Government’s Actions to Reduce Car Insurance

Fact Sheet

• Introduced a motion in the Legislative Assembly to form the Select Committee on Private Passenger Automobile Insurance. This motion was adopted unanimously. Following a series of meetings across the province, the committee’s report containing its recommendations was tabled on Nov. 22, 2002.
  
• Responded to the Select Committee’s report on March 28, 2003 with the most comprehensive automobile insurance reforms ever undertaken in the province. The Insurance Act was amended and strong new regulations were put in place to accomplish the following:
  
• Remove discriminatory practices -- Insurers are now prohibited from refusing to insure a person because of the age of the person, the age of the car, a lapse in coverage, refusal of coverage by another insurer, a history of insurance with the Facility Association, a member of a group plan left the group, claims under a policy for which the person was not at fault, missing one premium payment.
  
• Enhance the powers of the Public Utilities Board (PUB) – The PUB is reviewing all current auto insurance rates and determining if they are reasonable and justified. The PUB must automatically investigate any price increase of more than three per cent in any 12-month period.
  
• Cap claims for pain and suffering caused by minor injuries at $2,500 -- People who suffer minor injuries will still be able to recover economic damages such as lost wages. Insurance companies said this was their largest cost.
  
• Protect the Rights of New Brunswickers – New Brunswickers who are seriously injured can still recover all losses for major injuries. For example, a driver who suffers a spinal cord injury can still recover damages for pain and suffering and economic loss.
  
• Allow insurers to offer group rates.
  
• Remove the restriction on territorial ratings for third party liability – This restriction was removed to encourage insurance companies to offer their products in all regions of New Brunswick.
  
• On June 18, 2003, Premier Bernard Lord brought the issue of automobile insurance before the Council of Atlantic Premiers. During the meeting, the premiers agreed to take a regional approach to lowering automobile insurance rates and to harmonize legislation and regulations respecting automobile insurance in Atlantic Canada.
  
• The Council of Atlantic Premiers also agreed to establish an Auto Insurance Task Force, reporting directly to premiers to prepare draft harmonized legislation and regulations for auto insurance for adoption by each Atlantic Province. The task force will also conduct and complete a comprehensive study of the full cost-benefit and legal implications of establishing an Atlantic public automobile insurance system.