May 15, 2003 by Canadian Underwriter
The Insurance Bureau of Canada (IBC) has hailed the release of an investigative report conducted by Nova Scotia’s Utility and Review Board (UARB) into auto insurance pricing within the province, with the findings supporting the insurance industry’s rate increases based on escalating bodily injury claims costs. Nova Scotia recently introduced a bill to freeze auto insurance pricing for the next six months until the beginning of 2004. The provincial government’s action drew criticism from the insurance industry, with suggestion made that some insurers may withdraw from the province after having suffered ten years of mounting auto claims losses. In turn, political representatives have accused insurers of profit taking and subsidizing poor investment returns through excessive cover pricing.
The UARB report states that, “[insurance rates in the province are] not excessive, inadequate, unfairly discriminatory or otherwise unreasonable”. The IBC highlighted this statement in its latest call for auto product reform, noting that, “[the Nova Scotia] government now has the proof it needs to support substantive changes to the automobile insurance system in this province”. The IBC’s Atlantic vice president Don Forgeron adds, “these findings should put to rest, once and for all, the accusation that insurance companies are charging higher premiums solely to compensate for lower investment returns”.