Addressing Insurance: The path to fair and effective regulation of the collision repair industry

By Andrew Shepherd

In our last epistle in this space, we discussed the world-leading approach of Canada’s public insurance provinces in adopting ‘universal’ collision repair standards covering training, equipment and business operations. Manitoba, Saskatchewan and B.C. are addressing consumer safety and insurance cost control through the regulatory powers of government insurance agencies.

In Saskatchewan, this involves a two-tier accreditation scheme with a top tier modelled after the manufacturers’ specifications for operation and repair, and with these, the ‘rights’ to repair a far greater number of collision types. Tier 2 will have similar training requirements without the same investment in equipment. The sweetener in the deal is a payment of up to $15,000 per shop to compensate for investments in training and equipment.  The tiered system is very similar to that operating in Manitoba since 2018 and that proposed for BC in the coming months.

By any standard—no pun intended—these three western provinces are taking an enlightened approach to improving safety and controlling escalating insurance rates. But if training, equipment and operational standards are an obvious answer, how are other provinces following suit?

It is true that a provincial insurance agency provides an ideal regulatory mechanism to drive changes to the collision repair industry, and there are no signs that other provinces are considering this direction, but there is a wide range of alternatives to government regulation.

Quebec’s insurance approach might be called ‘quasi-regulated’—the Groupement des assureurs automobiles (GAA) was created in 1978 to bring risk sharing, claims settlement and rate-setting standards to private insurers operating in the Province. Clearly, it would be an easy step to adopt training and equipment standards as well.

Ontario, with the largest population of collision repair facilities, has been very active in looking for ways to reduce insurance costs. AIA Canada has been in discussion with Ontario’s Conservative government regarding the adoption of the Canadian Collision Industry Accreditation Program (CCIAP) as a form of industry self-regulation. These discussions are based on an AIA White Paper entitled “Collision Repair Facility Accreditation: Implications for the industry and the public and the role of a national accreditation program – An AIA Canada Position Paper”—available on the AIA website. Alberta has recently created an expert advisory committee to review the province’s automobile insurance system to reduce costs for consumers—they may well consider the same options being reviewed in Ontario.

One could confidently predict a trend to further regulation of the repair industry, particularly as we move rapidly toward autonomous vehicles, increased complexity and growing safety concerns. Industry self-regulation, through programs such as CCIAP, provides governments with an effective model which avoids red tape and reduces public costs – and at the same time serves the collision repair industry itself by avoiding the regulatory burden of paperwork, licenses and inspectors.

Andrew Shepherd is the executive director of I-CAR Canada, a non-profit organization that provides collision repair training and ongoing education. He can be reached at andrew.shepherd@aiacanada.com.