Toronto, ON (Feb. 4, 2013) – Today Ontario NDP Leader Andrea Horwath announced a list of priorities she has for new Premier Kathleen Wynne. One of these recommendations would give Financial Services Commission of Ontario (FSCO) a mandate to reduce auto insurance rates by 15 per cent.
Responding to today’s news, Insurance Bureau of Canada (IBC) says band-aid solutions may score political points but for the long term all stakeholders need to continue to push for needed reforms and fight fraud. Auto insurance fraud in Ontario costs as much as $1.6 billion a year and drives up costs for all Ontario drivers, who currently pay the highest auto insurance premiums in the country.
“It’s about time they stand up for Ontarians and say fraud must end,” said Ralph Palumbo, Vice President, Ontario, IBC. “If the NDP was interested in saving consumers money they would be supporting government reforms and the Anti-Fraud Task Force’s recommendations, not throwing around arbitrary numbers.”
He added, “the key to lower premiums is lowering costs and that is why we support the need for auto insurance reform in bodily injury claims; the mediation and arbitration system; and a clear and science-based definition of catastrophic impairment. We have acknowledged that auto insurance rates are too high in Ontario. We know consumers want an affordable system that works and we have been listening. We continue to work with government and Ontarians to implement reforms and we urge the NDP to work with us.”
The Ontario auto insurance industry lost an average of nearly a billion dollars a year between 2008 and 2010 on the auto product, including a $1.7 billion loss in 2010. Of the $233.2 million earned in profits in 2011, there were more than $10.3 billion in written premiums. Most of the money collected is returned back to claimants. “I find it hard to believe this constitutes soaring profits,” added Palumbo.
“Every step we all take to reduce fraud and every measure that is implemented that will get at the root cause of unnecessary and unwarranted costs will benefit every driver in this province,” added Palumbo.
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.
To view media releases and information, visit the media section of IBC’s website at www.ibc.ca and for IBC on Twitter follow @insurancebureau.