December 20, 2002 by Canadian Underwriter
The Insurance Bureau of Canada (IBC) is expressing dismay over the package of reforms to Newfoundland’s auto system introduced in Bill 28 this week. In a release, the IBC says the reforms will not help control the costs of auto insurance claims and therefore premiums.
“This bill will not improve the system in the manner consumers want namely controlling auto insurance costs,” says Don Forgeron, vice president of IBC’s Atlantic division. “We believe consumers want an immediate solution to the problem, not more government regulations focused only on the symptoms.”
The bill made no reforms to the tort system and introduces underwriting rules limiting insurers’ right to refuse coverage based on age, sex, and other factors.
“With this legislation, the government is effectively tying the hands of insurance companies by putting in place unrealistic underwriting restrictions which will only hinder competition and provide consumers with less choice in the marketplace,” Forgeron says.
He says the government is trying to “micro manage” the insurance system rather than dealing with the problem of rising claims costs, despite admission by the government that these costs are part and parcel of rising premiums. He also takes issue with a proposal put forward by Government Services Minister Walter Noel, who introduced Bill 28, to look at a “choice” system for tort coverage on injuries. The IBC view is that such a system would be ungainly for a province of only 500,000 drivers.