THE INSURANCE Bureau of Canada is launching an ad campaign to inform the public about the auto insurance review currently taking place in Newfoundland and Labrador.
“We want to do what we can to provide people with factual information and look at other provinces who have more sustainable premiums and (show) that auto insurance can work for all parties,” said Tom O’Handley, manager of government relations for IBC Atlantic.
“We can’t just do a review every 14 years. There are steps that the government can take here.”
IBC says it has also set up a website and email to clear up misconceptions about the province’s auto insurance woes.
“We are letting people know that the system isn’t working but it’s not working for insurers either,” he said.
“Insurers are not making any profits and it’s not working for anyone so there needs to be measures that the government can put in place similar to other jurisdictions.”
As promised last year, the Newfoundland government is conducting an auto insurance review that includes a closed-claims study.
It intends to pass legislation by this fall to reform the auto product, a step Mr. O’Handley said is long overdue.
The closed-claims study is expected to end by February and the province’s Public Utilities Board is receiving electronic submissions ahead of a public session, the date of which has yet to be decided.
Auto insurance in other Atlantic provinces is still profitable for insurers but Mr. O’Handley said that is not a reason to be complacent.
In fact, Mr. O’Handley said the situation in Newfoundland highlights the importance of constant monitoring of the status of auto insurance across every jurisdiction.
He noted that Nova Scotia is set to review its auto insurance scheme this year and the IBC is already preparing for that.
“We are seeing rising claims costs there and we are working with members to better identify the reason behind that,”
Mr. O’Handley said.
“We are still in the process but will make a recommendation as we drill down further.”
But the situation in Newfoundland is by far the worst in Atlantic Canada.
“The premiums speak for themselves — they are 40% higher than in Nova Scotia. and New Brunswick where the markets are healthier and more competitive,” he said. “But we want to keep our eye on things and it shouldn’t have to escalate to crisis mode where it is now in Newfoundland.”
Mr. O’Handley said it has taken the Newfoundland government far too long to respond to that crisis com-pared to Nova Scotia where a review is undertaken every seven years.
“It seems to be a better system when it is part of legislation to take an active look,” he said. “The ideal situation would be constant monitoring.”
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