Government introduces bill to provide for appointment
of auto insurance consumer representative

The provincial government has introduced a bill to appoint a consumer advocate to ensure public interests are properly represented at automobile insurance rate hearings before the Public Utilities Board. This was one of the proposals contained in the consultation paper on automobile insurance reform issued on October 4, 2001.

At the House of Assembly today, Walter Noel, Minister of Government Services and Lands, said: "During the consultation process, consumers sent us a clear message: They do not believe our automobile insurance system is providing the most cost-effective protection possible. This is one of the initiatives we are undertaking to make improvements. Rates are now regulated by the PUB. We have to make sure the process works effectively to ensure that the kind of protection people want is available. We must also make sure that companies operate as efficiently and economically as possible and that we have a competitive system providing choice for consumers at the best possible prices."

The consumer advocate would be appointed by government whenever the Public Utilities Board holds a rate hearing on automobile insurance rates. The advocate would be responsible for analyzing the rate change proposal, enquiring into justifications for change, and endeavouring to help keep rates as low as possible. The advocate would also have authority to hire expertise necessary to conduct a thorough analysis of any proposed rate increase. Costs associated with the appointment of the advocate would be included in PUB assessments to the insurance industry. A similar process is already in place for electric utility rate hearings.

The minister said: "Government Services and Lands officials are now reviewing the results of our automobile insurance consultation process. I expect to make other recommendations soon. I am moving on this recommendation more quickly as the PUB has indicated it is considering holding rate hearings this fall.

"This is just one element in our effort to minimize rate increases. We have to do more to reduce the cost of claims in order to keep insurance prices as low as possible. We hope new legislation to ban the use of cell phones by drivers and strengthen impaired driving penalties will also help. Any further legislative amendments will be proposed when the House of Assembly returns in the fall."

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

2002 05 01                            2:25 p.m.