Toronto, ON (Mar. 27, 2013) – MPPs at Queen’s Park are debating a motion that calls for a 15% gradual reduction in auto insurance rates. The Government has indicated it plans to support the motion, and has also said it recognizes that reducing costs is the key to reducing premiums. “We support any move that links key reforms to meaningful premium reductions,” said Ralph Palumbo, Vice-President, Ontario, Insurance Bureau of Canada.
Palumbo added, “We know that auto insurance costs too much in Ontario. This can only be achieved with a commitment to real reforms that address costs and create a better system for drivers.”
These reforms include the need to implement the recommendations of the Ontario Anti-Fraud Task Force, clarify the definition of catastrophic injury based on medical science, cut red tape to let insurers respond more quickly to market forces and eliminate the waiting list for mediation and arbitration cases. High legal fees and delays are a major driver of insurance costs in Ontario.
Palumbo said: “We urge everyone to work with us to develop workable solutions to the complex problems that plague the current auto insurance product.”
Finally, to help further clarify the issue around costs, IBC has commissioned an actuarial study to look at the profit margin for Ontario auto insurance in recent years, including 2012. “This is important because of wild speculation recently in the marketplace, perpetrated in part by the Ontario Trial Lawyers Association,” said Palumbo. “They’ve claimed the industry has made billions off the backs of consumers and it’s just not so. So we’ve asked an independent expert to do an analysis. We expect the results of this review in a week.”
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.
SOURCE: Insurance Bureau of Canada