Changes Proposed for Alberta’s Auto Insurance Industry
Alberta’s provincial government is proposing changes to province’s auto insurance system, to better protect consumers from rising premiums, while still giving individual companies more opportunity to make their case for increased pricing.
“Albertans have told us they want increased oversight in their auto insurance rates and we’ve listened. These reforms will set insurance rates that are fair for Albertans and make our already strong auto insurance system even better,” said Doug Horner, Alberta minister of finance and president of the Treasury Board.
The “Enhancing Consumer Protection in Auto Insurance Act” (Bill 39) would allow both mandatory and optional auto insurance premiums to be regulated by the independent Automobile Insurance Rate Board.
Alberta already has legislation regulating mandatory insurance premiums — like third party liability — these proposed changes would ensure optional premiums would also be regulated.
Heather Mack, director of Alberta government relations for the Insurance Bureau of Canada, said consumers should be pleased with increased regulations, which she said could keep premiums down.
“This is definitely good for consumers. But at the industry level, we want less regulation. We want more flexibility, more competition.”
Another proposed change could somewhat appease the industry, Mack said. A file and approve system is being proposed, where each insurer could apply for premium adjustments on an as-needed basis instead of an annual, industry-wide rate adjustment.
“Whereas IBC was the one to present before, just once a year, now companies can present individually at any time. That will increase competition, so that’s a good balance,” Mack told the Calgary Herald newspaper.
But Derek Fildebrandt, Alberta director for the Canadian Taxpayers Federation, told the Herald it could be dangerous to artificially reduce certain premiums through increased regulation.
“When the government tries to keep prices down artificially in one area, premiums might go up in another area. One group of drivers will have to pay eventually, and we don’t know which demographic that will be.
Other changes proposed for the auto insurance system would involve moves to ensure Albertans get improved access to health care after a collision. As well, the Insurance Act could be strengthened in the area of solvency requirements for insurance companies to improve general market conduct. Changes are not being proposed for other components of Alberta’s automobile insurance system, such as the definition of minor injury and the related cap on payouts for minor injuries.
Excerpted from the Calgary Herald
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