The Insurance Brokers Association of Alberta (IBAA) has issued a statement in response to the Alberta NDP’s introduction of Bill 206, which will freeze Alberta’s auto insurance rates for a year.
According to the NDP’s Justice Critic Irfan Sabir, Bill 206 – the Insurance (Private Passenger Vehicle Premium) Amendment Act – will suspend the authority of the auto insurance rate board to approve rate increases; it also suspends the authority of the minister of finance to direct the rate board to approve any increases for a year.
IBAA president Barry Haggis responded to the bill’s introduction in a statement denouncing the planned legislation.
"Bill 206 is disappointing news for Alberta's drivers,” said Haggis in his statement. “Rate caps simply don't work. They do nothing to reduce costs within Alberta's insurance system, and simply push problems down the road while making it difficult for many drivers to obtain the coverage they need.”
Haggis explained that the government reforms following the changes made by the last NDP rate cap have led to greater access to different options in the auto insurance marketplace. But during the last rate implemented when the NDP was in power, “consumers had limited options in the marketplace,” the president said.
“Insurance companies were forced to make difficult business decisions, which resulted in less choice and instances where drivers simply couldn't access the coverage they needed. In short, it created more problems than it solved.”
“As local insurance brokers, we firmly believe that more can and should be done to improve affordability for Alberta drivers, particularly given the cost-of-living challenges many consumers are facing here and across the country. This bill is not the answer.”
Haggis concluded that instead of passing the bill, brokers, insurers, and government officials need to work together to identify ways to bring last affordability improvements for drivers.
The IBAA also responded this week to a report commissioned by the Insurance Corporation of British Columbia (ICBC), which suggested that Alberta pays some of the highest auto insurance rates in Canada. The association maintains that the methodology used in the report is misleading, and that discussions on auto insurance affordability “should be based on facts.”
