Government invites public input on specific auto insurance reform issues

Government Services Minister Dianne Whelan announced today that the department is moving forward with consultations committed to in March 2004 on several issues relating to auto insurance reform that are in addition to the Terms of Reference of the Public Utilities Board review.

As part of government�s comprehensive review of insurance, the department is looking at the process by which rates are set; stiffer penalties for impaired driving; penalties for false testimony, and disclosure by insurance companies of injured parties under surveillance. The department is now inviting public input in these areas.

Before any decisions are made on these issues, the department is requesting input in writing from the public and interest groups by March 4, 2005.

"These issues are being addressed in addition to the review being conducted for government by the Public Utilities Board as they relate to matters of government policy," Minister Whalen said. "At the same time, we want the people of the province and the groups that will be affected by these decisions to have an opportunity to provide input. Our goal as a government is to bring forward the best possible reforms, through an open consultation process."

Government is proposing that the Public Utilities Board require insurance companies to justify rate increases on an individual basis. The current system used by the board, which is not used anywhere else in Canada, sets rates based on minimum and maximum benchmarks. Government believes consumers may be better served if there are no minimum benchmarks and companies have to justify rate increases on an individual basis. It is proposed that the new process be effective when the current rate freeze expires on March 16, 2005.

Government is considering introducing penalties for giving false information as it relates to insurance claims, as well as reviewing the current penalties for impaired driving to determine if additional measures are required. Government is also exploring whether insurance companies should be required to formally advise injured parties that they are under surveillance and provide them with access to the material gathered during surveillance.

A consultation document outlining these issues can be found on the department Web site at //www.gov.nl.ca/gs/consultation/   Anyone wanting to provide input on these issues can do so in writing to:

Superintendent of Insurance/Department of Government Services
P.O. Box 8700
St. John�s, NL 
A1B 4J6
Fax: (709) 729-4151 
E-mail: consultation@gov.nl.ca

Media contact: Tracy Barron, Communications (709) 729-4860 or 690-6157