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NLIS 6
June 11, 2001
(Government Services and Lands)


Minister looking for ways to minimize automobile insurance rate increases

Walter Noel, Minister of Government Services and Lands, is looking at what may be done to keep automobile insurance rates from increasing to the extent the Insurance Brokers Association of Newfoundland and Labrador says will be necessary over the next several years.

Minister Noel said: "Insurance rates are approved by the Public Utilities Board and are based on the cost of accidents and other expenses of insurance companies. Increased claims settlements and increased costs for repairs are causing the industry to seek significant premium increases. Government has a responsibility to determine whether anything can be done to reduce costs and minimize rate increases.

"In this regard, we are finalizing our review of the recommendations of the Report of the Select Committee on Property and Casualty Insurance, along with other initiatives which we believe will be of benefit to consumers. For example, we are considering regulations to reduce the costs of claims for soft tissue injuries; restrictions on benefits for those driving without insurance and those driving while impaired; regulations requiring disclosure to consumers as to why they are placed into the high risk Facility Association; regulations covering acceptable reasons for an insurance company to decline insurance; and increased no fault accident benefits coverage.

"We need to consider all possible actions which will enable us to reduce rates and ensure consumer protection.

"In the meantime, I urge drivers to use extreme caution on our roadways. Safe driving means less accidents, less injuries and more affordable premiums. I also encourage consumers to examine policies they are being offered to ensure they are getting the protection they need at the best possible price."

Media contact: Rick Callahan, Director of Communications, (709) 729-4860.

2001 06 11                                              4:35 p.m.


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