Responding to Ontario NDP leader Andrea Horwath's proposal to reduce auto insurance rates in the province by 15%, the Insurance Bureau of Canada said Monday that the proposal misses the mark.
"...(B)and aid solutions may score political points, but for the long term all stakeholders need to continue to push for needed reforms and fight fraud," IBC stated in a press release.
IBC maintains that fraud in Ontario auto insurance costs as much as $1.6 billion per year.
Read more: Ontario NDP leader says lowering auto insurance rates a priority for spring session
Earlier Monday, Horwath laid out some proposals for the Ontario legislature when it resumes later this month, among them a proposal that the Financial Services Commission of Ontario (FSCO) be mandated to reduce auto insurance rates 15% by March 2014.
“It’s about time they stand up for Ontarians and say fraud must end,” Ralph Palumbo, vice president, Ontario for IBC stated. “If the NDP was interested in saving consumers money they would be supporting government reforms and the Anti-Fraud Task Force’s recommendations, not throwing around arbitrary numbers.”
In January, the Ontario Liberal government proposed several regulatory changes in line with the recommendations from that report.
IBC says that the Ontario auto insurance industry lost an average of nearly a billion dollars a year between 2008 and 2010 on the auto product, including a $1.7 billion loss in 2010. Of the $233.2 million earned in profits in 2011, there were more than $10.3 billion in written premiums. Most of that money collected is returned to claimaints, IBC suggests.
“I find it hard to believe this constitutes soaring profits,” Palumbo noted.