Alberta rate board seeks permission to move to file-and-use system for setting auto insurance rates

The Alberta Automobile Insurance Rate Board (AIRB), which regulates the province’s auto insurance rates, is seeking approval from the provincial government to introduce a new file-and-use system for determining auto insurance rates.
In a “pure” file-and-use system, insurers can file for changes in their auto insurance rates with the government and then use the filed rates pending formal government approval. Aspects of this kind of filing system exist in jurisdictions across Canada, although the move to such a file-and-use system would represent quite a change in Alberta’s private auto insurance market.
“If approved by government, working on the implementation of a new regulatory model [would] move Alberta away from an annual industry-wide rate adjustment process to a file and approve process, where the [AIRB would] review companies on an individual basis to determine if rate changes are appropriate and fair,” the AIRB says in its 2008 Annual Report.
If accepted, the AIRB goes on to note, “this model will change the way premiums are regulated from an annual, ‘one-size-fits-all,’ industry-wide adjustment to an individual company application process.”
The intended result, the AIRB notes, is “to reduce market uncertainty, provide quicker response times to rate applications and lower rates over the long term.”
The AIRB says it would retain its authority to accept or decline rate adjustments, but it would be able to respond on a timely basis to changes in market conditions.