Insurance industry applauds move by Ontario Government to link reforms to cost reductions
TORONTO, March 27, 2013 /Canada NewsWire
MPPs at Queen's Park are debating a motion that calls for a 15% gradual reduction in auto insurance rates. The Government has indicated it plans to support the motion, and has also said it recognizes that reducing costs is the key to reducing premiums. "We support any move that links key reforms to meaningful premium reductions," said Ralph Palumbo, Vice-President, Ontario, Insurance Bureau of Canada.
Palumbo added, "We know that auto insurance costs too much in Ontario. This can only be achieved with a commitment to real reforms that address costs and create a better system for drivers."
These reforms include the need to implement the recommendations of the Ontario Anti-Fraud Task Force, clarify the definition of catastrophic injury based on medical science, cut red tape to let insurers respond more quickly to market forces and eliminate the waiting list for mediation and arbitration cases. High legal fees and delays are a major driver of insurance costs in Ontario.
Palumbo said: "We urge everyone to work with us to develop workable solutions to the complex problems that plague the current auto insurance product."
Finally, to help further clarify the issue around costs, IBC has commissioned an actuarial study to look at the profit margin for Ontario auto insurance in recent years, including 2012. "This is important because of wild speculation recently in the marketplace, perpetrated in part by the Ontario Trial Lawyers Association," said Palumbo. "They've claimed the industry has made billions off the backs of consumers and it's just not so. So we've asked an independent expert to do an analysis. We expect the results of this review in a week."
About Insurance Bureau of Canada
Insurance Bureau of Canada is the national industry association representing Canada's private home, car and business insurers. Its member companies represent 90% of the property and casualty (P&C) insurance market in Canada. The P&C insurance industry employs over 115,000 Canadians, pays more than $7 billion in taxes to the federal, provincial and municipal governments, and has a total premium base of $44 billion.
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SOURCE: INSURANCE BUREAU OF CANADA
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Ontario Liberals to back NDP plan to slash auto insurance
The Ontario Liberal government will move to support an NDP motion to reduce auto insurance rates in the province by 15 per cent.
The reduction in premiums was one of the NDP's budget demands and the party says they will not support the minority Liberals' budget unless the motion is passed.
"Ontarians' auto insurance premiums are the highest in Canada and they need to come down," NDP leader Andrea Horwath said.
"New Democrats have been very clear that we want to see a 15 per cent reduction."
The motion, calling for the province's insurance regulator to gradually cut the premiums, was presented Wednesday.
Premier Kathleen Wynne said she would support the motion.
"Because the underlying principle is we need lower rates for drivers in Ontario and that's what we're working on," Wynne said.
Although Wynne said the Liberal government would support the measures, such motions are non-binding.
Progressive Conservative insurance critic Jeff Yurek said his party will vote against it.
"We can't just support a motion that doesn't have a plan behind it, this is just bumper sticker politics," Yurek said.
Source: CBC News|Toronto