Liberals launch public auto insurance petition in Alberta

In response to the Alberta government’s auto insurance reform package which was announced last month, the opposition Liberal Party has set in motion a public petition to gather support for the introduction of a public auto system. The province’s premier Ralph Klein has rejected the idea of a public auto insurer for Alberta, choosing to stick with a private-sector system albeit with tough restrictions on rating criteria.
Liberal leader Kevin Taft believes that a public auto insurance system based on the model of the Insurance Corp. of British Columbia (ICBC) would be the best option for Alberta. He notes that ICBC is not subsidized by taxpayers’ dollars, and that the crown insurer is able to deliver cost-effective coverage to all drivers due to the fact that rates are not determined according to age and gender. Instead, he adds, auto rates are set according a driver’s record and the type of vehicle being insured. As such, Taft says public-run services can be more efficient than private sector solutions, which he believes is the case with regard to auto insurance. The Liberals claim that a public auto insurance system would result in an average 35% reduction in pricing of cover.
The Alberta government’s auto insurance reform legislation is expected to come into place by the beginning of October this year. The package includes measures preventing insurers from applying age and gender rating criteria in their pricing. The rate freeze introduced by the government earlier this year will also remain in place until the summer of 2005.