November 6, 2002 by Canadian Underwriter
The industry’s pool for high risk drivers appeared before the Nova Scotia and New Brunswick utilities boards this week to request rate increases in those provinces.
The Facility Association (FA) is seeking a 30% increase in Nova Scotia and a whopping 60% in New Brunswick, which would apply to under 2% of drivers in each province.
FA president Dave Simpson says the increases may seem large but are necessary. “A request for a 30% [or 60%] increase is significant, but the reality is, we’re simply targeting a break even price level. There is no profit in the increase. If gaining a profit was the intent, the increase would be even higher.”
The FA also notes that in Nova Scotia insurers have been assessed $11 million in fees to deal with losses in the region in the past two years. In New Brunswick, that number is $12.5 million.
The FA has been lobbying for rate increases in many regions to dissipate member losses, but also as a means of depopulating its book of business. In some regions of the country, insurer withdrawal and government reluctance to raise FA rates have resulted in FA becoming the best priced market, or even the only market available, rather than a market of last resort.