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Minister pleased with impact Consumer Advocate had on Public Utilities Board (PUB) hearing into Facility Association�s proposed automobile insurance premium increases On November 13, 2002, the Department of Government Services and Lands appointed Mr. Peter O�Flaherty as the Consumer Advocate to represent consumers interests at the PUB hearing into Facility Association�s proposed premium increases. Facility Association had proposed average increases of 41.3 per cent for the more than 8,000 drivers of private passenger vehicles and 48.3 per cent for the more than 400 drivers of commercial vehicles insured in this market. This appointment has had substantial benefits for consumers, as recognized in the PUB�s decision: "The Board finds that the Consumer Advocate�s participation in this hearing was valuable and contributed to a full examination of the issues . . ." Minister George Sweeney is pleased that the Consumer Advocate�s participation has resulted in greater analysis before rates are changed. "The proposed rates were not approved by the PUB at this time, as various assumptions and calculations used by Facility Association appeared to be overly pessimistic. Facility Association has been ordered to re-adjust these and re-file with the PUB. The earliest possible date for implementation of new rates will be August 1, 2003." Although it is not known at this time what the re-filed rate increases will be, a departmental review of the PUB decision indicates that they will be significantly lower than originally proposed. A significant benefit for consumers of last resort insured in this market will be the implementation of a discount for drivers with no convictions in the past 3 years and no at-fault accidents in the past 5 years. "Although Facility Association proposed a 10 per cent discount, the PUB felt a 20 per cent discount was more appropriate. This 20 per cent discount will provide significant savings for the more than 3,000 drivers (60 per cent) in Facility Association that fit into this category. "The Board stated in its report that over the past 17 years the regular market has benefited by 2.5 per cent of the written premiums of Facility Association. This refutes the insurance industry�s argument that Facility Association operations have had a negative impact on their financial position. The industry also claims that drivers in the regular market are subsidizing drivers in the Facility Association market. Based on the audited financial statements of Facility Association up to 2001, the Superintendent of Insurance has calculated that insurance companies in the regular market have benefited by $12,722,000. This shows that in fact the opposite is true," said Minister Sweeney. Facility Association is a non-profit association whose mandate is to provide automobile insurance to owners and licensed operators of automobiles who are unable to obtain that insurance in the regular marker place. Media contact: Jeff Mackey, Communications, (709) 729-4860. 2003 04 11 4:00 p.m. |
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