New Brunswick, insurers negotiate 13.5% auto rate decrease

The government of New Brunswick and the province’s insurance industry hammered out an agreement that will see premiums drop an average of 13.5% by Mar. 1, 2007.

As promised in Premier Shawn Graham’s Charter for Change, the plan involves eliminating gender and geographic areas as rating criteria.

“We will implement a process that will allow for a re-evaluation of traffic patterns, population redistribution and other relevant criteria to assess risk to develop new boundaries that are fair to all New Brunswickers, rather than simply relying on arbitrary geographic boundaries,” Justice and Consumer Affairs Minister T.J. Burke said in a press release. “[The provincial] government will also take additional measures to protect consumers from a return to the days of unpredictable premium spike.”

The government and the insurance industry have been in negotiations for 60 days. Under the terms of the new deal, insurance companies will have to re-file their rates with the New Brunswick Insurance Board in December 2006.

“Because the insurance industry is a competitive one, insurance companies will be implementing details of the government’s announcement on an individual basis,” says Don Forgeron, IBC vice president, Atlantic region. Wawanesa said it plans to abide by the agreement, but it was “concerned” about the deal’s long-term implications given that auto rates were already falling in the province.

“Wawanesa Insurance will implement the further government-mandated automobile insurance rate reductions announced today, despite our concerns,” Wawanesa president and CEO Gregg Hanson said in press release.

“We share with the government of New Brunswick the objective of stable insurance rates for New Brunswick drivers now and in the future,” he said.

All the same, those rates had already been going down, Hanson noted, because the claims costs had been going down.

Fresh on the heels of the New Brunswick agreement, opposition MLAs in Nova Scotia started calling on the Nova Scotia government to follow suit. Halifax Clayton Park Liberal MLA Diana Whalen said Nova Scotia Premier Rodney MacDonald should demand similar rate decreases from the province’s insurance industry, The Daily News of Halifax reported.

“It’s a clear challenge to this province and to our Conservative government to get with it,” The Daily News quoted Whalen as saying. “The government has a responsibility to go to bat for the people of this province.”