Proposed auto insurance legislation freezes rates

Archived Release

Proposed auto insurance legislation freezes rates

Ministry of Finance

"RESPONSIBLE" APPROACH PROTECTS CONSUMERS QUEEN'S PARK, Nov. 26 - The McGuinty government is delivering on another major commitment by taking steps to lower auto insurance rates and protect Ontario consumers, Finance Minister Greg Sorbara announced today. "This is about acting responsibly to protect consumers," said Sorbara. "We're going to reduce out-of-control costs and make sure those savings are passed on to consumers in the form of lower rates." Sorbara today introduced the Automobile Insurance Rate Stabilization Act, 2003 which, if passed, would freeze insurers' rates at levels approved on or before October 23, 2003 and would prevent further approvals from taking place for 90 days. "This legislation is an important first step in our commitment to do what Ontario consumers want - lower auto insurance rates," said Sorbara. "These measures will maintain both availability and choice for consumers in obtaining auto insurance, and ensure the viability of the overall system." Under the Bill, if passed: - Auto insurance rates would be temporarily frozen for private passenger vehicles at the rates in effect on October 23, 2003. - Approval of applications under the Insurance Act for rate changes would be suspended while the Bill is in force. - Every insurer affected by the freeze would have to reapply to the Superintendent of Financial Services by January 23, 2004 or a day specified by the Superintendent not more than 30 days after January 23 for approval of the rates and risk classification systems it intends to use. - The Superintendent could require a rate to be reduced or otherwise varied. - No rates or risk classification changes could be implemented without the Superintendent's prior approval. - Insurers failing to comply with the Bill could be prosecuted, have their licences suspended or cancelled under the Insurance Act, and could be ordered to refund premiums charged in excess of authorized rates. Sorbara also announced that his Parliamentary Assistant, MPP Mike Colle, is meeting with different groups to find the best way to achieve savings that will bring auto insurance rates down by an average of 10 per cent. Longer-term cost-saving reforms include the creation of customized insurance plans that will allow consumers to save more by allowing them to customize their insurance coverage to best meet their individual needs. "Our cost-saving reforms will result in lower rates - the relief drivers so desperately need. We will continue to work toward a long-term solution to lower auto insurance rates, cut insurance costs and improve consumer protection. We believe that's real, positive change in auto insurance," he said. Sorbara encouraged consumers looking for additional information regarding what the government is doing about auto insurance to visit the Financial Services Commission of Ontario web site at www.FSCO.gov.on.ca for the latest updates. Disponible en fran├žais For more information visit www.gov.on.ca/finFor further information: Contact: Karim Bardessy, Minister's Office, (416) 325-1195; Boni Fox Gray, Ministry of Finance, (416) 212-2155