By: Luke Jones, Published on March 30, 2018 11:28 AM, Last Update on March 30, 2018 08:40 AM
Auto insurance providers in Ontario are pressing the government to keep focused on its goal to reduce auto premiums in the province. With elections around the corner, there is a chance the ruling party in Ontario to retro several reforms, so insurers are calling on all political parties to commit to auto insurance reforms.
The Insurance Bureau of Canada (IBC) wants non-partisan support for the current government’s Fair Auto Insurance Plan.
“We’re pleased that the current government reaffirmed its commitment to transforming the auto insurance system by reiterating the measures contained in its Fair Auto Insurance Plan,” IBC said this week.
Announced this week, the 2018 Budget from the Liberal government put a firm timeframe on the launch of the Financial Services Regulatory Authority (FSRA). The replacement for the Financial Services Commission of Ontario (FSCO) will be operational by April 2019. The new regulatory body will oversee finance laws in Ontario and will brings a more effective regulation system to the province. FSRA will create legislation that mandates insurance companies to supply vehicle repair and claims history information to prescribed parties.
“We see FSRA as a proactive, innovative regulator that will lead to sustainable improvement in rates for Ontario’s almost 10 million drivers,” said Kim Donaldson, Vice-President, Ontario, IBC. “Ontario’s insurers support this new regulator and we look forward to working with FSRA.”
The FSRA will also be backed by changes to the Insurance Act, allowing prudential oversight over certain insurance companies in Ontario.
Through the wider budget, the government also recommitted to continuing auto insurance reforms in an ongoing effort to reduce premiums. This includes the Fair Auto Insurance Plan, which aims to reduce the cost of insurance in a sustained way. Additionally, the plan will ensure injured people receive a higher level of care.
“Of note, the government has adopted the recommendation made by the industry on how to best manage the care of those who have suffered a catastrophic impairment as the result of a collision,” IBC says. “Instead of making this the responsibility of the Ministry of Health as recommended in David Marshall’s report Fair Benefits Fairly Delivered, there will be funding through the Ontario Neurotrauma Foundation to develop evidence-based programs of care for the most seriously injured.”
However, the budget may have little longevity if political polling statistics hold up. The Ontario elections will be held June 7, 2018 and polls favor Doug Ford’s Ontario Conservative Party. Of course, polls have been wrong before, but if a new regime takes office, changes to auto insurance could be in danger.
“We are looking for all parties to commit to making Ontario’s auto insurance system work better for consumers,” IBC said. “We think the Fair Auto Insurance Plan is a good start.”
The plan introduces the following focus points:
“The risk and opportunity for the industry [of a possible regime change] is the new government’s focus on this objective [and] not becoming distracted by the current issue of the day, for example territorial rating,” said IBAO CEO Colin Simpson.