June 20, 2004 by Canadian Underwriter
Comments made the New Brunswick NDP leader Elizabeth Weir are off the mark, says the Insurance Bureau of Canada (IBC).
Weir stated that insurance rate decreases in the province were amongst the lowest in the country, but the IBC says in fact when rate decreases currently filed by insurers are approved, N.B.’s rates will actually have dropped more than any other province’s. As well, the industry has provided $32 million in rebates to drivers.
N.B. is the only province which has seen rates fall for two years in a row, notes IBC Atlantic Region vice president Don Forgeron. And insurers representing 80% of the market have filed for rate reductions as high as 11% which have been held up by the province’s rate approval process, which prevents insurers from filing for reduced rates until July 1.
After the July 1 approvals, average auto insurance rates in N.B. will be less than $1,000, and lower than the average rate estimated under a public insurance system advanced by Weir.
“The fact that we can bring rates down even lower than the $993 proposed by the Weir report – without spending two years and $100 million proves beyond a doubt that competition and choice can out perform a government-run monopoly every time,” says Forgeron. “Reducing the number of drivers insured through Facility Association to 2.5% of the market in just three months has also resulted in huge savings for many people.”
He adds that a “no-frills” auto policy proposed by the industry would bring rates well below that promised by a public system, as low as $750 to $850 on average.
“It is easy to deal in sensational headlines and half truths but it’s now clear that legislative reforms introduced by the N.B. government last year have addressed the underlying problems that caused premium increases,” Forgeron adds. “In fact, the legislated cap on pain and suffering awards for minor injuries has been so successful that other governments – including those in Nova Scotia, PEI and Alberta – have followed New Brunswick’s lead.”