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Oversight of insurance industry strengthened through Bill 39
Posted on November 14, 2013 by Taber TimesPoll
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Bill 39, the Enhancing Consumer Protection in Auto Insurance Act, would allow for both mandatory and optional auto insurance premiums to be regulated.
“We participated in the discussions in the development of the act,” said Cardston-Taber-Warner MLA Gary Bikman. “The government at least consulted. They don’t always do that, so we were pleased to see that.”
Other changes being considered for the auto insurance system would ensure Albertans continue to receive timely, efficient and appropriate access to health care services after a collision. These changes will be detailed in future updates to the Diagnostic and Treatment Protocols Regulation.
“I know that consumers have a belief that if the government steps in, it’s going to keep prices from rising,” said Bikman. “Everybody, when they buy car insurance, the first thing they ask is how much, right? This will give them the sense they’re at least overseeing the industry. There always has been some oversight, this just extends it a little bit, and provides broader oversight. The government has reassured us that it will not add to the bureaucracy, and that the industry is onside with it.”
Key amendments in Bill 39 include:
*Both mandatory and optional insurance coverage would be regulated by the independent Automobile Insurance Rate Board.
*Competition in the auto insurance industry would be increased by moving to a file-and-approve system, where each insurer will need to apply for premium adjustments on an as-needed basis instead of an annual, industry-wide rate adjustment.
*Additional changes to the Insurance Act would strengthen solvency requirements for insurance companies and improve general market conduct.
“We’ve had some of our researchers talking about it, and so we’re not going to oppose it, but I’m going to get some more information on it before I speak to it or vote on it. I think there is (room for increased competitiveness), and I think that in some respect this will enhance the competitiveness,” said Bikman.
Mandatory auto insurance rates are regulated by the Automobile Insurance Rate Board. Since the creation of the board in 2004, mandatory premiums have decreased by 13 per cent. Changes are not being proposed for other components of Alberta’s automobile insurance system, such as the definition of minor injury and the related cap on payouts for minor injuries. Those components will remain under review.
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