Insurance Bureau of Canada (www.ibc.ca) reaffirmed the need for quick implementation of New Brunswick’s proposed legislation that would reportedly address the real problem with auto insurance in the province – the cost of minor non-permanent injuries.
“Restrictions on pain and suffering awards will help control the cost of auto insurance,” IBC Atlantic vice president Don Forgeron commented. “However, there are aspects of the government’s plan with which the industry continues to disagree strongly such as underwriting restrictions and changes to the Public Utilities Board.
“While individual insurers will reflect cost savings in their premium prices, it has been proven that controlling pain and suffering awards is the most effective means of reducing the cost of auto insurance”.
Responding to the recently released Liberal election platform on insurance reform, Forgeron said, “Forcing insurers to reduce rates by 25 percent when their claims costs have not been reduced by the same amount will not serve the long term interests of New Brunswick consumers. In fact, it would most assuredly remove all incentive for insurers to do business in the province.
“It’s competition in the marketplace that will control premium prices. And in an effective business environment, insurance is highly competitive. Legislative reforms that address the cost of spiraling claims settlements for minor non-permanent injuries are critical to returning New Brunswick to this competitive environment. The industry has proven in the past how competitive it is and once these changes are in place, premiums will reflect cost savings that vary with individual companies.
“The Liberal platform clearly demonstrates a lack of understanding of the insurance system in New Brunswick, offering the opposition’s proposed reintroduction of a restriction on territorial underwriting as an example. The current restriction has proven to be the root cause of availability and affordability issues in certain regions of the province.”
Forgeron was also critical of Liberal Leader Shawn Graham’s reported accusation of industry price gouging.
“Right now, the auto insurance product is unsustainable in Atlantic Canada,” he said. Insurance companies have experienced losses of $340 million in New Brunswick over the last 10 years, a situation that is similar in the rest of the country.
“The facts are very clear – premium increases over the past 24 months have been required and in spite of these insurers continue to post losses. To suggest the industry is over-charging consumers is not consistent with reality.”
Was this article valuable?
Here are more articles you may enjoy.