IBC meets with Ontario NDP to discuss auto insurance premiums

The Insurance Bureau of Canada is meeting with Ontario NDP leader Andrea Horwath Friday to discuss auto insurance rates in the province, after several public clashes in opinion.

Horwath and her party have said they want a 15% reduction in auto insurance premiums in the province by March of next year, asking the Liberal government to mandate such a change under the Financial Services Commission of Ontario (FSCO).

IBC, however, has called that reduction arbitrary and a band-aid solution to the greater problem of fraud, including exaggerated claims and organized crime (such as staged collisions).

IBC said it asked for Friday’s meeting last December. “We are happy that we finally have the opportunity to talk about our plan to reduce auto insurance costs,” Ralph Palumbo, vice president for Ontario at IBC. “We know high premiums are a real problem and we need to work together on a real solution.”

According to IBC, key parts of the industry plan to reduce rates includes:

• Implementing the recommendations of the government’s Anti-Fraud Task Force;
• Implementing a more effective and efficient mediation and arbitration system at FSCO; and,
• A new and clear definition of catastrophic impairment.

The NDP suggests that insurers have been saving 25% per insured driver since industry reforms in September 2010, but that consumers have seen their rates increase.

IBC, however, says that the Ontario auto insurance industry lost an average of nearly a billion dollars a year between 2008 and 2010 on the auto product, including a $1.7 billion loss in 2010.