The Insurance Bureau of Canada (IBC) has reacted hotly to an actuarial study conducted by Mercer Oliver Wyman Actuarial Consulting Ltd. on behalf of the government of Newfoundland which suggests insurers are writing homeowners’ business at a significantly higher profit margin than is the case. The study, titled "Homeowner, Commercial Property, Liability and Marine Insurance" indicates that insurers have written homeowners’ insurance in Newfoundland and Labrador at an average profit of 13% above premium over the past five years. The latest government sponsored actuarial study follows on a similar investigation which led to the province’s auto reform legislation under Bill-30 (which insurers generally have found to be unacceptable, leading several companies to signal their intent to withdraw from the market). The actuarial study suggests that insurers should be limited to a profit margin on homeowners’ insurance of around 5%. The government plans to hold hearings through its Public Utility Board (PUB) in coming months to gather feedback on the findings of the latest study. The IBC maintains that insurers have experienced a loss of 3% on homeowners’ premiums over the past five years, and the proposed 5% profit margin put forward in the actuarial study would be inadequate to accommodate catastrophic events. "[The study] is based on erroneous assumptions and reaches incorrect conclusionsIBC looks forward to highlighting each and every error at the public hearings on insurance to be held this fall by the Public Utilities Board," says Don Forgeron, vice president of the Atlantic region at the IBC. He points to the heavy snows of 2001 which caused hundreds of oil tanks to rupture in the region. "Many residents also remember the infamous windstorm of 1992 that left St. John’s without power for days and caused $8.2 million in insured damage. These events inflict millions of dollars in damage and insurers must be ready for them," he adds.