Insurance Bureau of Canada (IBC) said it is encouraged by the Nova Scotia government’s move to cap pain and suffering awards for less serious injuries at $2500, as announced today.
“This model appears to be moving in the direction of the model just implemented in New Brunswick and we are already seeing positive results there,” Don Forgeron, Atlantic vice-president, IBC, commented. “Consumers of New Brunswick are seeing rate decreases and more available insurance as a result of caps in that province.”
Forgeron explained that since the cap was announced four companies in New Brunswick have applied for rate decreases and one has appointed a large broker network in the northern part of the province where consumers have in the past had trouble accessing affordable insurance.
“The government of New Brunswick implemented legislation to address the escalating claims costs and insurers in that province responded,” he added.
While the Hamm government has indicated the cap on pain and suffering awards for minor, non-permanent injuries will translate into a 20 percent rate reduction for all drivers, IBC cannot confirm that prediction at this point.
“Our actuaries are currently studying the plan to see if the change can translate into the savings projected by the government,” said Forgeron. “But we are encouraged by the fact that the government is headed towards a solution for Nova Scotia consumers.”
However, according to IBC, two areas of concern remain in Nova Scotia – new regulations introduced in June and the current rate freeze. “While rates have been frozen, the cost of claims have not. That poses a problem for insurers in this province,” Forgeron added. “And adding regulations adds more expense to the system.”
Although encouraged by the pain and suffering cap, Forgeron stressed that IBC would continue to work with government to develop a concrete, long-lasting solution to the price pressures being experienced by Nova Scotia consumers.
“As an industry we welcome product reform that benefits all consumers. Addressing compensation awards is an important step to accomplishing that,” he noted.
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