November 28, 2003 by Canadian Underwriter
The Dominion of Canada General Insurance Co. CEO George Cooke is taking issue with comments made by former Ontario Minister of Enterprise Jim Flaherty.
Cooke notes that his company’s Ontario auto insurance rate filing in September reflected the fact that changes made by the previous Conservative government reflect that there were no real savings in the bill, despite Flaherty’s comments.
“Actions taken by the Eves government to provide rate relief to Ontario automobile drivers would not have resulted in a 10% reduction in premiums [as Flaherty asserts],” Cooke notes. It was well understood by both Financial Services Commission of Ontario(FSCO) officials and the Conservative leadership that the actual amendments to the Insurance Act approved by the Eves government would only result in a cost saving of approximately 5%.” Given rate inadequacy of 5% as reported by independent actuaries, the net result was no rate relief from the auto insurance reforms. It’s a wash, and The Dominion’s rate filing reflected that reality.”
Cooke says further reforms were required in order for rate relief to be achieved.
Cooke also questions how a politician would have knowledge of a company’s rate filings, given that they are made on a confidential basis to FSCO. “Rate filings are made on a confidential basis, in part, to preserve and ensure the independence of the arms-length regulator [FSCO].” he says. “If elected officials represent knowledge of such confidential filings, then I expect the industry would be very concerned.”