Facility Association assesses insurers more than $125 million for losses

The industry’s pool for high-risk drivers is assessing insurers more than $125 million for losses in four provinces. The Facility Association, which insures drivers who have been turned down in the voluntary market due to bad driving records, is asking insurers in Ontario, Nova Scotia, Newfoundland and New Brunswick to anti up $126.6 million for losses sustained in 2002 and prior years.
In Ontario, the tally is a whopping $91.3 million. In New Brunswick, the $17 million charge comes on top of assessments of $9.7 million in 2002, and $2.7 million in 2001. Insurers in Nova Scotia will pay $15.8 million, on top of $9.9 million paid in 2002, and $0.9 million in 2001. And in Newfoundland & Labrador, insurers face a $2.5 million bill, on top of $1.5 million paid out last year.
And, Facility Association CEO Dave Simpson adds, losses for this year are expected to be even worse.
“This is a clear indication that Facility Association rates have not been adequate,” he says. “The result is that, because those insured through Facility Association have not been paying enough to cover costs, the must be subsidized by the entire [provincial] auto insurance market. At the end of the day, good drivers wind up subsidizing higher-risk drivers.”