Atlantic Premiers Investigate Public Auto System

The Atlantic provinces may see a harmonized approach to auto insurance finally come to pass, but among their options may be a public auto insurance system. The Atlantic premiers met in Charlottetown recently to address the issue of rising premiums and came away with a promise to implement harmonized reforms this year.

A task force has been charged with coming up with a draft harmonized bill by the end of September, so that provinces can look at passing legislation in their fall sitting. It has also been asked to complete a “comprehensive cost-benefit study” of what would be involved in setting up a public auto insurance system in Atlantic Canada.

The meeting followed an announcement by New Brunswick Justice Minister Brad Green that he would cap “pain and suffering” awards for auto accident victims at $2,500, as of the beginning of July this year. “We expect insurance companies to file new, lower rates as of July 1 with the Public Utilities Board,” says Green. In response, Co-operators General Insurance Co. applied for a 25% rate reduction on auto liability in New Brunswick, while The Dominion of Canada General Insurance Co. authorized brokers to begin writing business again in northern New Brunswick, where auto insurance had become difficult to obtain.

Also recently, Nova Scotia moved to implement auto insurance reforms, including a “no frills” auto product with limited accident benefits for minor bodily injuries. Nova Scotia Environment and Labor Minister Ron Russell says government data shows the change will result in an average 20% drop in premiums. “We expect to see immediate rate reductions in the applications filed by insurance companies. If they are not forthcoming, other options will be considered, including a publicly run system in conjunction with the other Atlantic provinces.”