August 15, 2006
Public Utilities Board report on homeowners, commercial and marine insurance released
Dianne Whalen, Minister of Government Services, released today the report the Public Utilities Board (the board) prepared on homeowners, commercial and marine insurance.
In October 2004, the board was asked to review automobile, homeowners, commercial and marine insurance and report back to government on their findings. The board provided its report on automobile insurance in May 2005. Based on this information, government introduced reforms resulting in enhanced consumer protection and consumer savings of up to 20 per cent. In addition, the participation rate for Facility Association has gone down from a peak of eight per cent in September 2003 to three per cent in July 2006. In this regard, some 10,000 Newfoundlanders and Labradorians have been able to obtain insurance in the regular marketplace representing a significant reduction in their premiums.
The board then concentrated its efforts on homeowners, commercial and marine insurance. The board invited input from the consumer advocate, consumers, the industry and other interested groups.
"I thank the Public Utilities Board for undertaking this significant review on these insurance matters for the provincial government," said Minister Whalen. "We have taken some time to do an initial review of this report. Based on the board’s consultation with stakeholders and industry, government has identified some specific initiatives to improve consumer knowledge and protect consumer rights."
Government has identified the following items which it will undertake immediately:
The board was asked to look at a number of issues surrounding the availability and accessibility of homeowners and commercial insurance in light of associated profit margins and identify ways in which these issues may be addressed. Specifically concerning commercial insurance, the board was asked to focus on the hospitality/tourism industry and the not-for-profit volunteer sector. The board was further directed to report on the accessibility and availability of marine insurance as well as the possible reasons for high loss ratios for the industry in this area and significant year-to-year variation in rates.
"As part of government’s next steps based on this report, we will be seeking meetings immediately with the insurance industry to discuss the report and planned initiatives as well as with a number of groups operating in the hospitality and fishing sectors to review the information provided and explore strategies specific to their needs. We will also establish a working group consisting of the volunteer sector, the insurance industry and government to develop and implement a specific action plan to address concerns in this area including consideration of a Voluntary Protection Act," said Minister Whalen.
"This report reinforced that insurance is a complex matter and we want to ensure that we are fair to all parties. Many groups and individuals provided invaluable input into the findings of this report through written documentation and public consultation. I thank everyone who participated in this process for their time and consideration," concluded Minister Whalen.
The report can be found on the Department of Government Services web site at http://www.gov.nl.ca/gs/consultation/.
Media contact: Vanessa Colman-Sadd, Communications, (709) 729-4860, 682-6593
2006 08 15 10:00 a.m.
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