October 1, 2003 by Canadian Underwriter
A task force established by the premiers of Atlantic Canada has rejected implementing public auto insurance in the region. The “Atlantic Insurance Harmonization Task Force” found “no significant reason to transform the private enterprise delivery system to a government monopoly supplier”.
The task force report concluded that a public auto insurance system would not produce long-term rate savings for consumers, and that this could only be achieved by rethinking the auto insurance product. In this vein, it supports the insurance industry’s contention that rising bodily injury costs are to blame for rising rates. “The two real issues are, the task force notes, is: “How the majority of traffic injured can come to terms with reasonable reduction of their compensation so that Atlantic Canadians can afford the cost of basic mandatory automobile insurance, and how motorists can come to acceptance of the realistic and reasonable cost of insurance to pay for the injuries caused by insured motorists?”
The report advocates reducing tort components of auto insurance while still providing reasonable compensation. It also recommends the Atlantic provinces consolidate rating processes and personnel to achieve economies of scale, as well as having one insurance regulator. In this respect, the task force urges the governments to set up a permanent, harmonized regulatory review board.