IBC Lauds New Brunswick Legislation as ‘Positive Step’ to Stabilize Premiums

The Insurance Bureau of Canada announced that “is pleased that New Brunswick’s government is taking concrete action to stabilize auto insurance rates,” following a decision to cap pain and suffering awards for minor personal injuries at C$2,500 (US $1860) as of July 1.

The decision, announced by Bradley Green, Minister responsible for insurance, applies to awards that are over and above insurers’ payouts for healthcare and auto repair costs. “The industry is optimistic that this new legislation will control escalating claims costs,” stated Don Forgeron, VP of the IBC’s Atlantic region.

The bulletin noted that “In New Brunswick, claims costs for automobile insurance have outpaced premiums by six to one since 1996, primarily due to escalating awards for pain and suffering. Based on a recent review of IBC’s database of 120 million insurance policies, New Brunswick premiums increased 20% from 2001-2002. The government reported yesterday that this new legislation would limit compensation for minor soft tissue injuries, while ensuring maximum benefits for those who are seriously injured.”

“We have been working towards a solution that includes restricting minor, non-permanent injury claims so that those who are seriously injured can receive the care they need and deserve,” Forgeron continued. “This legislation will combat the costly awards that now accompany every accident. It’s encouraging that the government is taking the necessary steps to target the root cause of increasing premiums.”