Nova Scotia rate freeze draws industry ire

A bill to freeze auto insurance rates for six months, introduced into the Nova Scotia legislature, is drawing the wrath of the insurance industry’s lobby group.The Insurance Bureau of Canada (IBC) says the move will only “delay the implementation of real solutions”.”Our costs are rising daily and today, the government plans to freeze the premiums we can collect to pay those costs,” says IBC Atlantic region vice president Don Forgeron. “It’s a band aid on a gaping wound.”The bill, if passed, would freeze rates until January 1, 2004.”We oppose government intervention of this kind in our industry – or any industry that competes to the benefit of consumers,” Forgeron adds. Auto insurance has become a political football in much of Atlantic Canada, with three provinces including Nova Scotia putting new legislation on the table. Forgeron says some of the proposals set out in Nova Scotia should help stem the tide of industry losses and thus help with affordability and availability issues that have arisen.As to whether the freeze will cause some insurers to withdraw from the province, Forgeron says it is too early to tell. “We don’t know what the fallout will be, but CEOs will assess the impact to their individual companies and speak to thier role in the Nova Scotia marketplace going forward.”He adds, “we want to continue supporting the Nova Scotia economy and we are asking the government to implement real, long-term solutions to the out of control costs for non-permanent injuries.” These costs, on accident benefits and bodily injury auto claims, are in large part to blame for the industry’s losing track record in Atlantic Canada’s auto insurance market over the last decade, he says.