The automobile insurance anti-fraud task force made a total of 38 recommendations in its final report, including a call for a new provincial administrative authority to licence tow trucks and keep an eye on fraudulent practices.
The task force said the towing industry is governed by an inconsistent and confusing patchwork of requirements and enforcement levels, calling tow trucks "a critical first link" in a chain of fraudulent activity that starts at the scene of a collision.
"We have been told repeatedly by participants in the auto insurance system that some towing operators are engaged in organized or premeditated auto insurance fraud," said the authors.
"These operators may be part of a larger organized ring that manufactures false claims or inflates existing claims through referrals to particular auto body storage and repair shops, health-care clinics and legal service providers, or they may be acting alone by charging excessive fees to motor vehicle collision victims."
Finance Minister Dwight Duncan, who set up the task force, said auto insurance fraud is "a significant problem" in Ontario.
"I want to thank the task force for the excellent work it has done to identify ways to protect Ontario's nine million drivers against fraud while helping to stabilize auto insurance rates across the province," Duncan said in a statement.
The New Democrats said the report is exactly the type of thing that would get serious debate by an all-party committee, but that can't happen because Premier Dalton McGuinty prorogued the legislature until early next years when the Liberals pick a new leader.
"Drivers paying the highest (insurance) rates in the country deserve some real answers, and instead of working for them the government shut down discussion and prevented us from doing our job," said NDP consumer affairs critic Jagmeet Singh.
"Today’s report on fraud is exactly the sort of study we should be reviewing in an open and accountable setting. Instead, drivers will see more decisions made behind closed doors."
The cost estimate of auto insurance fraud ranges from $768 million to $1.56 billion dollars in 2010, and amounts to between $116 and $236 per average premium paid by Ontario drivers, with 83 per cent of it taking place in the Greater Toronto Area.
Claims costs decreased significantly after the Liberal government introduced a series of reforms in September 2010 that allowed people to lower their coverage for lower rates.
"In 2011, accident benefits claims costs in Ontario were estimated to be $2 billion, compared with $3.9 billion in 2010," concluded the task force.
"The fact that costs may have been reduced substantially does not — by itself — say very much about reductions in the incidence of fraud."
There are suggestions that one of the impacts of the 2010 changes has been to redirect criminals away from claims for treatment and toward fraudulent claims for income replacement benefits.
The task force also called for rule changes to make it clear that insurers are required to provide claimants with a full explanation when they refuse to pay for treatment, assessment or other benefits.
It also called on the government to reduce uncertainty and delay for those who have legitimate auto insurance claims by moving to address the current backlog of mediation cases before the Financial Services Commission of Ontario.
"It should actively promote the development of science-based treatment protocols, act aggressively to reduce the claims under dispute at FSCO and develop a more robust and timely dispute resolution approach," said the report.