Fraud reforms welcome but rate reductions will take time, says Ontario broker association

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Toronto, ON (May 2, 2013) – Today, Ontario’s Minister of Finance, the Hon. Charles Sousa, announced the government’s proposed plan to lower auto insurance premiums in Ontario that will be contained in the May 2nd Budget.

The Insurance Brokers Association of Ontario (IBAO) is encouraged that the government intends to implement key measures of the Auto Insurance Anti-Fraud Task Force as a central part of its plan to lower auto insurance premiums.

“While the proposed reforms are welcome, we are very concerned that consumer expectations for a 15% reduction will be very high,” said IBAO CEO Randy Carroll. “It’s important to underline that the reforms underlying the promised reductions will take time and must be done responsibly. This will require the combined effort of the government, the opposition and the industry. We do not want to set a false expectation for consumers.”

The targeted reduction is tied to reforms and cost reductions related to combating fraud that will require the passage of legislation. Without that legislation any potential decrease will be delayed.

“The affordability of auto insurance for our customers is of prime concern to the IBAO,” added Carroll. “As an Association we have been urging the government to deal with the fraud problem and we are glad to see that they intend to do so. The challenge now is to get the needed legislation passed as soon as possible.”

The Anti-Fraud Task Force report estimates that fraud is costing Ontario drivers up to $1.6 Billion per year. The key recommendations of the report include health clinic regulation, tow truck regulation and expansion of the Financial Services Commission of Ontario’s (FSCO) investigative and enforcement authority. Today’s announcement commits to regulating health clinics, increasing FSCO’s authority and compelling insurers to refile for lower rates once the reforms are implemented.

About IBAO

The Insurance Brokers Association of Ontario is a ‘not for profit’ association that represents and serves the interests of over 12,000 independent Property & Casualty Insurance Brokers in the Province of Ontario. For information about IBAO, visit www.ibao.org or www.ibao.org/blog to receive timely news and information updates. You can also follow IBAO on Twitter or join the IBAO Facebook Fan Page.

SOURCE: Insurance Brokers Association of Ontario