Canadian Underwriter

IBC to work with Alberta on improving auto product, now that minor injury cap is upheld

December 17, 2009   by Canadian Underwriter

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The Insurance Bureau of Canada says the Supreme Court of Canada’s refusal to hear an appeal against the province’s Cdn$4,000 minor auto injury cap is “good news for Alberta motorists,” and will open the door for a future review of the province’s overall 2004 reform package.
“It marks the end of the uncertainty we’ve had since the constitutional challenges began in the province,” says IBC vice president, general counsel and corporate secretary Randy Bundus. “We can move on and deal with the government on a number of other important matters relating to auto insurance that were frozen or on hold until these things were resolved, so we’re excited about the future of making the product in Alberta even better.”
Bundus said the IBC is now ready to talk to the Alberta government about a couple of aspects of the 2004 reform package, including a review of the province’s treatment protocols and alternatives to the province’s annual, industry-wide adjustment process.
“It has been a few years [since the 2004 reforms] and the treatment protocols were designed to be state-of-the art from a scientific point of view,” Bundus said. “Well, let’s take a look at it.”
Industry-wide adjustment will also be the subject of future discussions. “An industry-wide adjustment every year is not the best way of doing things, so let’s consider better ways,” Bundus said. “I think the government is probably receptive to some of those.
“But as long as that [cap] challenge was in the way, and given how [the courts] had to look at the whole thing as a package, [legislators] were very reluctant to tweak anything, even though they might have wanted to tweak it, because [the case] could have upset that.”
The Supreme Court ruling also means Nova Scotia Premier Darrell Dexter, who made a 2009 election promise to replace the cap with a deductible, will still have the cap — an alternative way to reduce insurers’ costs — in his toolbox.
“Even if I didn’t agree with a particular course a previous government had taken, you’d think I would want all of the tools available to me and not have one found unconstitutional,” Bundus said. “Even if you don’t want to use it right now, you never know 10 years down the road if you might want that tool. It’s still constitutional, so it’s nice to have it in your toolbox.”