THE ALBERTA government has set a ceiling of 5% on passenger vehicle insurance rate increases through Nov. 30, 2018.

Not all insurers will be allowed even that large an increase, the province’s Auto Insurance Rate Board has warned.

An order from Finance Minister Joe Ceci last month made the limit retroactive Nov. 1, 2017.

The time frame refers to AIRB approval dates, not premium implementation dates.

“In addition to the above, the board’s Aug. 14, 2017 decision limiting rate increases to 10% over a 12-month period still applies,” the AIRB said in a notice.

“For example, a company receiving approval for a 7% increase at the board’s October 2017 meeting (prior to the Nov. 1, 2017 date), while eligible for a 5% increase under the ministerial order, will still be limited to a maximum increase of

3% as a result of the board’s 10% rate increase limitation over a 12- month period.

“Note companies receiving approval for rate increases beyond 5% prior to Nov. 1, 2017 with implementation dates for new or renewal business on or after Nov. 1, 2017 are not affected by this order.”

The AIRB noted that in recent years insurers often filed rate increases significantly lower than their rate indications, but more recently some companies filed for double-digit increases.

“In some cases, these companies had not filed within the past 12 or more months, resulting in increases to the consumer that would not normally have been experienced,” the AIRB said.

That led to the board’s Aug. 14 decision that it would be “unlikely” to approve PPV rate increases of more than 10%over a cumulative 12-month period.

“In addition, companies should be encouraged to file more regularly to ensure timely implementation of rate requirements to minimize rate shock to consumers,” the board said.

The AIRB assured stakeholders it is aware that, given the average rate indication and the “continued deterioration of bodily injury claims costs,” insurers would normally be seeking significant rate increases.

With that in mind, and to “maintain filing efficiency,” the AIRB asked companies to:

— File as they normally do providing an overall rate indication;

— Include in the filing what would have been their proposed change if not for the government’s 5% ceiling or the board’s 10% limitation, “as information only,” and

— Provide in the filing their proposed rate level change based on a maximum overall premium increase of 5%, or less if limited by the board’s annual 10% rule.

The government’s 5% cap is applied to overall rates for all coverage, not on a policy or coverage basis, the AIRB said.

“Companies having exhausted their 5% rate increase may still file for segmentation purposes as long as the overall rate change is no greater than zero per cent.”

The rate board approved mostly minor rate adjustments in the fourth quarter of 2017.

Intact Insurance, the dominant auto insurer in Alberta with 18.4% of the market, received two tranches of private passenger vehicle rate approvals. For new business as of Nov. 22, 2017 and renewals effective Dec. 22, 2017, the board approved changes of 0% in basic premiums, -5.5% on additional or optional policies and a total adjustment of -2.1%.

For new business as of Dec. 30, 2017 and renewals effective Jan. 30, 2018, Intact received approval of increases of 0.7% on basic rates, 1.5% on additional coverage and 1% overall.

The government ceiling applies to overall rates, so some companies received approval for higher increases on some products.

Co-operators, with 6.6% of the Alberta auto market, was granted approval for a 12.7% hike on basic coverage, 5.8% on additional and 9.7% total on new business effective Nov. 15 and renewals effective Dec. 15. Total increases on new and renewed business as of Dec. 6 and later were set at 0.3%.

Aviva Canada, with 5.3% of the Alberta auto insurance market, was granted a 6.8% increase on basic insurance, 5.1% on additional and 6% total on new and renewed policies as of Nov. 1, 2017.

The board-approved 10% grid increase that took effect Jan. 1 is not affected by the order.

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