Newfoundland and Labrador to review auto insurance system

Special attention will be paid as to why taxi operators face higher claim costs and insurance rates than the general public

The government of Newfoundland and Labrador is reviewing the province’s auto insurance system in response to steadily rising rates over the last 12 years.

The province’s Public Utilities Board (PUB) will conduct an independent study based on data from closed insurance claims provided by insurers. The review falls under the PUB’s mandate to supervise rates charged by auto insurers.

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The review will occur in an effort to understand the factors that are contributing to rising auto insurance claim costs in the province, according to the government’s announcement on Tuesday. There will also be a public consultation regarding the issue.

“Rising claims costs have resulted in increased premiums and the review will explore various measures to contain these costs,” the announcement states.

The PUB will also conduct a modified closed claims study of taxi rates to determine why taxi operators face higher claim costs and insurance rates compared to the general driving public. The PUB will provide recommendations to reduce claim costs and rates.

The provincial government is promising a “thorough review of all sections” of the auto insurance product, including third party liability, accident benefits, physical damage coverage and uninsured motorist coverage. PUB will also study coverage limits and mandatory versus optional coverage.

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In addition, PUB will examine product reforms and enhancements that have proven beneficial to consumers in other jurisdictions in Canada.

Service NL, the provincial ministry that handles consumer protection, will be involved in the process by examining how automobile insurance rates are set in the province and the process used by the PUB in carrying out its mandate. Further, the department will examine ways to encourage more competition in the marketplace, the announcement states.

This is the first time since 2005 that the province’s auto insurance system has been reviewed. It is expected that any changes motivated by this review to the Automobile Insurance Act will be in place by the fall of 2018.

 

 

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Transcontinental Media G.P.