

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Dennis Bymak, principal of All Task Adjusters — at a crossroads: to carry on adjusting or retire.

is a matter of going back to marketing the business and taking on new clients. This is a task that shouldn’t prove to be difficult for Bymak, who has a solid reputation in the adjusting field.

He admits, however, that the draw of catastrophe work is stronger right now and his current passion lies with CAT claims. The reason is simply a

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matter of time. CAT work, which has a potentially shorter time commitment, is more conducive to semi-retirement than servicing domestic claims, which requires a commitment year-round.

Making it work These are just some of the challenges — but also positives — to being a one-person operation. On a positive

note, Bymak has the opportunity to make all of the important decisions on which direction he wants to take All Task Adjusters. But at the same time, it is a challenge to do everything alone.

“You are kind of isolated when you are not in an office where there are a dozen claims people talking about new developments in the industry over coffee,” Bymak said. To combat the isolation he is a member of the CIAA, giving some availability to networking with other adjusters at various events, including the CIAA/Canadian Insurance Claims Managers’ Association joint conference.

Taking a vacation can also be tricky, but Bymak has such a credible reputation in the field, that he was able to assure his clients that all open files were in very good condition. While at times he was able to find another independent adjuster in the city to handle new business and work in progress, at other times Bymak would simply have to tell his clients he couldn’t take on any new files while he was out of town. “They were good enough to work with that, so bless their hearts.”

Perhaps it is that All Task Adjusters handles claims in a more personal, service-oriented way. Bymak is always reachable — relying very little on voice mail. This leads clients and insurance claimant’s to feel connected and cared for. Whatever the reasons, it has clearly worked for Bymak, who has been able to run not one, but two successful independent adjusting firms during his accomplished career.

If he decides to continue working in the field of independent adjusting, Bymak and All Task Adjusters will undoubtedly continue providing topnotch, personalized claims handling to its clients.  June/July 2013

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History in the Making

Canada’s largest award of punitive damages against insurers

BY DON MCGARVEY AND TARA ARGENT

The Saskatchewan Court of Queen’s Bench made history when Justice Murray Acton assessed one of the largest punitive damage awards against an insurer in Canadian history this March.

Acton awarded the plaintiff $3,000,000 in punitive damages against Zurich Life Insurance Company Ltd. and a further $1,500,000 against AIG, after the insurers denied the plaintiff ’s long-term disability and regular benefit payments for more than nine years.

As he concluded his lengthy judgment, Acton stated he hoped the award would garner the attention of the insurance industry: “The industry must recognize the destruction and devastation that their actions cause in failing to honour their contractual policy commitments to the individuals insured.”

The decision, which is being appealed, condemned the insurers’ “protracted,” “outrageous,” “reprehensible” and “abhorrent” management of the plaintiff ’s claim in the decade preceding the trial.

The plaintiff, Luciano Branco, worked as a welder for a subsidiary of a Saskatchewan company in Kyrgyzstan.

He injured his foot in the course of his employment in December 1999, with a re-injury in March 2000. Branco ultimately reported his injury to his employer in June 2000.

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sation Board benefits payable in Saskatchewan. Zurich was responsible for his long-term disability.

The Court concluded that both Zurich and AIG’s policies were “peace of mind” contracts, the object of which was to secure a psychological benefit.

On this basis, the Court concluded the plaintiff’s mental distress, caused by a breach of these contracts, was within the reasonable expectation of the parties.

The Court confirmed the goal of punitive damages is deterrence. The blameworthiness of AIG and Zurich’s conduct, and their liability for punitive damages, was assessed against the factors identified by the Supreme Court of Canada in Whiten v. Pilot Insurance Co., when considering awards for punitive and aggravated damages. These factors include: • Whether the conduct was planned and deliberate; • The intent and motive of the defendant; • Whether the defendant persisted in the outrageous conduct over a lengthy period of time; • Whether the defendant concealed or attempted to cover up its misconduct; • The defendant’s awareness of what he or she was doing wrong; • Whether the defendant profited from the misconduct; and • Whether the interest violated by the misconduct was known to be deeply personal to the plaintiff or a thing that was irreplaceable.

The case against AIG AIG failed to pay benefits when due, but for some erratic payments to Branco over several years, until the benefits

were discontinued entirely in December 2004.

The Court found AIG’s failure to pay benefits in a prompt and reasonable manner was a breach of duty of good faith and fair dealing. The Court recognized that the purpose of monthly benefits is to enable those who are disabled to meet the monthly expenses of living. It found AIG’s failure to pay benefits for months or years on end was “malicious and designed to leverage a reduced settlement”.

The Court was exceptionally critical of AIG given the case of Sarchuk v. Alto Construction Ltd. In Sarchuk, the Court awarded punitive damages against AIG in the amount of $60,000 based on the reprehensible actions of the adjuster. Acton recognized the same adjuster in Sarchuk was involved in the plaintiff’s case and employed the “same technique” to the Branco’s claim. Noting this, the Court felt the punitive damage award in Sarchuk was “not sufficient to prevent an immediate reoccurrence of the unacceptable technique.”

In this case, the Court found AIG was aware of how deeply their actions were affecting the well-being of Branco, that the dispute had continued for over nine years, and that Branco’s determination for a fair resolution was the only thing preventing the insurer from profiting from its misconduct.

The Court awarded Branco $1,500,000 in punitive damages against AIG on the basis that: “The goal of punitive damages is deterrence. Insurers must discontinue exploiting the vulnerability of insureds in times of disaster. The court must also consider the fact that previous www.claimscanada.ca

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Varied Facets of a Fire Loss

The key environmental, health and safety considerations in the event of a property fire claim

BY KEITH STEPHEN

The potential hazards to human health resulting from direct exposure to fire and smoke are obvious to us all, but responsible insurance claims professionals should be aware that many other environmental, health and safety concerns don’t arise until after the fire is put out and the assessment and restoration work begins. Specifically, we must be aware of potential concerns regarding indoor air quality for safe work and future occupancy, contamination of firefighting water and resultant impacts to the environment, identification of designated substances and hazardous materials, proper waste disposal and assessment of soot migration to determine the actual extent of damages.

Indoor air quality With fires that affect industrial or commercial facilities, or any buildings which may have a variety of chemicals stored at the property, the potential exists for a hazardous atmosphere to be created as a result of the fire. Although such atmospheric hazards are most pronounced during and shortly following the fire, off-gassing of remaining chemical contaminants and evaporation from wet materials can result in

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lingering air quality impacts. In order to evaluate the level of hazard associated with the indoor atmosphere, a prudent claims professional should require that some level of indoor air quality (IAQ) assessment be completed within the subject building shortly after the scene is released by the Fire Marshall’s office, or sometimes even before, depending on the Fire Marshall’s direction. This would generally involve the use of handheld air monitoring devices to obtain real-time spot measurements of various air quality indicator parameters, such as oxygen, carbon dioxide and monoxide levels, suspended particulate matter, and total volatile organic compounds (TVOCs, among others). The IAQ assessment would confirm whether additional ventilation measures may be required, or whether there may be a contamination source that needs to be addressed (e.g. spilled chemicals) prior to restoration work proceeding or future occupancy.

In addition, the IAQ assessment would assist in the determination of the appropriate level of personal protective equipment required for any personnel entering the structure during the early post-fire stage. Such IAQ monitoring can continue throughout the restoration process in order to identify when personnel protective measures can be

downgraded to avoid unnecessary cost and restrictions.

Contamination of firefighting water In instances where a potential source of contamination is known to be present or was identified on the subject property during the initial scene assessment (e.g. spilled chemicals or the remnants of chemical containers damaged by the fire), it follows that the firefighting water may also end up contaminated as a result. When this water becomes surface runoff and enters the sewer systems or flows overland onto adjacent properties, significant environmental impacts can result. Consideration should be given to the site drainage and sewer infrastructure that could be affected and the potential for off-site migration of contamination as a result of the fire and firefighting activities. Certain storm sewer systems also discharge to nearby watercourses, which could have even more pronounced effects if aquatic life is put at risk as a result. This might involve assessing the water within local catch basins for visual or olfactory evidence of contamination and/or laboratory analysis of water samples to verify concentrations of contaminants of concern in comparison with regulatory standards (e.g. sewer use by-laws). www.claimscanada.ca

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In instances where contamination is identified, further investigation may be warranted to identify the extents of contamination, particularly if the contamination has migrated off the subject property, or it may be appropriate to undertake some level of remediation (e.g. containment and offsite disposal at an approved facility of any residual contaminated water within the subject property and/or catch basins using a vacuum truck). Addressing these concerns early on would ensure that the insurance parties are doing their part to mitigate potential offsite contamination issues on behalf of the insured, and would help to appease regulatory officials (e.g. Ministry of the Environment) and demonstrate due diligence in these regards.

Designated substances and hazardous materials Prior to any demolition or restoration activities in any Canadian province or territory, it is mandatory that the presence of hazardous materials in gen-

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eral (and in most jurisdictions, asbestos in particular) be identified so that appropriate safety and waste handling precautions can be taken.1-13 Generally, it is required that the regulated materials (the specific list of hazardous substances varies by jurisdiction) present within a project area be identified for the purpose of communicating the related hazards to workers and occupants in advance of construction or demolition that may disturb such materials.

Commonly with older buildings, the most significant concern is the presence of asbestos, which was historically used in numerous building materials including floor tiles, window caulking, and plaster. Certain construction materials and finishes for sale are still asbestos-containing today, such as floor tiles and concrete pipes, etc. making it difficult to gauge the risk based on the age of a building alone. In all Canadian jurisdictions, there are provincial/territorial regulations, guidelines, or codes of practice pertaining to the assessment and abatement of asbestos.14-25 Some

jurisdictions require written notification to the regulatory authority prior to undertaking asbestos abatement, and in most jurisdictions, the regulatory authority may conduct surprise inspections of the asbestos abatement work being undertaken. Failure to carry out the abatement work in a safe manner (e.g. in accordance with the applicable regulation, guideline, or code of practice for a given jurisdiction) could result in the demolition/restoration work being suspended (i.e. think costly construction delay) or, even worse, resulting in fines to the project owner and/or contractor. Ironically, the project owner may, in fact, be interpreted as being the adjuster or insurer given that most property owners, especially in residential situations, are unaware of these prerestoration regulatory requirements.

Waste disposal The various types of waste that may be generated during the demolition/ restoration activities would have to be classified and handled in accordance

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with applicable guidelines or regulatory requirements for each jurisdiction.26-37 These regulations or guidelines may include special waste handling requirements for asbestos waste and other hazardous wastes (like leachable lead in old paint, etc.), and generally provide definitions of the various waste types and testing requirements to determine appropriate disposal measures. Claims professionals responding to a fire loss must ensure that the selected restoration contractor is properly managing wastes in accordance with the applicable regulatory requirements, including confirmation that waste haulers and waste disposal locations are appropriate and have the necessary provincial approvals, licenses and permits. The discovery that waste has been mishandled after it has already been dumped at a landfill may have costly repercussions in terms of recovering it for proper disposal.

Soot deposition and migration in structures Soot is a product of incomplete combustion, which occurs when there is insufficient oxygen present to allow a fuel to react without producing by-products. Whereas the charred materials affected by a fire can be easily visually identified, the identification of the presence of loss-related soot on the surfaces of building materials or building contents may require closer examination. To this end, claims professionals would be wise to have a soot migration assessment undertaken in order to better understand the extents of the area affected by loss-related soot deposition, and to most efficiently plan restoration activities. The assessment would help to avoid unnecessary tear-out and cleaning or, even worse, to avoid missing hidden impacts that may require additional work after a claim is resolved. Such an assessment would involve the collection of surface wipe samples for microscopic analysis.

When viewed under a microscope, surface samples containing soot are readily discernible from samples containing dust and other particulate matter due to the differences in particulate colour, morphology and size. In addition, laboratory testing could be conducted in 26 Claims Canada

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order to identify the “chemical fingerprint” of the subject fire to allow for the differentiation of loss-related impacts from other impacts related to normal operations at the subject property or other pre-existing conditions. This additional testing can be pivotal in avoiding unnecessary remedial measures and costs in buildings with high background (pre-existing) soot contamination.

Summary Though it may seem like a daunting task to effectively address these various potential environmental, health and safety concerns, an effective insurance claims professional can manage these duties easily by quickly identifying the key concerns and ensuring that the right resources are brought in early on. Experience shows a basic assessment at the outset of a loss can avoid a multitude of complications and surprise costs later on in the restoration process.  Keith Stephen, B.A.Sc., M.Eng., P.Eng., is an environmental engineer with the forensic engineering firm Giffin Koerth Inc., and has successfully managed dozens of environmental site assessments and site remediation projects, including several for insurers.

1. Section 20.112 of BC Occupational Health and Safety Regulation 2. Sections 34 and 417 of Alberta Occupational Health and Safety Code, 2009 3. Sections 334(1) and 381(1)(a) of Saskatchewan Occupational Health and Safety Regulations, 1996 4. Section 33.4(1)(a)(ii) of Manitoba Workplace Safety and Health Regulation 5. Section 30 of Ontario Occupational Health and Safety Act and Ontario Regulation 490/09 – Designated Substances 6. Section 3.23.3.2 of Quebec Safety Code for the construction industry 7. Section 398(a) of Newfoundland and Labrador Occupational Health and Safety Regulations, 2009 8. Section 157(2) of Nova Scotia Occupational Health and Safety General Regulations 9. Section 157(2) of New Brunswick Occupational Health and Safety General Regulations 10. Section 49.10 of PEI Occupational Health and Safety Act – General Regulations 11. Section 10.56(a) of Yukon Occupational

Health and Safety Regulations 12. Section 2.3 of NWT Guideline for the Management of Waste Asbestos and Section 5 of Asbestos Safety Regulations 13. Section 5 of Nunavut Asbestos Safety Regulations 14. Guideline G6.8 – Procedures for abatement of asbestos materials during house and building renovation of BC Occupational Health and Safety Regulation 15. Alberta Asbestos Abatement Manual, Oct 2012 16. Saskatchewan Guidelines for Managing Asbestos in Buildings 17. Manitoba Guideline for Working with Asbestos 18. Ontario Regulation 278/05 – Designated Substance – Asbestos on Construction Projects and in Building and Repair Operations 19. Section 3.23.7 of Quebec Safety Code for the construction industry 20. Newfoundland and Labrador Asbestos Abatement Regulations, 1998 21. Nova Scotia Code of Practice for Removal of Friable Asbestos-Containing Materials 22. Code of Practice for Working with Materials Containing Asbestos in New Brunswick 23. Section 49 of General Regulations of PEI Occupational Health and Safety Act 24. Section 34 of Yukon Occupational Health Regulations 25. NWT and Nunavut Codes of Practice for Asbestos Abatement 26. BC Regulation 63/88 – Hazardous Waste Regulation 27. Alberta Regulation 192/1996 – Waste Control Regulation 28. The Hazardous Substances and Waste Dangerous Goods Regulation for Saskatchewan 29. Manitoba Regulation 282/87 Classification Criteria for Products, Substances, and Organisms Regulation 30. Ontario Regulation 347/90 – Waste Management 31. Newfoundland and Labrador Guidance Document for Asbestos Waste Disposal and Newfoundland and Labrador Guidance Document for Leachable Toxic Waste, Testing and Disposal 32. Nova Scotia Regulation 56/95 – Dangerous Goods Management Regulation 33. New Brunswick Regulation 2008-54 – Designated Materials Regulation – Clean Environment Act 34. PEI Waste Resource Management Regulations 35. Yukon Special Waste Regulations 36. Guideline for the General Management of Hazardous Waste in NWT 37. Guideline for the General Management of Hazardous Waste in Nunavut www.claimscanada.ca

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NAVIGATE YOUR WAY TO VICTORIA BC ON OCT 6–9 2013 TO DISCOVER THE FUTURE OF RISK MANAGEMENT. The BC Chapter is excited to invite you to a city proud of its rich heritage, historic downtown, gorgeous gardens and parks, and scenic Inner Harbour. It’s the perfect backdrop for this voyage of discovery, chart your course for 2013 RIMS Canada Conference in Victoria, BC. The organizing committee has its sails fully furled as it navigates past the buoys marking the final months. Our program committee is putting together an exciting nautical map with ports of call at ERM, Claims, Legal and Insurance, with 25 concurrent sessions over 6 blocks.

Our exhibit hall is already 75% full; be sure to meet your friends and colleagues on the exhibit hall floor starting on Sunday. Tuesday night’s first port of call is our Rose Compass Reception followed by the Discovery Regatta.

The Convention Centre is connected to the historical Fairmont Hotel overlooking the pictureseque Victoria Inner Harbour. There are six conference hotels, Fairmont Empress Hotel, Marriott Inner Harbour, Hotel Grand Pacific, Executive House, Inn at Laurel Point, Chateau Victoria Hotel & Suites; all accommodations are within walking distance.

Look to our website www.rimscanadaconference.ca for all the latest information. The local organizing committee and all our volunteers look forward to seeing all delegates and industry partners.

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Join other risk and insurance professionals on a voyage of Discovery at the 39th Annual RIMS Canada Conference.

OCTOBER 6–9, 2013 The Victoria Conference Centre

13-04-16 3:23 PM

Quantifying Income Loss

BY MATT MULHOLLAND

Accountants are frequently retained in casualty/bodily injury/personal injury matters to quantify potential income losses. Often the quantification exercise is based on limited information provided by the plaintiff or plaintiff ’s counsel. When the assessment of potential losses of income needs to be made, there is information that should be requested from the plaintiff. Each situation is unique, however, and the information is intended to be general and may not be applicable to every situation.

Before getting into the specifics, it is important to note there are two distinct types of individuals as it relates to personal injury matters: employed individuals and self-employed business owners. The information that needs to be obtained from each type of plaintiff is different.

that are provided by the Canada Revenue Agency (CRA) (#3), as it can be difficult to pinpoint specific sources of income with only the CRA printouts. However, if the detailed tax returns are provided, it is imperative the corresponding Notice of Assessment (#2) is provided as well. The Notice of Assessment serves to confirm that the information contained in the income tax return has been filed with CRA; if the Notice of Assessment (or the CRA printout) is not available, this may be an indication that the income tax return was not actually filed and may not be accurate. Furthermore, the Notice of Assessment will indicate when the assessment occurred, which will confirm the approximate time when the tax return was filed. If it is noticed that the requested pre-accident tax returns were all filed following the accident, this may represent a red flag and further investigation would be warranted.

Employee In terms of employees, a typical information request listing would look as follows: 1. Personal Income Tax Returns (T1), complete with all income related slips including: a. T4 Statement of Remuneration Paid b. T4A Statement of Pension, Retirement, Annuity and Other Income c. T4A(P) Statement of Canada Pension Plan Benefits d. T4A (OAS) Statement of Old Age Security e. T4E Statement of Employment Insurance and Other Benefits 2. Notice of Assessment as provided by the Canada Revenue Agency (CRA) 3. Information Tax Return Information – Regular 4. Pay stubs for where no income tax return has been provided 5. Current union agreement (if employee is unionized) 6. Pension guide (if employee is part of a pension program) 7. Benefit guide (if employee received benefits from their employer) 8. Employment files 9. Disability benefit file (private disability benefits or CPP Disability Benefits) 10. Documentation supporting any Income Replacement Benefits received Typically, this information should be requested for the five years prior to the accident, this would be dependent on the specifics of each case.

Much of what is detailed above is straightforward; however, further discussion is warranted with respect to the first 3 items.

Generally speaking, it is preferable to receive the detailed and completed income tax returns (#1) as opposed to the printouts

Self-employed Self-employed individuals present an additional layer of complexity. A self-employed person generally owns a business and can draw money from their business, either as a dividend, a salary and/or benefits. Ultimately how business owners choose to pay themselves is a matter of tax or financial planning, and does necessarily speak to their economic earnings from the business. It is the results of the company that should be assessed, and not how the owner chooses to transfer money from the business bank accounts to its personal bank account.

When dealing with a self-employed individual there are key questions that need to be addressed which will dictate what information is required: 1. Is the business incorporated or not? If the business is not incorporated, the results of the business will be reported on the T2125 Statement of Business or Professional Activities within the individual’s personal income tax returns. No corporate income tax returns will exist. If the business is incorporated, you will require records of the individual and records of the corporation.

2. How much of the business does the individual own? Frequently, self-employed individuals will own a business jointly with other individuals and, therefore, would only be entitled to the portion of losses related to their portion of ownership. Ownership of the business is outlined on the T2125 Statement of Business or Professional Activities for unincorporated businesses (within the personal income tax return) or Schedule 50 Shareholder Information for incorporated business (within the corporate income tax return).

3. How does the incorporated business owner get paid? The salary drawn or dividends paid by a corporation to the owner is not in itself a measure of the income available to

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the owner from the business, but it does assist in making that determination. Ultimately, the income available to the business owner is the net income earned by the business, plus any salary withdrawn and any other personal expenses that were recorded as corporate expenses.

In terms of self-employed plaintiffs, a typical information request listing would look as follows: 1. Personal Income Tax Returns (T1), complete with all income related slips including: a. T4 Statement of Remuneration Paid b. T4A Statement of Pension, Retirement, Annuity and Other Income c. T4A(P) Statement of Canada Pension Plan Benefits d. T4A (OAS) Statement of Old Age Security e. T4E Statement of Employment Insurance and Other Benefits f. T2125 Statement of Business or Professional Activities 2. Information Tax Return Information – Regular (Personal) 3. Corporate Income Tax Return (T2), complete with all supporting schedules including: a. Schedule 50 – Shareholder Information b. Schedule 125 – Income Statement Information 4. Notice of Assessment as provided by the Canada Revenue Agency (Corporate and Personal) 5. Financial statements (including the Income Statement, Balance Sheet and Cash Flow Statement) 6. Monthly revenue summary/Monthly revenue summary by customer 7. Payroll journal including a copy of all T4 Statement of Remuneration Paid slips issued 8. GST/HST Remittances 9. General ledger 10. Bank statements 11. Sales invoices 12. Disability benefit file (private disability benefits or CPP Disability Benefits)

13. Documentation supporting any Income Replacement Benefits received With respect to specific documents from this list, the monthly revenue summary/monthly revenue summary by customer (#6) is often overlooked. This information is useful in determining when a decline in revenues commenced, or if the decline in revenues relates to the loss of a specific customer that may indicate the decline in income was not accident-related.

GST/HST Remittances (#8) are also useful documents as they serve to validate the sales reported in the income statements of the business. Once again, if the GST/HST Remittances do not reconcile to the income statements, further investigation would be required.

The general ledger (#9) is a listing of all accounting transactions, which occurred over a specific period of time (usually the fiscal year). This document is helpful if further examination of the business expenses is required, such as in cases where significant expense fluctuations occur following the accident.

Bank statements (#10) and sales invoices (#11) are generally requests of last resort, but may be required should other documentation not be available or its review warrants that more detailed review and investigation is required.

Conclusion Different documents are required when dealing with plaintiffs who are employees versus those who are self-employed business owners. A proper analysis of a business owner’s claim for lost income is generally much more complex and document-intensive. The sooner in the litigation process this information is received, the better the likelihood that a fair resolution of the claim can be achieved.  Matt Mulholland is a vice president with Matson, Driscoll & Damico Ltd. (MDD) in Toronto, Ontario. Matt has been involved in a wide variety of commercial insurance and litigation matters and has testified before the Superior Court of Ontario.

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GONE WITH THE WIND? The Impact of Scarlett on the MIG

BY KADEY B.J. SCHULTZ, JASON FROST, AND JOY STOTHERS

Arbitrator John Wilson, of the Financial Services Commission of Ontario (FSCO), released the first decision in consideration of the Minor Injury Guideline (MIG) on Mar. 26, 2013.

Before we consider this decision, however, it is warranted to take a quick look back on what led us to Scarlett. On Sept. 1, 2010, the Statutory Accident Benefits Schedule (SABS) was amended replacing reference to the previous Pre-Approved Framework (PAF) with the MIG. Concerns were immediately raised within the industry questioning the breadth, scope and application of the MIG. Importantly, we must accept that the MIG is a guideline, noting that the legislature did not amend the SABS or Insurance Act itself to incorporate the provisions of that guideline, but have made the MIG an aid to the SABs. By the fall of 2012, it had become clear that even in spite of a lack of clarity as to when the MIG should apply, the financial results for auto insurance in Ontario had turned from a significant loss ratio to a satisfactory profit. From the beginning, the MIG (and removal/ reduction of various benefits from the standard package of coverage) was intended to create “cost certainty” by positioning insurers to have a financially viable product based on the approved premiums.

Absent case law to guide the way, each insurer has had little choice but to handle this Guideline in its own way, all the while asking: Are we doing this right? What does “predominantly minor” mean? How long can this last?

Has Scarlett rendered the MIG gone with the wind?

Facts Lenworth Scarlett suffered soft tissue injuries in a rearend collision on Sept. 18, 2010. He was a passenger in a Belair vehicle that was struck from behind. He was also a recent arrival to Canada, with no OHIP coverage or per30 Claims Canada

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mit to work. Any funding available to him to treat injuries sustained in this loss would have to flow from Belair under the accident benefits coverage. The Belair policy had yet to renew, so the “old” benefits were in place (housekeeping, $100,000 for medical and rehabilitation, $72,000 for attendant care and cost of examinations, which, if funded, would not come out of his med/rehab limits).

Scarlett produced three main reports, all from different specialists, in support of his claim that he suffered injuries that did not fall within the MIG. One was a medical report from dental surgeon Dr. Lewandowski who diagnosed temporo-mandibular joint syndrome (TMJ). The next was a report from Dr. F. Tavazzani, orthopaedic specialist, which indicated that Scarlett demonstrated “depressed affect” and that Scarlett had restricted lumbar range of motion and difficulty transferring positions from standing to sitting and from sitting to standing. Additionally, he produced a report from Dr. Pilowsky, psychologist, who found that Scarlett was suffering from pain disorder, severe depressive symptoms, and chronic symptoms of posttraumatic stress disorder and driver anxiety. Apparently, there was a follow up report from Dr. Pilowsky which responded to the insurer’s own psychological report.

In what appears to be an effort to comply with the requirements of the MIG, to ensure that the evidence provided in support of Scarlett’s claims were “compelling”, Belair arranged for several insurer’s examinations. The conclusion of the assessors was that Scarlett’s injuries fell within the scope of the minor injury definition and the MIG. Belair relied first upon a paper review report from Dr. Crescenzi, a chiropractor, responding to a treatment plan. This assessor concluded that Scarlett’s injuries fell within the MIG on the basis that he sustained soft tissue injuries and there was no evidence of any neurological sequelae.

Next, Scarlett was examined by Dr. Mor, a psychologist.

In the resulting report it was noted that Scarlett reported that he was independent with respect to personal care and denied depression or cognitive difficulties. Scarlett did not www.claimscanada.ca

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express the need for psychological treatment. Although the details of the reports are not apparent from the decision, it seems that Dr. Pilowsky, Scarlett’s treating psychologist, responded to that report challenging the comments and conclusions. As discussed below, it also raised an issue of concern for Wilson that a statement made by Scarlett was subsequently used against him.

Belair also arranged for a paper review report from a dentist, Dr. Ouanounou, who concluded that the file documentation did not provide “compelling substantive objective evidence or subjective claimant complaints to suggest” that the claimant had ongoing concerns regarding TMJ. Wilson’s lack of confidence in paper reviews and the opinions flowing from there is palpable.

Discussion Wilson concluded that the MIG is a “non-binding interpretive aid” and that “compelling medical evidence” must be convincing, on a balance of probabilities.

In essence, the decision found that Belair had not proven on a balance of probabilities that the claimant’s soft tissue whiplash injuries, and other complaints were minor in nature, and stated: While there is no doubt that Mr. Scarlett suffered soft tissue injuries, it is not at all clear that he also did not suffer from any other conditions that were neither soft tissue injuries nor the sequelae thereof, or that the sum of his injuries from the accident were minor in nature.

The reports of chronic pain from Dr. Tavazzani are evidence of symptoms separate from Mr. Scarlett’s soft tissue injuries, presenting as psychological, neurolocognitive and emotional impairment.

Dr. Pilowsky’s reports, taken with the comments of Dr. Tavazzani, provide credible evidence that Mr. Scarlett suffered serious depressive symptoms and PTSD consequent to the accident.

While the Insurer’s reports may disagree with that conclusion, that is the very sort of conflict that is meant to be resolved in court or by arbitration, on the issue of reasonableness of the particular treatment proposed, not by a unilateral veto of benefits by the Insurer.

An intriguing issue that has arisen relates to Wilson’s reference to section 233 of the Insurance Act. This section deals with insurance contracts – the information provided to insurers by applicants to form the basis of the policy and premium determination. It appears, from Wilson’s comments, that in his opinion, based on section 233 of the Act, an insurer could not rely on statements made by an insured claimant to assessors. His reference to section 233 was in the context of whether Scarlett advised Dr. Mor that he was independent with respect to personal care, denied depression or cognitive difficulties, and did not express the need for psychological treatment. Without saying it clearly, one can infer from the decision that Wilson gave little weight to that report and the reported comments of the claimant, preferring to rely on the treating psychologist’s earlier and subsequent reports supporting ongoing psychological sequelae and treatment needs. www.claimscanada.ca

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The concern that naturally arises from this line of commentary is whether other FSCO arbitrators and decision makers will read this to restrict an insurer’s ability to rely on statements made by the claimant to s. 25 and 44 assessors, evidence obtained through examinations under oath, clinical notes and records and even surveillance. If read narrowly, Wilson’s commentary would mean that the only information the insurer can rely upon is the signed OCF-1, OCF-3 and/or the original copies of the OCF-18s or OCF23s.

In review of s. 233(3) we note that it only applies to the “application for a contract” and the other portions of s.

233 only apply when the applicant or insured makes a false claim, misrepresents a material fact or contravenes a term of the contract. None of these requirements are present in this case.

Conclusion Our recommendation is for insurers to continue to consider all relevant information in the file when providing the “medical and any other reasons” for approval, partial approval, or denial of a benefit, keeping in mind the consumer protection intent of this legislation and Wilson’s approach in Scarlett.

Ultimately, he concluded that jaw pain, chronic pain and psychological impairments are “separate and distinct from the soft tissue injuries” and the MIG exclusion did not apply. While many insurers have taken the approach that one must consider whether the impairments as a whole were predominantly minor in nature or whether the sequelae complained of (in Scarlett: jaw pain, chronic pain and depression) flowed from the predominantly minor injuries, this was not Wilson’s approach. The MIG is only a guideline, and before it can be considered all insurers must first look at the language of the medical and rehabilitation benefits sections of the SABS – pay benefits for injuries sustained as a result of the accident.

There is no word yet on whether the decision will be appealed. One might suggest that an appeal of this decision is not in the interest of insurers. As it stands right now, Scarlett is not binding. It is an arbitration decision based on a specific set of facts and evidence. No viva voce evidence was presented. It was a preliminary issue hearing to determine whether Scarlett was precluded from receiving housekeeping, attendant care and other benefits as a result of falling within the MIG. It might be best to let this decision sit, and to continue to develop the case law based on different facts, different experts and a complete hearing.

Some aspects of the decision are both surprising and troubling, while others are as we would, and should, have anticipated. While we now have “the first word” on the MIG, there will be many more words before we are in a position to know whether the MIG is gone with the wind.  Kadey B.J. Schultz, LL.B., L.L.M., is a partner, Jason Frost, LL.B., is an associate and Joy Stothers, LL.B., LL.M., is an associate with Hughes Amys LLP. June/July 2013

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Team Approach

BY DAVID BORTHWICK

For motor vehicle accident (MVA) clients, an essential aspect of achieving an independent lifestyle is a safe and functional home environment that facilitates maximum mobility. While this might seem obvious, depending on a client’s specific post-accident condition, the barriers to independence in their home can be anything but obvious. In most cases, it is necessary to structurally modify the home to remove any barriers that impede mobility and safety — and to add structural enhancements to promote mobility and safety. But in Ontario, how best to meet the Statutory Accident Benefits Schedule (SABS) requirements that home modifications and associated costs be “reasonable and necessary”? The answer is teamwork.

As the Statutory Accident Benefits Schedule Section 16, sub-sections 16.3(i), 16.4 (b) and 16.4(c) stipulates that “an assessment must be completed upon the catastrophically-impaired client’s home in order to establish a quantum value for home modifications. The extent of the home modifications, as well as the associated costs to complete the modifications must be reasonable and necessary.”

There’s no going it alone To effectively assess potential modifications to the pre-accident home requires a long-term view of what is necessary to meet a client’s and their family’s present and future needs.

Whether these modifications can be achieved by renovating the existing home, or by investigating alternative housing options is a central issue.

However, in all cases, the difference between assessing home modifications versus other types of assessments is that it requires a team approach because it requires diverse skill sets. The expertise required to provide a client with a comprehensive assessment doesn’t exist in just one type of professional—it re32 Claims Canada

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quires the combined skills of an occupational therapist and a housing expert.

One professional’s assessment (occupational therapist) without the other professional’s assessment (housing expert) can result in recommendations that are not “reasonable and necessary” — plus there is the potential for significant liability issues. Working in isolation, each professional is not qualified to provide the type of recommendations required to ensure that a client’s specific housing needs are effectively addressed and in keeping with SABS requirements.

A Home Modifications Assessment of the pre-accident or existing residence identifies the adaptive modifications that should be considered, as well as the associated costing to complete the same.

The resulting Home Modifications Report is the basis for making the decision regarding whether to renovate the preaccident/existing home or, alternatively, to explore other housing options.

The occupational therapist Before it’s possible for a client’s home modification needs to be determined, first an occupational therapist (OT) must assess the client’s physical and cognitive abilities and limitations.

The OT scope of practice enables them to determine a client’s post-accident functional status: • An OT is qualified to assess a client to determine what is “necessary” from a functional abilities perspective.

• An OT is not qualified to recommend specific home modifications or associated costing. OT’s are only qualified to provide general recommendations regarding accessibility.

OTs are not qualified to assess structural limitations of a client’s home because they are not trained in architectural design and construction principles (i.e., feasibility of structural modifications, cost estimates, etc.). In addition, OTs are not trained in design standards or building code requirements. If an OT provides structural recommendations, the recommenda-

tions are not necessarily “reasonable and necessary” and there is also liability risk. Overall, the OT, while weighing in on recommendations from a functional perspective, should defer all design and costing to the housing expert.

Do: It is within the OT scope of practice to comment that, for example, “If provided with an appropriate bathroom design, Mr. X will have the functional ability to independently conduct his daily self-care routine.”

Don’t: It is outside the OT scope of practice to recommend specific structural details like “To maximize Mr. X’s functional abilities within the bathroom, consideration should be given to the construction of a second story addition off the home’s rear elevation.”

The housing expert Based on the OT’s functional assessment, which provides a clear understanding of what a can and can’t do, the housing expert can now determine what structural modifications are necessary to maximize function and limit the “can’t do” aspects of a client’s postaccident functional status: • The housing expert is qualified to assess the structural aspects a client’s post-accident home to determine what is “reasonable” from a design, construction, and cost perspective based on the OT’s functional assessment.

• The housing expert is not qualified to assess a client’s functional ability.

Using the OT functional assessment as the foundation, the housing expert — trained in barrier-free design — now assesses to what degree the structural aspects of the home impede or www.claimscanada.ca

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enhance a client’s functional status.

Where the pre-residence structure now poses barriers post-accident, it is up to the housing expert to provide detailed architectural solutions to overcoming these barriers through recommendations that focus on structurally modifying the residence.

Do: It is within the housing expert scope of practice to recommend structural specifications and associated costing, for example, “Based on the functional information provided it appears that Mr. X would benefit from the inclusion of a fully accessible en-suite bathroom. The proposed bathroom design would include a wheel-in shower enclosure, an open access vanity with off-set covered plumbing and a height-adjusted raised toilet.”

Don’t:

specialized in barrier-free design and cost estimating. This not only ensures that the housing expert is qualified regarding accessible design, but also that they carry the right type of liability insurance.

“reasonable and necessary.” And ultimately, teamwork ensures that a client maximizes post-accident abilities in a safe and accessible living environment — while avoiding potential liability risks. 

Don’t settle for one without the other Combined skills is the only way to meeting SABS requirements. The team approach ensures that home modifications and associated costs are

David Borthwick is the president of Accessible Solutions Inc. (ASI): specialists in barrier-free home assessments, design, and construction management for insurers with MVA clients who have suffered mobility and/or cognitive impairments.

Claims Canada Magazine is the only national claims publication COVERING the Canadian market

It is outside the housing expert scope of practice to comment on functional abilities like “Mr. X was observed to experience cognitive fatigue and appears to have deficits that affect his tolerance and ability to perform certain activities.”

No part to play on the team: unqualified professionals To provide a client with the best assessment possible—plus ensure a defensible report and avoid liability risk—assemble a team with these two distinct skill sets: • Check that the OT is registered with the College of Occupational Therapists of Ontario (COTO). As COTO describes, “registration with the College qualifies occupational therapists to use the title ‘Occupational Therapists’ or ‘O.T.’, and the designation ‘OT Reg. (Ont.)’. Registration indicates to the public that their occupational therapist has met entry-topractice requirements, and meets the College’s standards of practice and quality assurance requirements. In addition, it provides the public with a means of recourse, should they receive occupational therapy treatment they feel does not meet professional standards.” (http://www.coto.org/ registration/default.asp) • Housing expert: look for certification as a registered architect or construction engineering professional www.claimscanada.ca

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Claims Canada 33

Official Journal of the Canadian Indeépendent Adjusters’ Association

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The particular activity of the child will also play a role in determining the standard of care. When a child engages in an adult activity, such as driving a car, dirt biking, or snowmobiling, that child will be judged by the purely objective standard that applies to adults.

In McErlean, Justice Robins of the Ontario Court of Appeal stated, [A]s a general rule in determining negligence, children are not required to conform to the standard of conduct which may reasonably be expected of adults. Their conduct is judged by the standard to be expected of children of like age, intelligence and experience.

This is essentially a subjective test which recognizes that the capacities of children are infinitely various and accordingly treats them on an individual basis and, out of a public interest in their welfare and protection, in a more lenient manner than adults ‌There are, however, exceptions to this general rule. Where a child engages in what may be classified as an adult activity, he or she will not be accorded special treatment, and no allowance will be made for his or her immaturity. In those circumstances, the minor will be held to the same standard of care as an adult engaged in the same activity.

Recognizing the distinct legal standards which apply to the subsets of children is key to effective early investigation of the case. If you are dealing with a tortfeasor or claimant of tender age, considerations of culpability in negligence or contributory negligence will not apply.

If you are dealing with a situation, however, that falls within the grey zone, it is essential to fully canvass both the subjective and objective elements at play at the time of the occurrence. Failure to do so may rob you of a potentially effective defence. By the time a claim is advanced to the stage of litigation, and then to trial, several years will likely have passed. Limitation acts in the common law provinces allow for postponement of the limitation period while the plaintiff is a minor. In cases where the claimant is a child, it could be over a decade before an action is even commenced. For this reason, decisive early investigation of www.claimscanada.ca

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the circumstances of the occurrence which specifically includes investigation of the characteristics of the child or children in question, is key to a potentially successful defence of the claim.

Christine practices civil litigation with the law firm Lindsay LLP, primarily in the areas of personal injury, motor vehicle accidents, fire losses and occupiers’ liability. Max R. S. Hufton is a barrister with the law firm Lindsay LLP, primar-

ily involved in the defence of casualty claims. They are both members of Canadian Defence Lawyers. î — 1. McErlean v. Sarel, 1987 CarswellOnt 762 (ONCA), at para. 53 2. [1966] O.J. No. 1082, [1967] 1 O.R. 203 (H.C.J.) (per Grant J.) 3. [1956] S.C.R. 787 at 793, 6 D.L.R. (2d) 1 (S.C.C.) 4. 2006 CarswellOnt 8695 (Ontario Sup. Ct. Justice) 5. 2013 BCSC 607 6. McErlean, at para. 53

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EF

• education forum

A SERIES OF ARTICLES PROVIDED BY THE INSURANCE INSTITUTE OF CANADA

Counting Heads:

Demographics and the Adjuster

A

s you’ve likely heard, demographic factors pose an imminent challenge to Canadian businesses. Most industries are expected to feel a staffing pinch as the large “boomer” segment of the population retires from the workforce. Strategic workforce planning can help independent adjusting firms prepare to face this challenge.

Demographic research from the Insurance Institute of Canada suggests that the labour pinch may be felt strongly in the p&c sector, where up to a maximum of 28 per cent of the current industry workforce – and up to 43 per cent of those at management level – could potentially retire by 2022.

The Institute’s latest research report, A Demographic Analysis of the P&C Industry in Canada 2012–2022, draws on surveys conducted in 2011 and 2012 with employers, employees and HR professionals across Canada’s p&c industry.

The industry’s overall entry-to-exit ratios remain poor: for every person who can potentially leave the industry through retirement, less than one new person enters it. At the same time, demand for the industry’s products and services is expected to increase, resulting in additional pressure to recruit and retain staff.

Claims crunch The research findings suggest that independent adjusting firms will be in the thick of the coming workforce challenges. About one in three of the industry’s employees work in claims 36 Claims Canada

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overall; similarly, one in three of the employees who retired between 2007 and 2012 worked in claims. In addition, some of the highest median ages are seen in claims roles, pointing to a high potential for further retirements over the next 10 years. Based on these trends, the report projects a maximum potential reduction of 29 per cent in claims occupations nationally by 2022.

Claims roles are already facing challenges in both recruitment and retention. From the employers’ perspective, claims staff are among the most difficult and urgent roles to recruit. Roles such as accident benefits adjuster and claims adjuster/examiner tend to require experience, and survey respondents indicated there are too few qualified candidates available. Compensation levels can also be a hindrance in recruiting, as can failing to accommodate work-life balance issues.

Management roles at all levels are another area of concern. Across the industry, front-line managers have a median age of 44; middle managers, 47; senior/executive managers, 50; and the average retirement age is 60. These data point to a high potential for retirement

over the next ten years – one in five employees who retired between 2007 and 2012 were managers.

Among HR professionals surveyed, those employed by independent adjusting firms ranked retention as their most important human resource management issue. Accident benefit adjusters, claims adjusters/examiners and casualty adjusters are all perceived as difficult roles to retain. At the same time, the need to retain people in these roles was perceived as urgent. A high degree of worker mobility within the industry, uncompetitive compensation levels, and poor fit with corporate culture were the most-frequently cited factors making retention difficult in the p&c sector.

Talent tactics Under these circumstances, managing the talent pool will be a critical strategic issue for leaders of independent adjusting firms in coming years.

Leaders will need to be clear about their firms’ strategic talent requirements; and firms will need to focus on recruiting new people to the industry and on retaining and developing current work-

Additional research findings • The industry may see higher levels of retirement over the next ten years as all members of the baby-boomer cohort move past the age of 55.

• Across the industry overall, two-thirds of senior managers are men; and twothirds of senior managers (both male and female) are baby-boomers.

• Claims adjusters have a more balanced age profile and sex profile than other claims roles.

• Casualty adjusters have an older age profile than other claims roles.

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ers. Managing performance effectively will be key.

According to the Institute’s research, flexible work arrangements and accommodation of work/life balance are among the top five aspects of an ideal job for employees of all age groups (though with differing definitions at different life stages), so these two factors should be considered when designing both recruitment and retention programs.

When human resources are scarce, it becomes particularly important to distinguish between talent (people who are good at what they do) and strategic talent (people who are good at doing things that are strategically important for the organization). This requires clarity about the firm’s strategy, about the specific capabilities needed for the strategy, and about which jobs express or support those capabilities.

An adjusting firm facing numerous imminent retirements can identify key positions and prioritize its efforts in recruitment, retention, and succession planning according to the strategic value of the positions.

Motivation and retention Motivation and retention are closely linked: motivated employees are more likely to stay with the firm. One cluster of motivational approaches involves making jobs more interesting and satisfying. A few examples: • Analyze the career aspirations and training needs of part-time employees (a group in which turnover tends to be high) and then create more attractive employment options for them.

• Explore younger employees’ reasons for leaving and incentives for staying, and adjust practices accordingly. For example, if younger workers are eager for advancement, involving them in project work or stretch assignments can give them an opportunity to learn and grow.

• Restructure positions to accommodate work-life balance issues and offer more flexible employment patterns, such as job sharing and phased retirement plans. These options can particularly appeal to employees with family responsibilities and to older www.claimscanada.ca

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workers looking to transition gradually out of the workforce.

• Establish cross-training and mentoring roles to transfer knowledge from mature workers to younger ones, so that knowledge is retained within the firm even after the mature worker retires.

As with recruitment and selection, retention efforts can be approached strategically. Employees who are performing well and hold strategically valuable positions are particularly important to retain. Other employees might need training or coaching, cross training and redeployment, or replacement with stronger performers.

When human resources are scarce, it becomes particularly important to distinguish between talent (people who are good at what they do) and strategic talent (people who are good at doing things that are strategically important for the organization).

In the current demographic climate, retention programs should target two key cohorts: workers in their 30s, who are the most likely to leave an organization through voluntary or involuntary means; and mature workers, who are the most likely to leave through retirement. For workers in their 30s, training and development, cross-training and mentorship opportunities may be effective motivators. For mature workers – many of whom expressed a preference in the surveys for continuing to work on a part-time basis – consider creating phased-retirement options and post-retirement roles that will allow them to share their experience by mentoring younger managers.

Succession planning Across the industry as a whole, the results of the survey of human resource management professionals show increased use of four tools associated with strategic workforce planning: retirement forecasts, demographic profiling, exit interviews and succession planning. Independent adjusters reported being less likely to use succession planning than most other types of companies.

As a component of performance management, succession planning is about trying to maintain a steady supply of qualified strategic talent throughout the organization, not just in the upper management ranks. Like other components of performance management, it can be aligned with strategy and reflect an understanding of the competencies the firm wants to maintain and develop. Elements include • focusing on the longer term, not just on immediate needs • identifying key positions and the knowledge and skills they require • identifying employees with potential for those positions; creating development plans; and providing training, coaching, mentoring, and job assignments accordingly Large organizations often make succession planning an ongoing part of their performance management activities. When an organization of any size expects to face hiring and retention challenges – as many independent adjusting firms do today – succession planning can be a valuable complement to other workforce management initiatives.  This article is based on the Insurance Institute’s Demographic Analysis of the P&C Industry in Canada 2012–2022, the third in a series of research studies produced in response to industry concerns about human capital issues such as recruitment, retention, succession planning, and training; and on material used in F510 Strategy in the P&C Insurance Sector, the first course in the Institute’s FCIP program for current and future insurance leaders.

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• on the scene OTS

Jodi Payne

Jodi Payne has been appointed as branch manager in Calgary with Kernaghan Adjusters. Payne has worked in the adjusting field for more than 14 years and is an active member of the Alberta Association of Insurance Adjusters Board of Directors.

Her expertise includes personal and commercial liability, auto property, automotive injury and municipal liability. l

Stephanie Wood

Stephanie Wood joined Kernaghan Adjusters as an adjuster in the Edmonton office. Wood has 11 years experience in the insurance industry, 10 of which she has spent as a claims representative. She specializes in both auto and property claims. Wood obtained her CIP designation in 2005 and remains active within the insurance industry. l

Environmental Solutions Remediation Services (ESRS) is now EFI Global. “For over ten years, we’ve served the Canadian insurance industry with superior environmental response services namely in relation to transportation spills and other similar commercial releases,” Gary Dalton, senior vice president & executive director. “Our new name reflects our continued commitment in this specialized field, but with the addition to introducing two new services: forensic engineering and fire investigation. It also aligns us here in Canada, with the services offered by our sister company, EFI Global, Inc. in the United States.” l

Kernaghan Adjusters has opened a new branch in Castlegar, British Columbia.

The office opened on Mar. 1 and services: Castlegar, Nelson, Trail, Creston, and Grand Forks. Mason Norman, who joined Kernaghan Adjusters in July 2012 at the Revelstoke branch, has been appointed adjuster in charge at the new locaMason Norman tion. His areas of expertise include personal property and liability claims of varying complexities, including marine claims on pleasure crafts, and commercial property and liability claims. Ann Stalinski has joined Kernaghan Adjusters as the administrative assistant at the Castlegar branch. l The Canadian Independent Adjuster’s Association’s New Brunswick/Prince Edward Island Region hosted an educational seminar and luncheon in Moncton, NB on May 16. Charles Forster, QC of Foster & Company, and Kevin Quigley of Burchells LLP spoke on a number of high profile issues for adjusters: How to react when denial of coverage is likely — reservation of rights letters and nonwaiver agreements; Accident or arson? The importance of causation in insurance claims; Above the influence?

Section B payments for impaired drivers. l Fred Plant

Winmar Franchise Corp. has signed a multi-year agree- ware we use to estimate their claims,” John White, president/ ment to integrate Symbility Solutions Inc., a provider of founder, Winmar Franchise Corp., said. “We look forward to cloud-based smart phone/tablet-enabled claims technology a successful, long-term relationship with Symbility Solutions that uses one of the most comprehensive data for the prop- as we continue to expand the way we service our customers.” erty and casualty insurance industry into its daily operations. The multi-year agreement will see Winmar implement Symbility’s Claims Connect, an innovative “It is with great pleasure that we welproperty and casualty claims workflow come Winmar, one of the leaders in management software that will streamthe restoration industry in Canada, line the claims estimating process by and their franchise owners to our valreducing cycle time and increasing ued and growing client base,” James accuracy in all aspects of the claims Swayze, CEO, Symbility Solutions, handling process. Winmar will also use said. “Symbility is committed to supSymbility Mobile Claims, one of the porting contractor networks and resindustry’s most intuitive smart phone toration companies and we are proud and tablet-enabled field estimating to be one of the estimating platforms solution in enhancing adjuster and that Winmar has chosen for their large third-party contractor productivity. Monetwork of offices across the country.”

John White & James R. Swayze bile Claims will enable Winmar staff to “Winmar has been in business since quickly and easily generate accurate 1977, with offices spanning from St. John’s, Nfld. to Victoria, BC. Our partnership with Symbility estimates, improve efficiencies and shorten the claims esenables our franchises to collaborate on the most innovative timating process. With no hardware to install or software to cloud-based platform in the market and will enable us to pro- maintain, Winmar will continue to provide their valued policyvide our valued customers an alternative choice in the soft- holders a better claims experience. l

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www.claimscanada.ca

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• on the scene OTS E.A. “Ted” Bishop passed quietly of ALS in Toronto on Friday, April 26, 2013. He was the beloved husband of Pamela for 68 years. Born April 29, 1925 in Montreal, Ted grew up in Toronto. After joining the RCAF at 17, Ted drove a taxi to support his family while earning his BA at the University of Toronto. He then began an extremely successful career in the Insurance adjusting profesTed Bishop sion, starting with the Underwriters Adjustment Bureau in the early 50s, then with Angell & Townson Ltd. in the 60s. Ted then formed E.A. Bishop & Associates, one of Canada’s leading insurance adjusting firms, later consulting and offering expert testimony. He did not close his last file until he was 78.

He will be truly missed by his loving family and many friends. l The grand re-opening of CARSTAR St. Catharines included a life changing moment for the MacKenzies. The Niagararegion family of eight in need of a boost was surprised with the keys to a fully restored 2010 Dodge Caravan.

Jim and Maureen MacKenzie were one of 40 families that had submitted an application to Community Care, and were selected as the winning family.

“Giving back to local communities that our franchises serve is at the core of CARSTAR’s values,” Jeff Moriarty, CARSTAR’s regional development manager, said. “CARSTAR St. Catharines, and the commitment that owner Steve Sytchouk has made to support the Niagara community at his grand re-opening exemplifies CARSTAR’s community-minded spirit.”

In addition to the fully-restored vehicle, the $20,000 prize also included a lifetime warranty on repairs from CARSTAR Collision & Glass, a gift certificate for one-year of insurance from Youngs Insurance Brokers Inc., a $500 service and maintenance gift certificate from Hope & Harder/QMAX NAPA Auto and a $300 Canadian Tire gas card.

This life-changing gift for the MacKenzies was the result of strong community partnerships. When approached by the CARSTAR team, Youngs Insurance Brokers jumped at the opportunity to support a local family.

“We recognize that people in our own community can benefit from businesses coming together to help,” Marie Fucile, VP personal lines, Youngs Insurance, said. “Youngs Insurance is committed to helping families in need and we wish the MacKenzie family safe travels in their new vehicle.”

Community Care assists an average of 1,850 households per month in St. Catharines and Thorold, with over 4,000 pounds of food distributed daily. The not-for-profit organization has been serving local families in need since 1919 and has seen the number of families using their services rise in recent years.

“At Community Care, we encourage our families to become self-sufficient one step at a time,” Betty-Lou Souter, Community Care C.E.O, said. “What CARSTAR and its business partners have done for the Mackenzie family goes way beyond one step; they’ve provided a staircase toward independence.” l 40 Claims Canada

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CIAA New Members — April 2013 CORPORATE MEMBERSHIP Claims Tech (Canada) Inc. Mississauga, ON INDIVIDUAL MEMBERSHIP Crawford & Company Carolle Vieville Winnipeg, MB

Level 1

Cunningham Lindsey Canada Claims Services Ltd. Jack Downey Cranbrook, BC Daphne Chan Port Moody, BC Anthony Esposito Vancouver, BC Rodney Ahlskog Edmonton, AB Robert Keith Edmonton, AB Robert Queen Windsor, ON Gerald Mallet Dartmouth, NS Angela Stiles-Bodkin Vancouver, BC Joseph Poset Mississauga, ON Paul Lin Port Moody, BC Wilson Hunter St. Catharines, ON Jeff Shurtleff Richmond Hill, ON

Level 3 Level 1 Level 1 Level 3 Level 3 Level 2 Level 3 Level 3 Level 3 Level 2 Level 3 Level 3

Claims Tech (Canada) Inc. Mississauga, ON Balu Naidu Mississauga, ON

Level 3

Crawford & Company (Canada) Inc. has become the newest pledging partner of the Regional Carbon Initiative, run by Sustainable Waterloo Region. Crawford, which has been involved in the initiative for a year, has committed to a 20 per cent reduction target.

Sustainable Waterloo Region is a non-for-profit organization that is focused on advancing the environmental sustainability and operations of companies and organizations across the region of Waterloo, Ont. The Regional Carbon Initiative was implemented with the aim to reduce greenhouse gas emissions and has become the organization’s flagship program.

“We are extremely proud to be recognized as a member organization and are committed to improving our local communities through involvement with projects such as this,” John Sharoun, chief executive officer of Crawford & Company (Canada) Inc., said. l Grant King, on behalf of the Canadian Independent Adjuster’s Association’s Nova Scotia region, presented a cheque to Gilberte Theriault of the Nova Scotia Cancer Society. l

Grant King and Gilberte Theriault

Correction:

Steve Scullion is a senior adjuster/ branch manager with Granite Claims Solutions. His position and the company he works for was incorrectly listed in the April/May 2013 issue on page 52.

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The Canadian Insurance Adjusters’ Association (CIAA) Nova Scotia Region, the Canadian Insurance Claims Managers’ Association (CICMA) Nova Scotia Region and the Canadian Defence Lawyers (CDL) hosted a joint conference on April 11.

Approximately 75 people attended to learn about the ‘CGL Claim’ and ‘That Thing Called Facebook.’

L to R - Lucie LaBoissonniere , presenter, CDL, Len Costello, presenter, CIAA • Wendy Johnston, presenter, CDL • Paul Ross, presenter, CICMA • David Graves, moderator, CDL • Grant King, committee, CIAA • Carol Messervey, committee, CIAA

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Granite Claims Solutions has acquired HR Leiher Insurance Adjusters.

HR Leiher Insurance Adjusters, based out of Collingwood, Ont., was formed in 1991 and has since serviced Simcoe County and surrounding areas handling all classes of insurance claims. The company’s founder and principal, Harold Leiher, started his claims career for a national insurer in 1976 and has been an independent adjuster since 1980.

“As a firm, they have always impressed us and been on our radar for quite some time as a potential partner due to their dedication to high-quality claims adjusting and their client-focused approach,” Michael Holden, president and CEO of Granite Claims Solutions, said.

“They very much mirror the standards set out by Granite Claims.”

In addition to increased coverage in the Collingwood area, the acquisition of HR Leiher provides a substantial increase in Granite’s municipal claims skill set.

“I believe the merger between our companies is mutually beneficial,” Leiher said. “In particular, our existing clients will greatly benefit from Granite’s technology and the depth of talent on the Granite team. As well, their quality program is a model we will fit into very nicely.” l

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CIAA REGIONAL PRESIDENTS 2012 – 2013 NEWFOUNDLAND & LABRADOR Christopher Goodwin Crawford & Company (Canada) Inc. 96 Clyde Avenue, Suite 100 Mount Pearl, NL A1N 4S2 Phone: (709) 753-6351 Fax: (709) 753-6129 E-mail: Christopher.Goodwin@crawco.ca NOVA SCOTIA E. Grant King, BA, B.Ed., CIP Crawford & Company (Canada) Inc. 120 – 237 Brownlow Avenue Dartmouth, NS B3B 2C7 Phone: (902) 468-7787 Fax: (902) 468-5822 E-mail: Grant.King@crawco.ca NEW BRUNSWICK & PRINCE EDWARD ISLAND Luc Aucoin, BBA, FCIP Plant Hope Adjusters Ltd. 85 Englehart Street Dieppe, NB E1A 8K2 Phone: (506) 853-8500 Fax: (506) 853-8501 E-mail: laucoin@planthope.com QUEBEC/AESIQ Claude Nadeau Cunningham Lindsey 1250 Guy Street #1000 Montreal, QC H3H 2T4 Phone: (514) 939-1570 Fax: (514) 938-5445 E-mail: cnadeau@cl-na.com ONTARIO Teresa Mitchell, FCIP, CRM, FCLA, FCIAA, FIFAA Crawford & Company (Canada) Inc. 14 – 431 Bayview Drive Barrie, ON L4N 8Y2 Phone: (705) 728-5597 Fax: (705) 728-2167 E-mail: Teresa.Mitchell@crawco.ca MANITOBA Timothy W. Bromley J.P. Hamilton Adjusters Ltd. 125 Enfield Crescent Winnipeg, MB R2H 1A8 Phone: (204) 944-1057 Fax: (204) 944-1606 E-mail: tbromley@mts.net SASKATCHEWAN Cheryl Hanson Crawford & Company (Canada) Inc. 210 – 227 Primrose Drive Saskatoon, SK S7K 5E4 Phone: (306) 931-1999 Fax: (306) 931-2212 E-mail: Cheryl.Hanson@crawco.ca WESTERN Russell Fitzgerald, CIP Kernaghan Adjusters Limited 203 – 4246 97 Street N.W. Edmonton, AB T6E 5Z9 Phone: (780) 488-2371 Fax: (780) 488-0243 E-mail: rfitzgerald@kernaghan.com PACIFIC David Porter, LL.B., FCIP, CRM Granite Claims Solutions 400-4370 Dominion Street Burnaby, BC V5G 4L7 Phone: (604) 699-6550 Fax: (604) 659-6570 E-mail: david.porter@graniteclaims.com

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National Standing Committees 2012-2013 ADVISORY Marie C. Gallagher, FCIP, CRM Granite Claims Solutions 71 King Street, Suite 204 St. Catharines, ON L2R 3H7 Phone: (905) 984-8282 Fax: (905) 984-8290 E-mail: marie.gallagher@graniteclaims.com E. Grant King, BA, B.Ed., CIP Crawford & Company (Canada) Inc. 120 – 237 Brownlow Avenue Dartmouth, NS B3B 2C7 Phone: (902) 468-7787 Fax: (902) 468-5822 E-mail: Grant.King@crawco.ca Greg G. Merrithew, CIP, FIFAA Arctic West Adjusters Ltd. 201 – 5204 – 50 Ave. Yellowknife, NT X1A 1E2 Phone: (867) 920-2212 Fax: (867) 873-2244 E-mail: gregm@arcticwest.ca James B. Eso, BA, CIP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca John Jones, BA Granite Claims Solutions Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: john.jones@graniteclaims.com Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 3550 Victoria Park Ave., Suite 301 Toronto, ON M2H 2N5 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com CIAA NATIONAL INSURANCE INDUSTRY ADVISORY BOARD Patti M. Kernaghan, FCIP, CRM Kernaghan Adjusters Limited 300 - 1575 West Georgia Street Vancouver, BC V6G 2V3 Phone: 1-800-387-5677 Fax: 1-800-387-5644 E-mail: pkernaghan@kernaghan.com

John M. Sharoun, FIIC, CFE, FCIAA Crawford & Company (Canada) Inc. 300 – 123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 867-1188 Fax: (416) 867-1925 E-mail: John.Sharoun@crawco.ca Dennis N. Schembri, CIP, CFEI Granite Global Solutions 133 King Street East, 3rd Floor Toronto, ON M5C 1G6 Phone: (647) 789-2438 Fax: (647) 789-2449 E-mail: dennis.schembri@graniteglobalsolutions.com Jo-Ann Eccleston, CIP Aviva Canada Inc. 2206 Eglinton Ave. East Toronto, ON M1L 4S8 Phone: (416) 689-3328 Fax: 1-866-805-8585 E-mail: jo-ann_eccleston@avivacanada.com Bob Grouchy, BA, FCIP, CRM Allianz Global 1600 – 130 Adelaide Street West Toronto, ON M5H 3P5 Phone: (416) 915-4247 Fax: (416) 849-4555 E-mail: bob.grouchy@agr.allianz.ca Carol Jardine, FCIP, CRM TD Insurance 2161 Yonge Street, 4th Floor Toronto, ON M4S 3A6 Phone: (416) 486-2507 Fax: (416) 545-6022 E-mail: Carol.Jardine@tdinsurance.com Justin MacGregor Avec Insurance Managers - Inc. 25 Toronto Street, Suite 200 Toronto, ON M5C 2R1 Phone: (416) 862-9527 Fax: (416) 862-9388 E-mail: justin.macgregor@avecami.com Mark Stewardson, FCIP Royal & SunAlliance 2225 Erin Mills Parkway, Suite 1000 Mississauga, ON L5K 2S9 Phone: (905) 403-2333 Fax: (905) 403-2326 E-mail: Mark.Stewardson@rsagroup.ca

John D. Seyler, CIP ProFormance Group 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@prospecialty.ca

Mark Weir Intact Financial Corporation 700 University Avenue, 13th Floor Toronto, ON M5G 0A1 Phone: (416) 341-1464 Fax: (416) 217-0562 E-mail: mark.weir@intact.net

Marie C. Gallagher, FCIP, CRM Granite Claims Solutions 71 King Street, Suite 204 St. Catharines, ON L2R 3H7 Phone: (905) 984-8282 Fax: (905) 984-8290 E-mail: marie.gallagher@graniteclaims.com

Peggy Wong, CIP The Economical Insurance Group 111 Westmount Road South Waterloo, ON N2J 4S4 Phone: (519) 570-8500 Fax: (519) 570-8690 E-mail: Peggy.Wong@teig.com

Greg G. Merrithew, CIP, FIFAA Arctic West Adjusters Ltd. 201 – 5204 – 50 Ave. Yellowknife, NT X1A 1E2 Phone: (867) 920-2212 Fax: (867) 873-2244 E-mail: gregm@arcticwest.ca Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 3550 Victoria Park Ave., Suite 301 Toronto, ON M2H 2N5 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com Patricia M. Battle Canadian Independent Adjusters’ Association/L’Association Canadienne des Experts Indépendants 5401 Eglinton Ave. West, Suite 100 Etobicoke, ON M9C 5K6 Phone: (416) 621-6222 Toll Free: 1-877-255-5589 Fax: (416) 621-7776 E-mail: pbattle@ciaa-adjusters.ca

CAREER RECRUITMENT PLANNING Richard Swierczynski, BA, CIP AZ Claims Services Inc. 1500 Upper Middle Rd., Unit #3 P.O. Box 76041 Oakville, ON L6M 3G3 Phone: (905) 825-0027 Fax: (905) 825-5543 E-mail: Richard@azclaims.ca COMMUNICATIONS Teresa Mitchell, FCIP, CRM, FCLA, FCIAA, FIFAA Crawford & Company (Canada) Inc. 14 – 431 Bayview Drive Barrie, ON L4N 8Y2 Phone: (705) 728-5597 Fax: (705) 728-2167 E-mail: Teresa.Mitchell@crawco.ca CONSTITUTION & RULES John Jones, BA Granite Claims Solutions Suite 300, 5915 Airport Road Mississauga, ON L4V 1T1 Phone: (905) 671-3164 Fax: (905) 671-1889 E-mail: john.jones@graniteclaims.com

CONVENTION David S. Riddell, FCIP, CRM Canadian Claims Services 17958 – 106 Avenue Edmonton, AB T5S 1V4 Phone: (780) 443-1185 Fax: (780) 443-1893 E-mail: driddell@canclaims.com DESIGNATION Paul W. Greening, CLA, FCIAA Greening Aviation Claims Inc. 26C Palliser Park, Box 190 Riverhurst, SK S0H 3P0 Phone: (306) 353-2000 Fax: (306) 353-2200 E-mail: pgreening@sasktel.net E. Brian Gough, FCIP, CLA, FCIAA Marsh Adjustment Limited 1550 Bedford Highway, Suite 711 Bedford, NS B4A 1E6 Phone: (902) 469-3537 Fax: (902) 469-2396 E-mail: ebgough@marshadj.com Robert V. Pearson, CLA, FCIAA Hansen Labelle Adjusters Ltd. 1328 17th Avenue N.W. Calgary, AB T2M 0R1 Phone: (403) 284-2211 Fax: (403) 284-2299 E-mail: bob@hansenlabelle.ca DISCIPLINE Greg G. Merrithew, CIP, FIFAA Arctic West Adjusters Ltd. 201 – 5204 – 50 Ave. Yellowknife, NT X1A 1E2 Phone: (867) 920-2212 Fax: (867) 873-2244 E-mail: gregm@arcticwest.ca EDITORIAL Mary Charman, CIP Crawford & Company (Canada) Inc. 14 & 15 – 431 Bayview Drive Barrie, ON L4N 8Y2 Phone: (705) 728-5597 Fax: (705) 728-2167 E-mail: Mary.Charman@crawco.ca John M. Sharoun, FIIC, CFE, FCIAA Crawford & Company (Canada) Inc. 300 – 123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 867-1188 Fax: (416) 867-1925 E-mail: John.Sharoun@crawco.ca EDUCATION Santo Carbone, CRM, FCIAA Crawford & Company (Canada) Inc. 300-123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 364-6341 Fax: (416) 435-0546 E-mail: Santo.Carbone@crawco.ca EMERGENCY MEASURES Richard Van Horne Action Investigations Inc. 2 Catelina Court Dartmouth, NS B2X 3G9 Phone: (902) 462- 1222 Fax: (902) 462-3688 E-mail: richardvanhorne@actioninvestigations.ca

IBC: LIAISON, LEGISLATIVE & FORMS Paul Hancock, B.Sc., CIP Crawford & Company (Canada) Inc. 300 – 123 Front Street West Toronto, ON M5J 2M2 Phone: (416) 867-1188 Fax: (416) 867-1925 E-mail: Paul.Hancock@crawco.ca LICENSING J. Miles O. Barber, B.Comm. (Hons.), FCIP, CRM Network Adjusters Ltd. 67 Folkestone Blvd.

Winnipeg, MB R3P 0B4 Phone: (204) 897-5793 Fax: (204) 897-5797 E-mail: mbarber@mts.net MEMBERSHIP & QUALIFICATIONS Georgiana Chen, CIP ProFormance Group Inc. 1101 Kingston Rd., Suite 280 Pickering, ON L1V 1B5 Phone: (877) 539-3111 Fax: (905) 554-3776 E-mail: gchen@proadjusting.ca NOMINATING Greg G. Merrithew, CIP, FIFAA Arctic West Adjusters Ltd. 201 – 5204 – 50 Ave. Yellowknife, NT X1A 1E2 Phone: (867) 920-2212 Fax: (867) 873-2244 E-mail: gregm@arcticwest.ca John D. Seyler, CIP ProFormance Group Inc. 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@prospecialty.ca James B. Eso, BA, CIP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca Craig J. Walker, CIP, FCIAA, FIFAA Maltman Group International 3550 Victoria Park Ave., Suite 301 Toronto, ON M2H 2N5 Phone: (416) 492-4411 Fax: (416) 492-5657 E-mail: cwalker@maltmans.com PRIVACY James B. Eso, BA, CIP Crawford & Company (Canada) Inc. 539 Riverbend Drive Kitchener, ON N2K 3S3 Phone: (519) 578-5540 Fax: (519) 578-2868 E-mail: Jim.Eso@crawco.ca Keith P. Edwards, FCILA, CLA, FUEDI-ELAE CIAA Honorary Life Member c/o CIAA National Office 5401 Eglinton Ave. W., Suite 100 Etobicoke, ON M9C 5K6 Phone: (416) 621-6222 Fax: (416) 621-7776 E-mail: info@ciaa-adjusters.ca

FINANCE Russell Fitzgerald, CIP Kernaghan Adjusters Limited 203 – 4246 97 Street N.W. Edmonton, AB T6E 5Z9 Phone: (780) 488-2371 Fax: (780) 488-0243 E-mail: rfitzgerald@kernaghan.com John D. Seyler, CIP ProFormance Group Inc. 5080 Timberlea Blvd., Suite 214 Mississauga, ON L4W 4M2 Phone: (905) 238-4985 Fax: (905) 238-2735 E-mail: jseyler@prospecialty.ca Greg G. Merrithew, CIP, FIFAA Arctic West Adjusters Ltd. 201 – 5204 – 50 Ave. Yellowknife, NT X1A 1E2 Phone: (867) 920-2212 Fax: (867) 873-2244 E-mail: gregm@arcticwest.ca

www.claimscanada.ca

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• on the scene OTS ProFormance Group Inc. hosted its 2nd Annual Wine Tasting & Charity Event on Apr. 19. The evening, held at the Drake Hotel in Toronto, included a silent auction, a 50/50 draw and great raffle prizes, including a weekend getaway. More than $6,600 was raised and went to the Jennifer Ashleigh Children’s Charity - These funds will go to help approximately 10 families with children that have serious illnesses “when love is not enough”. Wine tasting and hors d’oeuvres were available throughout the evening. Jennifer Valentyne of Breakfast Television emceed the event. l

www.claimscanada.ca

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• on the scene OTS Canadian delegates of the 2013 RIMS Conference and Exhibition in Los Angeles gathered with their U.S. and foreign friends at Canada Night on Apr. 23, sponsored by SCM Insurance Services and the Canadian Litigation Counsel. The event provided a chance to catch up and share stories to the benefit of the William H. McGannon Foundation. RIMS Canada Council Chair Betty Clarke, on behalf of the RIMS Canada Council, presented a donation of $10,000 to McGannon Foundation president and director Joe Restoule. l

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www.claimscanada.ca

13-06-25 10:54 AM

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• on the scene OTS The 13th annual Ontario Pond Blue Goose Scotch Nosing took place on Apr. 25 at the Shangri-La Hotel (Toronto) in their beautiful Queen’s Park Ballroom. More than 200 Ganders and guests attended raising funds in support of Camp Oochigeas - A Camp for Children With Cancer. Once again, Ed Patrick, president and founder of the International Order of the Companions of the Quaich Whisky Appreciation Society, presided over the nosing and led the tastings. l

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www.claimscanada.ca

13-06-25 10:59 AM

Kernaghan Adjusters held its 60th Anniversary Celebration on May 1, at the University Club of Toronto. In honour of this milestone, President and CEO Patti Kernaghan thanked all who attended and shared in the celebration, as well as all those within the industry for their support over the years. l

THE PROPERTY RESTORATION SPECIALISTS WITH OVER 85 SERVICE LOCATIONS ACROSS CANADA 24 HOUR ASSIGNMENT/EMERGENCY RESPONSE TOLL FREE 1-866-4-WINMAR ( 494-6627 ) Proud to be Canadian owned and operated. www.claimscanada.ca

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• on the scene OTS Winmar Toronto/Brampton hosted their annual “Spring Fling” on May 2, at the Watermark Irish Pub in Toronto. The event was created as a way to increase awareness for brain injury research and also served as a fundraiser for St. Michael’s Hospital. $15,000 was raised and a cheque was later presented to Dr. Michael Cusimano of St. Michael’s Hospital. 250+ industry friends were entertained by guest singer “Roxanna” and everyone enjoyed an evening of good food and beverages. l

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www.claimscanada.ca

13-06-25 1:33 PM

A record turnout of 200+ industry representatives attended the 54th Annual Reception of the Quarter Century Club on May 23 at the Albany Club in Toronto. The event was a roast for claims industry veteran James Giffen, owner/director of Malik, Giffen & Burnett (MGB) Claims Consultants Inc. James has been a loss adjuster since 1987 and was previously the Director of Technical Services Canada for Crawford & Company in Toronto. In May 2010 (along with partners Shawn Malik and Shawn Burnett) launched MGB Claims Consultants Inc. l

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• on the scene OTS Friends, colleagues and guests gathered on May 29 within the historic Distillery District in Toronto (once the renowned Gooderham & Worts whiskey distillery) to celebrate ServiceMaster’s 60th Anniversary in Canada. Held at Archeo Restaurant, one and all gathered together to celebrate the six decades of restoration excellence by enjoying an evening of wine, food and good conversation. l

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www.claimscanada.ca

13-06-25 1:35 PM

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