Fraud Reforms Welcome, Rate Reductions Will Take Time says Ontario Brokers Association
Toronto - Today, Ontario's Minister of Finance introduced the 2013 Ontario Budget at Queen's Park promising to lower auto insurance premiums by 15% on average over time for Ontario drivers.
The Insurance Brokers Association of Ontario (IBAO) is encouraged that the government intends to implement key measures of the Auto Insurance Anti-Fraud Task Force as a central part of its plan to lower auto insurance premiums.
"While the proposed reforms are welcome, we are very concerned that consumer expectations for a 15% reduction will be very high," said IBAO CEO Randy Carroll. "It's important to understand that the reforms underlying the promised reductions will take time and must be done responsibly. This will require the combined effort of the government, the opposition and the industry. We do not want to set a false expectation for consumers."
The targeted reduction is tied to reforms and cost reductions related to combating fraud that will require the passage of legislation. Without that legislation any potential decrease will be delayed.
"The affordability of auto insurance for our customers is of prime concern to the IBAO," added Carroll. "As an Association we have been urging the government to deal with the fraud problem and we are glad to see that they intend to do so. The challenge now is to get the needed legislation passed as soon as possible. The future of auto insurance rates for Ontarians now lies with the Legislature."
The Anti- Fraud Task Force report estimates that fraud is costing Ontario drivers up to $1.6 Billion per year. The key recommendations of the report include health clinic regulation, tow truck regulation and expansion of the Financial Services Commission of Ontario's (FSCO) investigative and enforcement authority. Today's announcement commits to regulating health clinics, increasing FSCO?s authority and compelling insurers to refile for lower rates once the reforms are implemented.