IBC renews push for New Brunswick auto reform in face of election battle

The insurance industry’s lobby group renewed its call for action on proposed legislation to change New Brunswick’s auto insurance system. The Insurance Bureau of Canada (IBC) is specifically fighting for the passage of tort reform to limit awards for non-economic damages, i.e. “pain and suffering”, in auto accident related lawsuits.
The push comes as auto insurance rates become a key platform in the province’s election campaigns. The Liberals say they will force insurers to reduce rates by 25%, notes Don Forgeron, Atlantic region vice president for the IBC, but do not offer solutions to reduce the claims burden on insurers at the same time. Such a plan would not help consumers, but would “most assuredly remove all incentive for insurers to do business in the province”, he says.
“The Liberal platform clearly demonstrates a lack of understanding of the insurance system in New Brunswick,” he says. He adds that the proposed re-introduction of a restriction on territorial underwriting (i.e. basing rates partly on where drivers live and travel) is an example of this lack of understanding that is a root cause of insurance becoming less available and affordable in certain regions of the province.
Forgeron struck back against Liberal leader Shawn Graham’s public criticism that insurers are price gouging, noting that in the past decade the industry has lose $340 million in the province.
“The facts are very clear – premium increases over the past 24 months have been required and in spite of these insurers continue to post losses. To suggest the industry is over-charging consumers is not consistent with reality.”
Forgeron insists the cap on pain and suffering awards will lead to a relatively quick drop in premiums. He also notes that insurers are not entirely pleased with the new legislation, specifically underwriting restrictions and changes to the Public Utilities Board. Insurers currently have a “file and use” rate system which they prefer to the proposed new “Automobile Insurance Review Board” to approve any rate increases above 3%.