Statement for Second Reading of Bill 1
By Hon. Brad Green, Q.C.
Minister of Justice
July 30, 2003

Mr. Speaker, as Minister of Justice, it is my pleasure to speak today in support of our government's new legislation new legislation to lower insurance rates for all New Brunswickers retroactive to July 1st, 2003.

Mr. Speaker, New Brunswickers deserve affordable automobile insurance with lower rates. That's why a comprehensive plan to lower rates and make insurance more fair and accessible has been implemented.

The changes we have made include removing discriminatory practices by prohibiting insurance companies from activities such as refusing to insure a person, or cancelling a person's car insurance policy, based on a comprehensive range of grounds such as a person's age, the age of a vehicle, or missing a payment.

The Public Utilities Board's mandate has been strengthened. The board must now automatically review any price increase of more than three per cent in any 12-month period. Any insurer that files a new rate more than twice in a year is subject to a mandatory review by the PUB.

We are allowing insurers to offer group rates and have removed the restriction on territorial ratings for third party liability to encourage insurance companies to offer their products in all regions of New Brunswick.

We have protected the rights of people who are seriously injured to recover all losses for major injuries. For example, a driver who suffers a spinal cord injury can recover full damages for economic loss as well as damages for pain and suffering.

Most importantly, Mr. Speaker, we have capped claims for pain and suffering caused by minor injuries to $2,500. People who suffer minor injuries, however, are still be able to recover economic damages such as lost wages.

Mr. Speaker, insurance companies said clearly that claims for pain and suffering due to minor injuries were their largest cost. We fully expected insurance companies to pass on this savings resulting from the caps on minor injuries to their customers by July 1st.

It is of great concern to our government that consumers have not experienced the rate reductions they need and deserve. As of yesterday, we are sending a message to the insurance industry that they must file their new rates with the PUB or face an automatic rate reduction of 20 percent.

Once the bill is passed, all automobile insurers will be required to file new rates by August 15 for the consideration of the PUB. Companies that do not file new rates by that date will see their rates automatically reduced by 20 per cent. Companies that have already filed new rates will not have to file again.

Mr. Speaker, the Insurance Bureau of Canada is on record as stating that its members want to begin reducing rates, but are unable to do so because of the PUB rate review process. To address this issue, today's bill permits any company that files new lower rates to use those rates until the PUB determines whether its proposed rates are appropriate.

We are also asking the Public Utilities Board to work as quickly as possible to complete their filing and hearing process.

The proposed Bill will also require all insurance companies to refund excess premiums retroactive to July 1, 2003, based on the new lower rates, within 45 days of their new rate being approved by the Public Utilities Board. Companies that refuse to refund or credit their clients will face a fine of up to $5,000 per policy if convicted. As well, they will still have to refund their customers.

Also, a provision has been added requiring six months notice from any insurance company wishing to stop offering its automobile insurance products in New Brunswick. Any company that tries to stop offering its products before the six-month term expires will face a fine if convicted.

Mr. Speaker, for the protection of the health and safety of all New Brunswickers, auto insurance is mandatory in this province. However, it is because this important protection is mandatory that we as legislators and elected officials must to our utmost to ensure that automobile insurance in this province is fair, accessible and affordable.

In the spirit of co-operation, our government has committed to working with the members of the Opposition to make these changes possible. We remind all members of this House that insurance is an issue of critical importance to all New Brunswickers and we look forward to a constructive and healthy debate on this bill.

Thank you, Mr. Speaker.