Alberta Getting Tough On Auto Insurance Regulations
The province of Alberta has proposed Bill 39, the Enhancing Consumer Protection in Auto Insurance Act. This Act will bring a number of changes to the auto insurance industry with an attempt to better protect consumers from rising premiums. Doug Horner, Alberta Minister Of Finance and President of the Treasury Board explained, “Albertans have told us they want increased oversight in their auto insurance rates and we’ve listened. These reforms will set insurance rates that are fair for Albertans and make our already strong auto insurance system even better,”.
While Alberta already has legislation regulating mandatory insurance premiums — like third party liability — the proposed changes would ensure optional premiums, like those allowing drivers to choose whether they want to be covered for damage to their own vehicles, will also be regulated. Heather Mack, Director of Alberta Government Regulations for the Insurance Bureau of Canada, is confident that consumers will be pleased with the new changes aimed to keep premiums down.
The province of Alberta is also proposing a ‘file and approve’ system that would allow individual insurers to apply for premium adjustments on an as-needed basis rather than working through the annual, industry-wide rate adjustment. “Whereas IBC was the one to present before, just once a year, now companies can present individually at any time. That will increase competition, so that’s a good balance,” said Mack.
However, some groups are not convinced that this legislative measure will contribute to a long-term gain for the industry or its consumers. Derek Fildebrandt, Alberta Director for the Canadian Taxpayers Federation, cautions the dangers of artificially reducing certain premium rates through regulation. “When the government tries to keep prices down artificially in one area, premiums might go up in another area. One group of drivers will have to pay eventually, and we don’t know which demographic that will be…We’d all be better off just getting bureaucrats out of the business of insurance.”
Other changes proposed for the auto insurance system would involve moves to ensure Albertans get improved access to health care after a collision. However, there have been no plans for addressing other components of Alberta’s automobile insurance system, such as the definition of minor injury and the related cap on payouts for minor injuries.
Posted on November 22nd, 2013
