A spokesperson for Alberta’s UCP government confirmed to Global News on Friday afternoon that it will not continue to limit auto insurance providers to a maximum five per cent annual rate hike as the previous government had done.
“Our government will allow the Automobile Insurance Rate Board to fulfill its mandate in setting auto insurance rates,” Charlotte Taillon, acting press secretary for Alberta Treasury Board and Finance, wrote to Global News in an email. “We believe this independent board is best positioned to evaluate the health of the insurance market and we respect their expertise and experience in the field.
“To be clear, companies still must go through the rate board to justify increases.”
Earlier this year, the Insurance Bureau of Canada (IBC) said insurers were being forced to make changes to how they operate, partly as a result of the cap.
“Claims costs have been spiraling out of control for the past few years,” Celyeste Power, IBC vice-president of Western Canada Insurers said in May. “Insurers are losing up to $0.30 on every single dollar that they’re bringing in.”
Watch below: (From May 13, 2019) Albertans are being cautioned by industry professionals about roadblocks when it comes to getting auto insurance. Tomasia DaSilva explains what’s driving some significant insurance changes in the province.
Taillon’s email to Global News suggested the NDP’s cap on insurance rate increases had a negative effect on some consumers.
“The five per cent rate increase limitation applied to an insurance company’s entire private passenger automobile insurance business (i.e. their gross company-wide income from auto premiums), not to individual insurance policies,” she wrote. “Individual Albertans could and did see their insurance premiums rise by much more than five per cent, with some seeing increases in the range of 10-20 per cent or higher.”
Taillon also wrote that Albertans faced new requirements to pay for a full year of premiums up front, had reduced access to collision or comprehensive coverage and “saw new administrative barriers to renewing or applying for insurance, as insurers took steps to minimize their losses.”
“Insurance companies are facing the challenge of an unsustainable market and Albertans are paying the price,” she wrote. “We committed to making life better for Albertans and this Band-Aid solution imposed by the previous government has only made the problem worse.
“Allowing this limitation to expire is necessary to ensure a sustainable industry that can best serve the needs of Albertans.”
NDP Leader Rachel Notley was critical of the UCP government’s decision to let the cap expire in a tweet posted Friday afternoon.
“As families struggle and weekly earnings dropped again this week, Mr. (Jason) Kenney is pandering to insurance companies,” she tweeted.
“We know some will increase rates by 20 per cent. This isn’t OK. People rely on their vehicles — this’ll cost families more than the carbon tax.”
Taillon said the cap will expire on Saturday.
–With files from Global News’ Tomasia DaSilva
Watch below: (From Aug. 12, 2019) Alberta drivers will be getting a digital option for their auto insurance if they don’t like their current insurance pink slips. Tom Vernon explains how it’s part of an effort to reduce red tape.
Sign up for our weekly Money123 newsletter
© 2019 Global News, a division of Corus Entertainment Inc.
Source: Read Full Article