FREDERICTON, N.B. — New Brunswick insurance companies must offer drivers lower premiums by Aug. 15 or face stiff penalties, the province’s Conservative government announced Tuesday.
Premier Bernard Lord said companies that fail to comply will have their rates automatically cut by a minimum of 20 per cent. Insurers caught violating the law could be fined up to $5,000 per policy-holder.
“We are here to defend the interests of the people of New Brunswick,” Lord said. “That’s what this bill does. It puts consumers first and it imposes new penalties that did not exist before."
The premier said the new rates will be made retroactive to July 1. The province had warned companies that if they didn’t voluntarily file rate reductions by that date, it would bring in a law.
“This bill carries the stick of retroactive benefits for consumers as of July 1,” said Lord. “If the rates are not reimbursed within 45 days then there are penalties that can be imposed on the companies.”
Also, if a company decides to withdraw its auto insurance products, it must give the government six months notice or face a fine of up to $100,000.
Lord has said he’s upset that only a few of the 70 insurance companies in the province have filed lower rates in response to the government’s decision to cap awards for minor injuries at $2,500 – something the insurance industry asked for.
Don Forgeron, spokesman for the Insurance Bureau of Canada, said many companies are in the process of lowering their rates but they are mired in bureaucracy.
“The industry has been at the ready to file lower rates,” Forgeron said in an interview yesterday. “We’ve been caught in a process that wouldn’t allow us to do so.”
The government’s tough stand on insurance rates follows a hard-fought election campaign that was dominated by complaints over skyrocketing insurance rates. In the past year, premiums have shot up 71 per cent on average in New Brunswick.
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