Ontario promises action to address rising commercial insurance rates, critics urge regulation
October 26, 2020 by Shawn Jeffords - THE CANADIAN PRESS
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TORONTO – Under pressure to address rising commercial insurance rates blamed on the pandemic, Premier Doug Ford promised this week to take action to stop what he called “gouging” by some companies in the sector.
Ford twice this week has told insurance firms to rein in what he described as “astronomical” rate increases to businesses or outright denial of coverage.
His comments followed calls this week from various municipal and opposition politicians for the province to clamp down on the insurance industry with further regulations.
Ford expressed anger Thursday, using banquet halls as an example of an industry hard-hit by the pandemic that now also faces sky-rocketing insurance premiums.
“They’re absolutely just refusing to insure people, we don’t play that game,” Ford said. “You guys don’t get to get all the cream and gravy … and just slough off everything else and think we aren’t going to insure it.”
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When pressed for details of his action plan, Ford said he was working with Finance Minister Rod Phillips, who is expected to deliver the provincial budget next month, to address the issue.
“I’m on to these guys,” Ford said. “The people are the priority, not the big insurance companies making gazillions of dollars. So I’m coming.”
Phillips’ office said this week that while the province regulates the auto insurance sector, it currently does not oversee commercial insurance.
A spokeswoman for the minister said the government was watching the insurance companies and their handling of the needs of the hospitality sector during the pandemic.
Emily Hogeveen said Phillips had also had discussions with the head of the Financial Services Regulatory Authority of Ontario – the province’s fiscal regulator – on the issue.
“The minister’s message to insurance companies has been clear – we expect you to treat your customers fairly. We will be closely monitoring the situation to ensure companies are adhering to a high standard of conduct,” she said in a statement. “All options are on the table.”
A spokesman for the Insurance Bureau of Canada said claims costs for commercial insurance were increasing across a number of sectors before COVID-19.
The pandemic has compounded “affordability and availability” of insurance, Steve Kee said in a statement.
“Insurance claims costs in general are on the rise, while Canada’s insurers have been working to keep rate increases to a minimum,” he said.
Related: Some long-term care homes can’t get insurance, could be forced to close: association
Kee said the commercial insurance market is competitive and it could be possible for businesses to find lower rates by shopping around.
“IBC continues to work with our members and other partners to find solutions to ensure that commercial insurance remains affordable,” he said.
Toronto Mayor John Tory has pressed the province to step in and protect restaurants and food delivery services, which are reporting dramatic insurance rate hikes.
“I fully support any action to be undertaken by the province to help address this, to support businesses who are simply trying to be good and continuing customers of these insurance companies,” he said.
Long-time Ontario legislator Jim Wilson, a former interim leader of the Progressive Conservative party who now sits as an independent, made a surprising call earlier this week for strict regulation of the insurance sector.
Wilson said he thought deeply before making the impassioned request during a session at Queen’s Park.
Related: Ontario to provide COVID-19 liability protection to workers and some organizations
But after hearing from a number of condominium corporations in his riding north of Toronto about dramatic increases to their insurance rates he felt he had to act.
“What they’re hearing from brokers is that the industry blames that on COVID claims and severe weather claims,” he said. “That’s just bogus … I mean, they can’t be having COVID claims yet, it’s just too early. They need to justify the need for these exorbitant rates.”
Wilson, who has held a seat in the legislature since 1990, said governments of all political stripes have promised and failed to regulate insurance rates because the industry has a powerful lobby.
“I don’t know if we’ve ever truly had the Ministry of Finance or the regulator take an independent look at what their finances are and get to the bottom of why rates are doubling,” he said.
NDP Leader Andrea Horwath has been advocating for further regulation of the industry during the pandemic, pressing the government to protect businesses.
“The insurance industry has been running amok in this province for years now,” she said. “Mr. Phillips needs to step up to the plate and do something about it.”
Ford’s comments come after a group representing Ontario’s long-term care homes said the facilities are having trouble securing liability insurance for COVID-19, a situation which could force some of them to close.
Feature image by iStock.com/stockstudioX
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The Ford gov needs to have gov insurance for all wheel chair vans ,taxis New truck and bus drivers. Also any truck bus,van that carries passengers or goods should optional insurance like B C by the government. All hotels, hostels , homeless shelters need gov assistance with insurance. I am camped out of a insurance company head office in Goderich
Many people unhappy with their insurance options.
More regulation is not the answer. Get some smart people together to find a better solution.
Long-term care homes in Ontario sound like hellish places. I wouldn’t insure them. As a general rule, I’d say that if an industry needs the army to intervene in their business operations to prevent half their clientele from dying, you might want to think twice about insuring them.
Summer Camps, Not For Profits and Charities are all deeply affected by the insurance gouging. The camp charity which I am associated with can cover one year’s increased premium, but with pending lower fees incoming, we are in danger of closing after 90 yrs of operation with mostly volunteer labour. Loss of these Camps and NfPs and Charities will feed land grabbing greed and undermine the support that Charities in general provide for the people of Ontario. It would be interesting to see the profit schedule of these companies and how much, if that is a thing, share holders are getting out of this crisis. Commercial General Insurance, Abuse and Harassment Insurance, Property Insurance, Directors and Officers Insurance, Errors and Omissions, and other protective insurance should be for protection, not for investment. Do we need a new model for insurance? Government regulation may not be the answer, but there will not be change with out a big threat.
This government has had a knee jerk reaction to everything, and then when they act, it’s too little, too late.
Home Inspector E&O Insurance has gone up from $3,000 in 2018 to $12,000 for 2022.
Fewer people are getting inspections because this government failed to regulate the Inspectors and allowed Realtors to run riot, yet passed the “Trust in Real Estate Act”, which has done nothing to protect consumers.
Insurance companies are pleading poverty yet the last three years has seen massive mergers and acquisitions in the insurance industry, leading to a near duopoly, and the regulators have done nothing.
Time for a new government?
My commercial insurance for an office with an apartment above which I live in as owner went up 31%….outrageous!!! and I pay contents insurance on the apartment, above and beyond the commercial rate increase.