Opposition sides go to war over Newfoundland and Labrador auto insurance reforms
Published: March 26, 2019
Updated: April 1, 2019
Author: Luke Jones
CATEGORY: Car Insurance
The government of Newfoundland and Labrador is close to reaching a decision on what reforms should be made to the province’s auto insurance system following a recent review. As the moment of truth nears, tensions are rising between groups with opposing views on what could solve NL’s auto problems.
The Insurance Bureau of Canada (IBC), the organization that represents private insurance providers, has been vocal throughout the process. IBC has consistently called for a $5,000 minor injury cap to be implemented in an effort to provide market stabilization. The bureau believes this will help auto insurance carriers return to profitability and eventually reduce rates for consumers.
IBC has said insurance companies may pull out of the Newfoundland and Labrador market due to declining profitability. In recent weeks, the IBC and a group of personal injury lawyers who founded the Insult to Injury Campaign and have increased their criticism to each other.
Recent reports suggest insurance premiums in New Brunswick have been increasing dramatically in recent years. New Brunswick is often referenced as a yardstick for NL, but the Insult to Injury Campaign says the IBC did not disclose the province has its own share of problems.
“In its filings with the board for the hearing and throughout the entire hearing, submissions and reporting process, the IBC continued to provide and rely on 2016 and earlier data from other Atlantic provinces in support of its argument that a cap on so-called minor injuries in New Brunswick and Nova Scotia was a shining example of a mechanism for controlling claims costs and providing rate stability,” the letter states.
“All the while, the IBC was well aware that rates in New Brunswick had begun to escalate to a significant degree after 2016 and did nothing to bring this to the attention of the board.”
Amanda Dean, IBC vice-president for the Atlantic region says the organization simply took the most recent data from the General Insurance Statistical Agency.
“New Brunswick has had a cap for 16 years. It’s been tremendous stability for consumers over that 16-year period and now we are seeing — whatever is happening within the market — there’s a few more claims happening, rates need to go up accordingly. So, the fact that insurers are filing for rate increases, justifying the rate increases and it’s going up, that is the sign of a healthy market. Things improve, rates go back down in a healthy market.”