TORONTO, Nov. 27, 2003 – “Actions taken by the Eves government to provide rate relief to Ontario automobile drivers would not have resulted in a 10% reduction in premiums,” stated George L. Cooke, president and chief executive officer of The Dominion of Canada General Insurance Company in response to assertions made by former Minister of Enterprise, Opportunity and Innovation, James Flaherty.
“It was well understood by both Financial Services Commission of Ontario (FSCO) officials and the Conservative leadership that the actual amendments to the Insurance Act approved by the Eves government would only result in a cost saving of approximately 5%. Coupled with a rate inadequacy of approximately 5%, as estimated by independent actuaries”, Mr. Cooke continued to explain, “this works out to no change in premiums. It’s a wash, and The Dominion’s rate filing reflected that reality.”
Further reforms were required to achieve 10% reductions in premiums.
All insurance companies were directed to file automobile insurance rates with FSCO on September 30, 2003. These rate filings are made on a confidential basis with FSCO, which operates in an arms-length relationship with the elected government.
“Rate filings are made on a confidential basis, in part, to preserve and ensure the independence of the arms-length regulator.” stated Mr. Cooke. “If elected officials represent knowledge of such confidential filings, then I expect the industry would be very concerned.”