IBC: Ontario auto regulations are “outdated they need to be modernized”
Published: October 18, 2018
CATEGORY: Car Insurance
Earlier this week, lawmakers in Ontario introduced two bills that aim to ban territory assessment used by insurance companies to decide auto insurance premiums. The proposal follows general support across political divides to change territorial ratings.
In a statement on Wednesday, the Insurance Bureau of Canada (IBC) said the proposal highlights the need for Ontario to change its rate system. However, the insurance industry representative has not taken a stance on the bill and will discuss the matter with member companies.
Bill 42, the Ending Discrimination in Automobile Insurance Act was introduced by Tory legislator Parm Gill of Milton. He says insurance companies are engaging in discriminatory pricing by assessing premium cost on where a customer lives.
“Ontario’s auto insurance rates are amongst the highest in Canada despite having some of the lowest levels of accidents and fatalities,” Gill said. “Our government is committed to ensuring fairness in rate setting and ending discriminatory practices.”
Pete Karageorgos, director of consumer and industry relations for the IBC in Ontario, says the bureau will assess the bill before offering any opinions on its potential impact. He did, however, say it is clear MPPs realize the rating system in Ontario is broken:
“MPPs recognize that regulations are outdated they need to be modernized,” Karageorgos said Tuesday
Finance Minister Vic Fedeli said Bill 42 can “end the unfair practice of discriminating against drivers simply based on where they live” but stopped short of officially endorsing the proposal. It is worth noting that most private member bills are defeated, even if coming from the ruling government.
While the IBC is avoiding a lasting judgement on the proposal to end territory assessments, Karageorgos suggests insurers are justified in their methods. He argues most collisions occur in urban areas, where premiums are more expensive.
NDP legislator Gurratan Singh also introduced a bill similar to Bill 42 on Monday. His rule that would mandate the Financial Services Commission of Ontario (FSCO) to refuse approval for pricing systems that do not deem the Greater Toronto Area as a single geographic location.
“Drivers in the Peel region and other parts of the GTA continue to arbitrarily pay significantly higher auto insurance rates than anywhere else in the province,” Singh said.
“It will make sure that insurance companies are not allowed to gouge people simply based on the neighbourhood they live in or the municipality that they live in,” the MPP said.