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The Injury Regulation: Insurance Reform Gone Wrong
The Injury Regulation: Insurance Reform Gone Wrong
The Injury Regulation: Insurance Reform Gone Wrong
The Injury Regulation: Insurance Reform Gone Wrong
The Injury Regulation: Insurance Reform Gone Wrong
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New Brunswick’s Injury Regulation: Automobile Insurance Profits, Premiums, and Costs .pdf

How You Can Help

If you have been a victim of the Injury Regulation, you realize how easily you could become one, you are bothered by the fact the insurance industry is being allowed to profit unreasonably at the expense of victims and the New Brunswick economy, or you simply have a problem with the basic unfairness of the cap, you can do your part to help us persuade the government to remove it from the books.


Myth vs. Reality

The are many myths relative to auto insurance that the Insurance Industry likes to perpetuate.

    Myth No. 1 - Bodily Injury Claims were "out of control"

The greatest myth of all is what led to the Injury Regulation in the first place – the Insurance Industry’s contention that bodily injury claims were spiralling out of control and thus the reason why premiums had to increase by so much from 2000 to 2004. The Industry lobbied the government hard with this message for several years, until the government agreed the industry needed help to control these bodily injury claims and brought in the Injury Regulation in 2003.

What the government or anyone else outside the Industry didn’t know at the time was that the economic data did not support that assertion.  A review of the Industry's economic data from 1996 to 2006, shows that bodily injury claims were not spiralling out of control but rather had been decreasing steadily from 1999 to 2004, those very years the industry was lobbying for relief and blaming bodily injury claims for premium increases.

Bodily Injury Claims - New Brunswick

Here is the same graph but including average premiums during those very same years. 

Average Premiums and Average Claims

Obviously, there is no causal link between bodily injury claims and increasing premiums. As a matter of fact, the graph shows a reverse link whereby premiums increase when bodily injury claims decrease.

    Myth No. 2 - The Injury Regulation brought stability to premiums

The Insurance Industry and the Graham government like to pat each other in the back saying that the Injury Regulation brought stability in auto insurance premiums.  However, in order to believe that comment, you must first believe that bodily injury claims "destabilized" the premiums in the first place.  The Industry's economic data does not support that allegation at all and, on the contrary, shows that bodily injury claims were under control and decreasing rapidly even before the Injury Regulation.  Therefore, stability in premiums was achieved through other factors but clearly not by the introduction of the Injury Regulation.

    Myth No. 3 - Removing the Injury Regulation would create another Insurance Crisis
First and foremost, the Insurance Industry's economic data shows that if the Injury Regulation was completely removed, the Industry would achieve an after tax return on equity of approximately 13.3%.  This rate of return still exceeds the rate of 10% which is considered by experts in the Industry and the New Brunswick Insurance Board a fair and reasonable profit for auto insurers.

Secondly, premiums cannot increase by more than 3% without prior approval of the New Brunswick Insurance Board (section 267.51(1) of the Insurance Act).  Among the many changes to insurance brought in by the former government was the creation of a regulatory body for auto insurance – the New Brunswick Insurance Board.  As a result, the Board has the mandate to review and access and request for increase of 3% or more in auto insurance premiums.  Given the industry’s extraordinary profits since the introduction of the Injury Regulation in 2003, there is no chance any such application would be successful.

Furthermore, an additional regulatory body was also created by the former government - The Office of the Consumer's Advocate.  The Consumer Advocate's mandate is to protect and investigate any unfair and discriminatory tactics of auto insurer in setting premiums.  Therefore, should the Industry retaliate against the consumers for the removal of the Injury Regulation, it would be squarely within the mandate of the Consumer advocate to regulate and control against such actions.