January 16, 2005 by Canadian Underwriter
On the heels of publishing its claims study, Newfoundland’s Public Utilities Board (PUB) is asking for public input to a series of insurance hearings.
The first hearings will deal with auto insurance, with the completion of the PUB’s study of closed auto claims. That study, published last week by Mercer Oliver Wyman, suggests there would be significant savings if a cap were put in place on non-economic, or “pain and suffering” awards for minor injuries under specific definitions.
In fact, if the current $2,500 deductible on such awards is removed, placing a $2,500 cap on damages (as has been done in other Atlantic provinces) would result in 11% (or $101 on average) savings, while implementing a $2,500 deductible results in just 3% (or $32 on average) savings.
In order for such savings to materialize under the cap, the definition of minor injuries needs to include: an injury which does not result in permanent serious disfigurement, or permanent serious impairment of an important bodily function caused by continuing injury which is physical in nature.
Taking the $2,500 deductible into account, the average savings with a $2,500 cap under this definition would be 8% (or $71 on average).
Significant savings would also be realized by increasing the deductible from the current $2,500, the Mercer study notes.
The PUB says it is also finalizing its study of the impact of eliminating rating based on age, gender and marital status. And hearings on homeowners, commercial and marine insurance are also expected in the future.
To find out how to participate in the auto insurance hearings, visit www.pub.nl.ca.