Nova Scotia looks at auto insurance reforms

The Nova Scotia government is asking for public input on a discussion paper about possible reforms to the province’s auto insurance system. Environment and Labour Minister Ron Russell released the discussion paper this week, giving alternatives for possible tort reform, accident benefits changes, underwriting rules and changes to the Facility Association (FA).

Some of the changes mirror those being proposed currently in Newfoundland, including the institution of underwriting rules that would limit insurers’ ability to rate based on age, sex, and other factors. It also proposes options for tort reform ranging from no-fault to a mixed system where consumers would choose whether or not to have coverage for full compensation for pain and suffering from injuries.

The discussion paper would seem to lean towards limiting tort access, noting that most provinces do restrict the right to sue for pain and suffering in the case of minor injuries. It also suggests a “structured settlement” system as an alternative to court, and to have a “wage loss” set at 100% of net wages. In lieu of full tort access, extended accident benefits are proposed that would at least double the existing benefits (for example, an increase in medical payments benefit from $25,000 to $50,000, and an increase in loss of income benefit from $140 per week to $300 per week).

In terms of the Facility Association (FA), discussion will center on whether or not policyholders should be notified that they are being referred to the high-risk pool and given an annual report on their status in the pool. The paper includes an analysis of the insurance industry’s current challenged state, and the industry’s findings on the growing claims pressure from small tissue injuries. It notes that the Utilities and Review Board (UARB) is currently working through a report on rates in the province, to determine if the rate increases being experienced by consumers are justified.