Alberta Insurance Rate Board confirms commitment to moving toward file-and-approve regulatory regime

With the province’s auto insurance product now stabilized, the Alberta Insurance Rate Board (AIRB) is now looking into moving toward a file-and-approve regulatory system.
AIRB chairman Alf Savage commented in the AIRB 2010 Annual Report that the province’s auto insurance market has seen “greater certainty” in pricing the automobile insurance product. He attributed this to the partial recovery of insurers’ investment returns and resolution of the court challenge to the province’s minor injury cap.
“With those obstacles behind us and what appears to be a stable market in Alberta, the board is now looking forward to working with government and industry to review the premiums regulation with the view to moving away from the current industry-wide adjustment process to a file-and-approve system,” Savage wrote. “The board believes a model that deals with each company on its own merits will provide for more efficient and effective regulation, which in turn should foster greater competition for consumers over the longer term.”
Currently, the board is required under Section 656 of the Insurance Act and Section 4 of the Automobile Insurance Premiums Regulation to conduct an annual adjustment process that uses the industry-wide experience to determine whether premiums for basic coverage on private passenger vehicles should be adjusted.
In its May 2010 submission to the AIRB, the IBC called for a more competitive pricing regime for the province’s auto insurance.
“A more competition-based filing system would be able to take into account the diversity of insurers with different business models and, by incorporating a simplified filing approach, would permit companies to undertake more maintenance-type filings and move quickly to react to changes in market conditions,” the IBC submission reads.
“In the end, consumers stand to benefit from more stable and affordable auto insurance which is the inevitable outcome of a system that encourages and strengthens the competitive market forces that are the hallmark of success throughout most of Canada’s economy.”