IBC calls on select committee to reform auto insurance to benefit drivers in New Brunswick

FREDERICTON, NB, June 12,2000 – The Insurance Bureau of
Canada (IBC) is urging the provincial government to make changes to auto insurance in New
Brunswick. In its submission to the Select Committee on Private Passenger Automobile
Insurance today in Fredericton, IBC has provided various models for auto reform to
maintain an affordable and available product for New Brunswick drivers.

The role of the select committee is to study auto insurance
issues in New Brunswick, including availability and pricing, and possible improvements to
the current system. The committee will make recommendations for change to the government.

“Research shows the main reason for rising auto rates
is soft tissue injury claims. Even though accident rates have dropped in each province in
the region, the number of bodily injury claims continues to rise,” says Don Forgeron,
IBC’s Atlantic vice president.

“There needs to be a balance between auto insurance
premiums and compensation provided to accident victims. If the insurance industry pays out
increasingly higher amounts in claims under the current system, people could end up facing
higher premiums,” says Mr. Forgeron.

“Car insurance premiums in each province in the region
have increased for a reason – the growing practice of hiring a lawyer after every car
accident,” says Forgeron. “It’s no longer simply about helping people get well
following an accident. Now, it’s about how much extra money a person can receive for even
the most minor of injuries – such as a sore neck or sore back.”

IBC has told the committee that one model for auto reform
is not necessarily better than another model – that each option has unique characteristics
that should be considered before changes are made to the current system.

“Those opposed to any type of reform have suggested
that our industry is proposing a ‘no fault-only’ solution. The reality is that we’ve been
encouraging a broader discussion at every opportunity – one that should involve the
citizens of New Brunswick – not just single interest groups,” says Forgeron.

“Consumers in New Brunswick deserve a type of auto
insurance that will ultimately benefit them through cost-savings, and it’s important for
the select committee to make recommendations that would provide such a product.”

“We have to get back to the real reason for insurance
– to return injured persons, as nearly as possible and as quickly as possible, to their
condition before an accident,” Forgeron says. “We have to find a way to do this
at the lowest possible cost to all consumers.”

The Insurance Bureau of Canada is the national trade
association of the private property and casualty insurance industry. It represents about
200 companies that provide more than 90 per cent of the non-government home, car and
business insurance in Canada. For more information or to view IBC’s submission to the
select committee, visit the media section of our Web site at