Ontario’s auto insurance system is “one of the least effective” in the country, despite having the most expensive premiums and one of the lowest levels of accidents, according to a government-commissioned report.

While the number of accidents including major collisions has consistently come down, “the cost of claims has consistently gone up,” said the report by provincial auto insurance adviser David Marshall.

The former Workplace Safety and Insurance Board CEO said the system is riddled with disputes and inefficiencies “and a very high percentage of premiums are being used to pay experts and lawyers and not going directly to injured persons.”

Called Fair Benefits Fairly Delivered: A Review of the Auto Insurance System in Ontario, the report posted online by the finance ministry finds that Ontario drivers paid an average annual insurance premium in 2015 of $1,458 per vehicle, nearly 57 per cent higher than the national average of $930. Auto insurance rates in the heavily urbanized GTA are even higher than the provincial average, noted Insurance Bureau of Canada spokesman Steve Kee.

“Insurers shared with me that it is taking them over a year to close even the simplest claims (and) accident victims are having a difficult time getting what they perceive to be fair benefits,” insurance adviser Marshall said in the report, adding that one out of three accident-benefits claims arrives at dispute resolution.

He said the main flaw is in a system that allows participants to work at cross-purposes, with insurers focused on controlling costs, accident victims looking to maximize entitlements, lawyers on contingency working to boost the value of claims, and health care providers paid on the volume of treatments.

Marshall said the government should fix the structural flaw by setting up an arm’s-length regulator, a move he said is afoot with the creation of the new Financial Services Regulatory Authority in Ontario.

“From for-profit medical clinics to lawyers, there are a number of people who have a part in this system,” said Kee, who added that his organization is committed to working with all stakeholders with a goal of moderating vendor costs across the claims process.

Ontario’s Liberal government in 2013 pledged to cut auto insurance premiums an average of 15 per cent by August 2015, but the average decrease since August 2013 is about 8.3 per cent, or a little more than halfway to the government’s goal.

The Marshall report also recommends measures to reduce insurance costs and improve customer experience and care for those injured in collisions, including:

prohibiting most cash settlements;

implementing mandatory programs of care to treat common injuries;

the introduction of independent, hospital-based examination centres to provide single medical assessments;

an increase in the financial services regulator’s role in monitoring and investigating practices in the auto insurance system.

The report recommended that Ontario not change its hybrid auto insurance system, which sees mandated insurance for the province’s nearly 10 million drivers provided by the private sector. The report argues that a shift to a government-run system would be too disruptive at time when the auto industry is undergoing major technological change.

The province in a statement said it will consult on the recommendations and announce details in coming weeks.

The report was quietly posted online last week to Ontario’s government news release site in a way that does not alert subscribers. A spokeswoman for Finance Minister Charles Sousa said it was not issued as a news release because “there really was no news to announce.”

NDP deputy leader Jagmeet Singh said it looks like the government was trying to “bury” the report.

In the past several years the government has reduced benefits, Singh said, such as reducing coverage for catastrophic injuries from a maximum of $2 million to $1 million.

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“Every change has systematically cut the coverage that Ontarians receive and benefited not the people but insurance companies,” he said.

The provincial government has already lowered the maximum interest rate that an insurer can charge for monthly auto premium payments, prohibited minor at-fault accidents from boosting premiums and introduced a winter tire discount.