November 30, 2001 by Canadian Underwriter
The Insurance Bureau of Canada (IBC) is increasing pressure on Newfoundland’s government to introduce reform to the province’s auto insurance market after years of escalating losses resulting mostly from personal injury claims.
Earlier this year the IBC approached the Newfoundland government with a proposal aimed at curtailing the rise in personal injury claims while at the same time limiting the potential for dramatic premium hikes. The IBC also recently conducted a survey among residents within the province to determine their response to the problem. IBC figures suggest that over the past decade auto insurance costs have more than doubled, and that the cost is likely to rise by another 47% over the next three years if action is not taken.
IBC vice president of the Atlantic region, Don Forgeron, says that settling soft tissue claims is the largest single factor in the rising cost of auto insurance. Forgeron points out that provincial governments representing about 70% of Canada’s population have already placed restrictions on the right to sue. Similar action needs to be taken in Newfoundland to avoid the need for significant rate increases, the IBC warns.