Minister Noel comments on PUB Automobile Insurance Rate Benchmark

Walter Noel, Minister of Government Services and Lands, today commented on the Public Utilities Board's announcement that its automobile insurance rate benchmark will not change for the coming year.

Minister Noel said: "It is important for consumers to know exactly what this decision means. The 2002 Benchmark Report is based on claim experience for the year 2000. It might be July 2002 before data is available for the year 2001. While I am pleased the benchmark has not increased this year, indications are that rates currently being charged are increasing, and the benchmark could do likewise once more recent statistics are taken into account. We should not read more than justified into this benchmark report.

"Consumers should also know that this decision does not mean that rates cannot rise. There is significant room for movement between the low and high ends of the PUB benchmark.
Companies can move from one end of the scale to the other without seeking further approval. That is why rates now appear to be increasing even though the benchmark is not being changed. Companies may also apply to the PUB at any time for an independent actuarial review if they want to seek approval for rates above or below the current benchmark.

"I welcome the indication that the PUB may hold a public hearing into automobile insurance rates in the fall. One of the current auto insurance reform proposals calls for the appointment of an independent advocate to represent consumers at rate hearings. I hope such a position can be established prior to any hearing to ensure consumer interests are properly represented."

More than 200 submissions have been received by the Department of Government Services and Lands regarding the consultation paper on automobile insurance reform. The department is now assessing those responses and carrying out further research to determine what action may be advisable.

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

2002 01 03                           10:00 a.m.