The
Ontario government has announced the next steps in its plan that it
says will reduce auto insurance rates by an average of 15%, a measure it
included in this year’s budget.
The government said Friday it’s aiming to make the average reduction within two years, with an average 8% reduction target by August 2014.
According to the government’s statement, its steps to make the reduction include:
Providing the Superintendent of Financial Services with authority to require insurers to re-file rates
Continuing to crack down on fraud, including licensing health clinics that invoice auto insurance companies
Reducing unexpected costs by making the Superintendent's Guidelines on accident benefits binding
Exploring other cost reduction initiatives, including provincial oversight of the towing industry and addressing collision repair practices
Continuing to require insurers to offer discounts for consumers with safe driving records
Helping ensure that all regions of Ontario benefit fairly from cost savings.
The government will take further action “as necessary,” its statement said.
“To ensure greater transparency and accountability, independent experts will report on how quickly savings are passed on to consumers and the effectiveness of the marketplace in providing affordable premiums to consumers,” it also noted.
It will also expect a report in January 2014 from the Financial Services Commission of Ontario to show an approved rate reduction of 3% to 5%.
The Hon. J. Douglas Cunningham also has been appointed to lead a review of Ontario’s auto insurance dispute resolution system and make recommendations on transforming the current system.
In a statement Friday, the Insurance Brokers Association of Ontario reiterated its position that changes to auto rate reductions must be made in a "responsible fashion" or run the risk of having insurers leave the segment entirely.
“Our expectation of today’s announcement was that we would see progress made in identified cost reductions resulting from fraud but what we heard were more promises of change and not enough action,” said IBAO CEO Randy Carroll.
“There is an inherent risk that the result of today’s announcement could result in future availability and affordability concerns for consumers in this province. Regardless of the type of business that you are running, you cannot reduce revenue without implementing cost reduction measures and expect to succeed, it just doesn’t work.”
The IBAO pointed to the recommendations made in the final report from the Auto Insurance Anti-Fraud Task Force as ways to reduce costs in the system, and consequently, insurance rates.
Source: canadianunderwriter.ca
The government said Friday it’s aiming to make the average reduction within two years, with an average 8% reduction target by August 2014.
According to the government’s statement, its steps to make the reduction include:
Providing the Superintendent of Financial Services with authority to require insurers to re-file rates
Continuing to crack down on fraud, including licensing health clinics that invoice auto insurance companies
Reducing unexpected costs by making the Superintendent's Guidelines on accident benefits binding
Exploring other cost reduction initiatives, including provincial oversight of the towing industry and addressing collision repair practices
Continuing to require insurers to offer discounts for consumers with safe driving records
Helping ensure that all regions of Ontario benefit fairly from cost savings.
The government will take further action “as necessary,” its statement said.
“To ensure greater transparency and accountability, independent experts will report on how quickly savings are passed on to consumers and the effectiveness of the marketplace in providing affordable premiums to consumers,” it also noted.
It will also expect a report in January 2014 from the Financial Services Commission of Ontario to show an approved rate reduction of 3% to 5%.
The Hon. J. Douglas Cunningham also has been appointed to lead a review of Ontario’s auto insurance dispute resolution system and make recommendations on transforming the current system.
In a statement Friday, the Insurance Brokers Association of Ontario reiterated its position that changes to auto rate reductions must be made in a "responsible fashion" or run the risk of having insurers leave the segment entirely.
“Our expectation of today’s announcement was that we would see progress made in identified cost reductions resulting from fraud but what we heard were more promises of change and not enough action,” said IBAO CEO Randy Carroll.
“There is an inherent risk that the result of today’s announcement could result in future availability and affordability concerns for consumers in this province. Regardless of the type of business that you are running, you cannot reduce revenue without implementing cost reduction measures and expect to succeed, it just doesn’t work.”
The IBAO pointed to the recommendations made in the final report from the Auto Insurance Anti-Fraud Task Force as ways to reduce costs in the system, and consequently, insurance rates.
Source: canadianunderwriter.ca
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