The New Brunswick Union of Public and Private employees believes public auto insurance is one way to address the province’s budget woes.
The union represents 8,500 workers in the public, private and manufacturing sectors. In a statement online, the union says it has met with the province’s finance minister, Blaine Higgs, at least eight times over the past 13 months concerning proposals for addressing the province’s projected budget deficit of $448.8 million in 2011-12.
The union offers several suggestions, including investing $750,000 in provincial government bonds, generic drug pricing, liquor privatization and highway tolls. It also recommends public auto insurance.
In doing so, the union cites the work of a 2004 all-party committee on public automobile insurance. The committee found a public auto insurance system would raise $275 million after two years.
The union also cited the work of a government-commissioned, independent actuarial study in 2007. The study found that between 2003 and 2007, New Brunswick consumers paid $518 million in insurance premiums above the value of claims paid out and the required hold-back by the insurance industry.
“Imagine one half billion new dollars over a three-year period circulating through the economy of our communities rather than being issued to shareholders of multi-national insurance companies as dividends,” the union said in a statement. “Why not keep the money here for our needs?”
The IBC was not available for comment prior to press deadline. On its Web site, IBC notes that the auto insurance reforms in New Brunswick in 2003, which introduced a $2,500 cap on awards for pain and suffering, “have allowed the privately delivered insurance system to work as it should for consumers.”
IBC notes a number of reasons why existing private insurers are able to offer fairer rates than public insurers, including the ability to establish insurance rates based on true costs, based on variable rating factors. It estimates starting a new public auto insurance system from scratch in New Brunswick would cost at around $415 million.