Walter Noel, Minister of Government Services and Lands, said the Insurance Bureau of Canada�s assessment of Bill 28, an Act to amend the Automobile Insurance Act, the Insurance Companies Act, and the Highway Traffic Act, is misleading and self serving.

Minister Noel said: "There would be more public support for reforms the Bureau advocates if the industry did more to inspire trust and confidence and reduce abuse. Contrary to what the IBC states, Bill 28 will create a better insurance climate for consumers and bring about significant improvements in our automobile insurance system.

"We receive many calls from consumers who feel they are not treated fairly by the automobile insurance industry. Bill 28 addresses those concerns by prohibiting unfair underwriting practices such as refusing insurance based on age, lapse of coverage, and minor accidents where no claim is paid; prohibiting coercive tied selling; forcing the Facility Association, the insurer of last resort, to tell policyholders why they are placed in this high risk category; and, ensuring 100 per cent coverage of unearned premiums, up to $5,000.

"We are not endeavouring to �micro manage� the insurance industry, as IBC contends. But we intend to ensure the insurance industry treats consumers properly. We have listened to consumer concerns, and responded to them. What we are proposing would simply ensure that our citizens are treated the same as most other Canadians.

"I agree that pain and suffering claims are driving up insurance costs. However, there does not appear to be sufficient public support for restricting the right to compensation at this time. We are investigating whether a choice system would be a feasible and acceptable compromise. Rather than simply dismissing that alternative, it would be helpful if the industry would undertake a proper study and advise us of their reasoned conclusions.

"A recent Corporate Research Associates poll found that 50 per cent of respondents agreed with the statement: Insurance coverage for pain and suffering should be optional, allowing drivers to choose whether or not to pay extra for this coverage.

"We have carried out preliminary research on choice systems in North America, which we have made public. If there is sufficient interest, I will recommend that government commit the resources necessary to undertake a detailed analysis to determine if such a system is feasible for our province.

"Under a choice system, a driver buying insurance has a choice between receiving compensation for non-economic loss (pain and suffering), or having restrictions on such compensation.

"Restrictions on non-economic loss compensation usually apply only to the driver choosing this option and his/her immediate family living in the same household.

"A driver choosing to have restrictions on compensation for non-economic loss pays less for insurance than a driver who chooses not to have restrictions.

"Pennsylvania implemented a choice automobile insurance system 12 years ago. Initially, 75 per cent chose full compensation. Currently, 55 per cent have full coverage and 45 per cent have restricted coverage. Liability insurance premiums are about 40 per cent less for restricted coverage. If consumers are interested in a choice system, we can look at the various options available.

"Next month I will hold information forums to discuss various insurance related issues. I will be inviting representatives of the insurance industry, regulators, and other interest groups to participate. The forums will operate as town hall type meetings where the public will have opportunities to ask questions and make comments. I look forward to further discussion of Bill 28 at that time.

"We are doing everything reasonable to help consumers deal with insurance issues, and to make driving as safe and affordable as possible. We encourage citizens to work with us in trying to make improvements. We have to make sure our insurance system is as competitive and efficient as possible, remembering always that consumers pay the entire cost of providing insurance."

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

2002 12 20                                        4:05 p.m.