TORONTO, April 2, 2004 - The Select Committee on Public Auto Insurance released its report today, recommending that the government of New Brunswick implement a government run automobile insurance plan. According to the report, this initiative will provide rate relief and stability for the province's insurance consumers.

"This is nonsense," said George Cooke, President and Chief Executive Officer of The Dominion of Canada General Insurance Company. "The changes proposed come with a significant cost: substantially reduced benefits, denial of the right to sue for personal injury, higher prices for young females and older drivers and reduced private sector investment in New Brunswick."

During the past year, private sector insurance companies have worked closely with the New Brunswick government to fast-track badly needed reforms.

"Prior to these reforms, the average premium in the province was $1,212", stated Mr. Cooke. "One year later, the average premium is $1,020. Furthermore, the reforms approved by the government made it possible for insurance companies to move policyholders from the Facility Association to more reasonably priced private markets, resulting in a 40% reduction in the number of New Brunswickers insured in the Facility, and the industry expects this trend to continue. Interestingly, the Report promises average premiums of $993, a mere $27 below the actual average premium currently in place, which I expect to drop further. However, in addition to the $993, under the public auto plan, consumers would pay a 5% surcharge (another $49.65) to cover the cost of setting up the bureaucracy."

"At the end of the day" Mr. Cooke explained, "consumers will pay more in premiums, and receive less benefits than are available with the current product."

The Committee recommends that the New Brunswick government spend $82-million to expropriate private investment interest in the province.

"At the same time" noted Mr. Cooke, "Business New Brunswick will spend $37 million to attract new private investment to New Brunswick in the next 12 months. In this scenario, the government is sending confusing signals to much needed private investors."

"The reforms introduced by the Lord government and supported by the Liberal opposition only a year ago are working" said Mr. Cooke. "Prices are lower, markets are returning, the Facility Association is reducing. The industry, together with the New Brunswick government, reacted to the problem and produced very impressive results in less than a year. New Brunswick should stand as an example representing what can be accomplished when the private sector and government work hard to protect the consumer. Insurance consumers need to understand that government sets the level of benefits and the findings of this committee demonstrate that premiums are based on the claims costs and not on the system of delivery."

Furthermore, there are hidden costs embedded in a government run plan. Private capital will be cautious about investing in the province. More importantly, dollars desperately needed to fund Health Care and Education will be foregone.

"I'm sure that these considerations were part of what drove the Atlantic Premiers' Task Force to openly reject the imposition of public auto insurance when their report was issued last fall" said Mr. Cooke.

"If the recommendations of the Committee are accepted by the government, a strong message will be heard in the private capital markets: You may not be welcome in New Brunswick any longer. And be wary, any investment might be confiscated".

The Dominion has served New Brunswick consumers since its founding by Sir John A. Macdonald in 1887. As a wholly-owned Canadian company, operating coast to coast, we look forward to continuing and improving on this tradition in the future."