November 5, 2003 by Canadian Underwriter
Following up on its threats, the Alberta government has announced it will freeze auto insurance rates as of October 30, 2003, and that the freeze could be in place for as long as 18 months. Bowing to public pressure, Premier Ralph Klein says legislation will be introduced in the upcoming sitting of the legislature to freeze rates retroactive to that date. Interestingly though, the freeze applies on to those whose driving status has not changed, meaning those with a recent driving conviction could still see their rates rise, and those expecting a discount for good driving should still be rewarded. It applies to both personal and commercial auto rates.
Klein says the freeze “will ensure that consumers are protected from general increases not related to driving record while we work toward a long-term solution to the problem of high rates.” Discussions on such issues as tort reform have been ongoing but produced no real changes thus far.
Klein adds that a new regulation will be put in place to prevent people from “inappropriate” placement in the industry’s pool for high-risk drivers, the Facility Association. It is unclear what will constitute “inappropriate” placement.
Finance Minister Patricia Nelson says although the freeze could last as long as 18 months, she thinks the government will have a reform package in place prior to that. While the nature of such a package in unknown, Nelson hinted that it would include underwriting restrictions and a change to compensation for accident victims.