Government working to make driving safe and affordable

Walter Noel, Minister of Government Services and Lands, says government is working to help make driving safe and affordable. He was commenting on a July 25, 2002 news release issued by the Insurance Bureau of Canada regarding government�s role in helping control automobile insurance costs.

Based on a poll conducted last month by Corporate Research Associates of Halifax, the bureau concluded that Atlantic Canadians believe insurance rates have increased over the past few years, primarily because of the rising cost of claims and injuries; that citizens believe changes are required in the insurance system; and that they want provincial governments to play a key role in addressing the rates issue.

In the release, Don Forgeron, regional vice-president of the Insurance Bureau of Canada (IBC), was quoted as saying: "A recent study on bodily injury closed claim files tells us that the highest percentage of claims dollars goes towards compensation for pain and suffering."

Minister Noel said: "We have had extensive consultations on automobile insurance over the past nine months. We issued a consultation paper last October suggesting options for reform. As part of those consultations citizens were asked for their view of the proposal for restricting compensation for minor injuries, an option many believe would be the most effective way to minimize insurance costs. However, the idea met with strong opposition.

"Government would not be prepared to make changes to the automobile insurance system which do not have wide public support. And, in spite of sharply increasing rates, restricting compensation does not appear to have that level of support."

The IBC poll shows that one in four consumers believe it is government�s responsibility to control rates, while three in four believe it is the responsibility of consumers themselves, public utilities boards or the insurance industry. Minister Noel said: "Ultimately it is consumers who decide what type of automobile insurance they are willing to pay for.

"Officials are currently examining the feasibility of a choice system which would allow consumers to choose between no restrictions on non-economic loss claims, or restrictions on such compensation in exchange for lower premiums.

"We are taking additional action to help reduce accidents and control insurance costs. During the last sitting of the House of Assembly, government introduced a bill which would make Newfoundland and Labrador among the toughest and most progressive Canadian jurisdictions in dealing with impaired drivers.

"Measures being proposed include increased driver licence suspension periods, vehicle seizure and impoundment, and introduction of an ignition interlock pilot project. Our goal is to reduce the carnage and cost of impaired driving.

"We also presented a bill which calls for a ban on the use of hand-held cell phones by drivers while driving. This should also help reduce the number of accidents and deaths on our highways.

"Another bill calls for the appointment of a consumer advocate to ensure public interests are properly represented at automobile insurance rate hearings before the Public Utilities Board.

"I expect these will be passed, and further legislative amendments proposed, when the House of Assembly returns in the fall. I am currently finalizing recommendations to Cabinet in this regard."

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

2002 07 30                            11:50 a.m.