Service NL
July 4, 2017

Provincial Government Mandates Review of Automobile Insurance

Acting on the commitment in The Way Forward and the minister’s mandate letter, the Honourable Perry Trimper, Minister of Service NL is announcing the start of a comprehensive review of the automobile insurance system in Newfoundland and Labrador.

As part of this review, the Public Utilities Board (PUB) will conduct an independent closed claims study to better understand factors contributing to the rising automobile insurance claim costs in Newfoundland and Labrador. The PUB will also conduct public consultations to seek input on each aspect. This review will explore options and opportunities to improve the insurance product overall. At the end of this process, the PUB will submit a report and recommendations to the Provincial Government.

Service NL will also conduct its own consultations, including exploring issues outside the scope of the PUB’s mandate. One such issue would be the rate setting process itself. Details about the format and timing of the public consultations will be released as details are finalized.

Government will continue to work with community stakeholders and law enforcement to identify opportunities to promote safe driving habits and to improve highway safety. This announcement is building on the recently passed amendments to the Highway Traffic Act to strengthen impaired driving laws. Government has also announced its intention to bring forward increased fines for offences under the Highway Traffic Act in fall 2017.

It is expected that any changes to the Automobile Insurance Act would be in place by the fall of 2018.

“An affordable insurance system that provides greater benefits and better value is an important objective described in The Way Forward. Claims costs and insurance rates have increased steadily since the last review in 2005. We have heard the concerns of consumers and stakeholders who are finding it difficult to deal with the rising cost of insurance, so we have asked the Public Utilities Board to undertake this independent review as a way to find solutions that will benefit consumers.”
Honourable Perry Trimper
Minister of Service NL

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Learn more
Insurance Regulation in Newfoundland and Labrador:

Automobile Insurance Act: external link

Board of Commissioners of Public Utilities: external link

Follow us on Twitter: @GovNL external link and @ServiceNL_ external link

Media contact
Gina MacArthur
Service NL
729-4748, 730-2977


Automobile Insurance Review Process
Automobile insurance is a requirement for all motorists in Newfoundland and Labrador. In order to be effective, it must provide protection to consumers at a reasonable cost.

The automobile insurance system has not been reviewed since 2005. Since that time there have been increasing costs for consumers that lead to a variety of other problems. This review would include an overall analysis of the costs in the system, the product itself and the rate setting mechanisms.

The Public Utilities Board
The minister has asked the Public Utilities Board (PUB) to conduct an independent closed claim study that will provide the information needed to understand contributing factors for the rising insurance claim costs. In this review, data from closed insurance claims will be provided to the PUB by insurance companies to identify the costs and their underlying causes. Rising claims costs have resulted in increased premiums and the review will explore various measures to contain these costs.

The PUB will also conduct a modified closed claims study of taxi rates to determine why taxi operators face higher claim costs and insurance rates compared to the general driving public. The PUB will provide recommendations to reduce claim costs and reduce rates.

A thorough review of all sections (third party liability, accident benefits, physical damage coverage and uninsured motorist coverage) of the automobile insurance product will be undertaken. It will include a review of coverage limits and mandatory versus optional coverage. It will look to modernize and harmonize automobile insurance regulation where possible. The review will also examine product reforms and enhancements that have been proven beneficial to consumers in other jurisdictions in Canada.

Service NL’s Role
Service NL will review how automobile insurance rates are set in this province and the process used by the PUB in carrying out its mandate. Further, the department will examine ways to encourage more competition in the marketplace.

Service NL will also seek input and feedback from all interested parties on issues relating to the automobile insurance system in the province, and on ways to improve highway traffic safety and accident prevention.

2017 07 04                              10:00 a.m.