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Updated: Auto insurance measures soon to be announced: minister

Amanda Dean
Amanda Dean.

Expected to be tabled in current sitting of the House of Assembly

The Public Utilities Board (PUB) review aimed at auto insurance reform in the province is long over, yet the board is still receiving correspondence from the two main adversaries that fought it out during the review.

In fact, both the Insurance Bureau of Canada (IBC) — the association that represents insurers— and a group of personal injury lawyers in the province that formed the Insult To Injury Campaign aimed at protecting accident victims, have written the PUB in recent weeks slamming each other.

The PUB’s review had looked into the reasons behind increasing claims costs for private passenger vehicles and taxi operators, and looked at options to reduce these costs. The board had been specifically asked to examine the impact on rates and implications for claimants of introducing a monetary cap on claims for non-economic loss for minor injuries or continuing with the current deductible of $2,500 or increasing the deductible.

The PUB presented its report to the provincial government on Jan. 29.

In the House of Assembly in its current sitting, Service NL Minister Sherry Gambin-Walsh stated her department has already implemented a number of measures to help strengthen the taxi industry in relation to auto insurance.

Measures for other drivers are to follow in the coming weeks.

“Effective July 1, 2018, there were policy amendments focusing on skilled drivers, experience in driving in provincial road conditions, driving history, and passenger safety and safer vehicles,” the minister said. “A zero tolerance policy for drugs or drugs, and alcohol when operating a taxi, came into effect on Dec. 18, 2018.

“In Budget 2018, government approved a one-third reduction in the tax on auto insurance over four years. This will particularly benefit those paying the highest rates, such as taxi operators. Our government remains committed to working with stakeholders, and bringing forward changes to legislation during this sitting of the House that will benefit consumers of insurance in Newfoundland and Labrador.”

During the PUB hearings, the IBC has stated that the imposition of a $5,000 minor injury cap, plus other reforms that will give accident victims faster access to health care and a quicker recovery, is the best option to stabilize insurance premiums and one day see a reduction in rates in Newfoundland and Labrador.

The Insult To Injury Campaign, however, argued that if a minor injury cap is imposed, accident victims will lose the right to sue for fair compensation and premiums will not go down and likely continue to rise.

The letters to the PUB came after a CBC News report stated that insurance premiums in New Brunswick have been dramatically increasing the last couple of years despite a minor injury cap in place in that province.

The Insult To Injury Campaign wrote the PUB suggesting that the IBC, in its filings with the board and throughout the hearings, continued to provide and rely on 2016 and earlier data from other Atlantic Provinces in support of its argument that a cap on minor injuries in New Brunswick and Nova Scotia was an example of a mechanism for controlling claims costs and providing rate stability.

“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,” the lawyers’ letter stated.

The lawyers asked the PUB to denounce in writing “in the strongest possible terms” the conduct of the IBC uncovered in the news report.

Amanda Dean, IBC’s vice-president Atlantic, however, fired off a letter to the PUB in response. She said the rate filings in New Brunswick are posted to the New Brunswick Insurance Board website and publicly available.

“In reference to the use of 2016 data during the hearing instead of 2017, IBC only obtained the 2017 GISA (General Insurance Statistical Agency) data upon its public release by GISA in July of 2018,” Dean wrote.

“The 2017 numbers referenced in the PUB report were arrived at through the actuarial work of Oliver Wyman, and included additional GISA information to which IBC did not have access.

“It is of note to recognize that in 2017 the average written premium in New Brunswick was $819, while the average written premium in Newfoundland and Labrador was $1,132.”

She said IBC takes great issue with the assertion it deliberately misled the PUB hearings.

The province's consumer advocate, Dennis Browne, has stated it is difficult to conclude that the introduction of a cap would be an improvement or translate into long-term, stable rates for consumers.

He prefers the option of increasing the current deductible of $2,500 to $10,000.

In a recent letter to The Telegram, Browne stated that:

“The purpose of the current $2,500 deductible was to stabilize and reduce rates, but that purpose has not been fulfilled. A deductible regime in the $10,000 range may be one method to ensure reduced, stable and affordable premiums. In introducing the new regime, a period of 24 months may be appropriate for a rate freeze after which time an assessment can be made to see if the $10,000.00 deductible is having the intended effect.”

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