Several changes to the Automobile Insurance Act and the Insurance Companies Act will come into effect on Thursday, the provincial government says.
A news release notes that under the Automobile Insurance Act, uninsured motorists involved in an accident prior to Aug. 1, 2019 are eligible for compensation from the Uninsured Automobile Fund. Where an accident occurs on or after Aug. 1, 2019, uninsured motorists will be prohibited from accessing the uninsured fund for payment of damages for injuries arising from the accident.
In addition, the Insurance Companies Act will now include a reduction of commission rates for taxis and limousines. Previously, Facility Association paid brokers a six per cent commission rate for taxis and limousines. The commission rate for taxis and limousines is cut in half, from six per cent to three per cent, which must be reflected in the next rate filing from Facility Association.
The release adds that Facility Association has been directed to include in its Plan of Operation the establishment and operation of an all-comers risk-sharing pool for members in the province. A risk-sharing pool would allow drivers who are currently insured through Facility Association, but are not considered to be the highest risk, to be insured through the regular market while allowing insurance companies to share that risk with all insurers.
These are issues raised during the provincial government review of auto insurance undertaken by the Public Utilities Board.
“Stabilizing insurance rates requires a suite of solutions that, over time, will help realize benefits for the consumer,” said ServiceNL Minister Sherry Gambin-Walsh. “We worked closely with all stakeholders to arrive at these changes. It is important that we maintain our focus on safe driving habits, as less accidents are a contributing factor in helping decrease insurance rates.”
The provincial government says it is also committed to providing better value for consumers by recognizing new technology in the insurance industry.
The release states that, in certain cases, this does not require changes to insurance legislation such as allowing insurance companies to offer Electronic Proof of Auto Insurance (EPAI). Effective July 29, 2019, documents may be delivered electronically through smart phones, apps, email or tablets should a person consent to EPAI if offered by an insurance company.
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