The Newfoundland government is putting auto insurance reform on the table, releasing a discussion paper that proposes restrictions on the ability to make claims for pain and suffering as a result of minor accidents. Medical and financial claims would remain accessible, and claims for pain and suffering on permanent or serious injury cases. Government Service and Lands minister Walter Noel says the new restrictions are a response to rising claims costs, and rising premiums. “The major cause of increased insurance costs is claims for non-economic loss,” he notes. “People have to decide whether they want lower rates likely to benefit many, or the retain option to sue likely to benefit few.” If the restrictions are put in place, the government is prepared to mandate an immediate reduction in third party liability rates, to the tune of about 35%. Other key proposals include mandatory accident benefits coverage and restrictions on the reasons insurers can deny coverage. There will also be clearer communication with insureds who are placed in the Facility Association (FA) as to the reasons for that placement. Concern has been raised over the high number of Newfoundland motorists being placed in the FA, a pool for high-risk drivers. The province is also proposing that the Property and Casualty Insurance Compensation Corporation (PACICC), the body which cover claims in the event of insurer insolvency, cover 100% of unearned premiums in this province. With the failure of the Hiland insurance company about five years ago, insurance superintendent Winston Morris had raised concerns that PACICC, unlike U.S. guaranty funds, did not cover the full 100%. Feedback on the discussion paper will come through November.