Regulation (April 01, 2010)

DIRECT RESPONSE INSURERS OPPOSE NEW BRUNSWICK BAN ON CREDIT SCORING

The Canadian Association of Direct Response Insurers (CADRI) has appealed to New Brunswick’s premier and minister of justice and consumer affairs to oppose the province’s proposed ban on the use of credit by home and auto insurers.

The provincial government tabled Bill 43 in February. It proposes to ban the use of credit scoring in the underwriting of home and auto insurance, thus promoting fairness and access to insurance for all consumers, the government says.

CADRI argues that such a ban would have the opposite effect.

“Bill 43 will have the unintended consequence of costing the average New Brunswick house and car owner more money for their insurance in the long run,” said CADRI chairman Francois Boulanger.

“We do not think that the government’s goal is to create higher rates for average risk owners so we encourage them to slow down and discuss this change more thoroughly with us.”

IBANS SAYS MINOR INJURY CAP IS “WARRANTED,” BUT SHOULD BE INDEXED

The Insurance Brokers Association of Nova Scotia (IBANS) says limitations placed on pain and suffering awards in the province are “warranted,” although they should be indexed to inflation.

The association’s comments were in response to a discussion paper prepared by the government of Nova Scotia as part of its promised review of the minor injury cap. The consultation period ended in mid-February 2010.

“IBANS has polled our members to determine what type of feedback has been received from our clients with respect to the cap,” the IBANS paper says. “With over half of our members responding, 96% of responses indicated there has been no negative feedback from their customers in relation to minor injury cap.”

If the cap is to be changed in any way, the association goes on to say, “it would be reasonable to suggest that some form of indexing clause be introduced.”

IBANS notes the current cap is not indexed to inflation.