FREDERICTON, (July 30, 2003) — The Conservative government of New Brunswick has legislated provincial insurance companies to cut premiums by Aug. 15 or face automatic rate cuts by a minimum of 20 per cent. Insurers caught violating the law can also face fines of up to $5,000 per policyholder.

“That’s what this bill does. It puts consumers first and it imposes new penalties that did not exist before, new obligations … that were not there before,” the Canadian Press quoted Premier Bernard Lord as saying.

Furthermore, 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. The premier also said the new rates would be made retroactive to July 1. “If the rates are not reimbursed within 45 days then there are penalties that can be imposed on the companies,” he added.

Lord’s ruling Conservative government have been pressured to address skyrocketing rates that shot up 71 per cent on average in the province since last year.